FINANCIAL AID AWARD LETTER AND STUDENT

LOAN WORKSHOPB

y Ms. Turner GEAR UP

AFTER THIS WORKSHOP YOU WILL BE ABLE TO..

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BJECTIVES:

D

efine what a Pell Grant, Stafford Loan: Unsubsidized and Subsidized, different

types of scholarships, what a private loan means

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e will look at different award letters and compare and contrast what they mean

Y

ou will know what Cost of Attendance and EFC (Expected Family Contribution)

mean

1. IDENTIFY THE TOTAL COST OF ATTENDANCE FOR EACH INSTITUTION: THIS WILL INCLUDE TUITION AND ROOM AND BOARD, AS

WELL AS BOOKS/SUPPLIES, ACTIVITY FEES, LAB FEES, AND POSSIBLE TRANSPORTATION EXPENSES. YOU MAY NEED TO CONSULT THE SCHOOL'S WEBSITE FOR A COMPLETE LIST, AS VERY FEW AWARD

LETTERS PROVIDE A COMPLETE DOCUMENTATION.

2. ADD ALL OF THE GRANTS AND SCHOLARSHIPS LISTED ON THE AWARD LETTER TOGETHER: THESE FUNDS COMPRISE THE "GIFT" AID

YOU ARE RECEIVING—MONEY YOU DON'T HAVE TO REPAY. THE SOURCES OF THESE FUNDS MAY INCLUDE STATE AND FEDERAL GOVERNMENTS AS

WELL AS THE INSTITUTION ITSELF.

3. SUBTRACT THE TOTAL AMOUNT OF "GIFT" AID FROM THE TOTAL COST OF ATTENDANCE: THIS WILL HELP DETERMINE THE TOTAL OUT-

OF-POCKET EXPENSE FOR YOUR FAMILY.

4. LOOK FOR THE "SELF-HELP" PORTION: IN MOST CASES, INSTITUTIONS WILL OFFER A STANDARD "SELF-HELP" COMPONENT TO THE FINANCIAL AID AWARD THAT INCLUDES A GUARANTEED STUDENT

LOAN (STAFFORD) OF $3,500 AND A CAMPUS WORK-STUDY OPPORTUNITY WORTH UP TO $1,500. NOTE THAT THE AMOUNT OF THE LOAN

ELIGIBILITY WILL INCREASE FOR EACH OF THE FOLLOWING YEARS. ADDITIONAL LOANS AUTHORIZED FOR THE STUDENT OR THE PARENTS

(PLUS LOANS) MAY BE OFFERED IN PLACE OF "GIFT" AID.[GET TIPS AND TOOLS FOR MANAGING STUDENT LOANS.]

5. KEEP AN EYE OUT FOR "GAPPING": IT IS NOT UNCOMMON FOR THE TOTAL AMOUNT OF FINANCIAL AID OFFERED, BOTH "GIFT" AND "SELF

HELP," TO COME UP SHORT OF MAKING UP THE DIFFERENCE BETWEEN THE EXPECTED FAMILY CONTRIBUTION AND THE TOTAL COST OF

ATTENDANCE. THIS PRACTICE, KNOWN AS "GAPPING," IS EMPLOYED BY INSTITUTIONS THAT CHOOSE NOT TO MEET THE FULL NEED OF THE

STUDENT WITH FINANCIAL AID. IN SUCH CASES, THE STUDENT IS LEFT TO HIS/HER OWN DEVICES TO FIND THE REMAINING FUNDS.

WHAT IS A PELL GRANT

A

Pell Grant is money the U.S. federal government provides for students who need it to

pay for college. Federal Pell Grants are limited to students with financial need, who

have not earned their first bachelor's degree or who are not enrolled in certain post-

baccalaureate programs, through participating institutions.[1] The Pell Grant is named

after Democratic U.S. Senator Claiborne Pell of Rhode Island and was originally known

as the Basic Educational Opportunity Grant. A Pell Grant is generally considered to be

the foundation of a student's financial aid package, to which other forms of aid are

added.[2] The Federal Pell Grant program is sponsored by the United States Department

of Education which determines the student's financial need.

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he max amount of a Pell Grant is 5,500. The minimum is 555.

STAFFORD LOANS

A

 Stafford Loan is a student loan offered to eligible students enrolled in

accredited American institutions of higher education to help finance

their education. The terms of the loans are described in Title IV of

the Higher Education Act of 1965 (with subsequent amendments),

which guarantees repayment to the lender if a student defaults.

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tudents applying for a Stafford Loan or other federal financial aid must

first complete a FAFSA. (Free Application for Federal Student Aid)

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hese loans can either be Subsidized or Unsubsidized

S

ubsidized is when the government pays the interest on the loan while you

are in school

U

nsubsidized means that the interest starts accruing the moment the loan is

disbursed. (Anyone as long as you are not in default can receive a

Unsubsidized Loan)

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here is a 6 month grace period upon graduation or separation of school.

E

FC on the Student Aid Report means Expected Family

Contribution (meaning that is the number that the DOE

thinks the family should be able to contribute based on

the gap that is on the award letter (or financial aid

package).

C

OA is the sticker price of a school (will explain further)

SCHOLARSHIPSYou have to apply for most scholarships. It’s free money so in most cases effort is

required

There are thousands of scholarships out there that can be based on race, religion,

academics, civic clubs, extra curricular, hobbies, adoption, gender. They can also

be based on your GPA, SAT SCORE, and they can be different for different states.

There are whole libraries with books on scholarships.

You get an UNMET Need scholarship from GEAR UP just from joining and

participating.

Some scholarships you will have to write others while others you might just have

to get references and grades.

P

rivate loans are loans that are available but often you need to have credit (and good credit at that) in

order to be approved for one. The terms and interest are generally stricter than say Stafford Loan, but

they are there if you need to apply for them.

On

the other side of the coin is merit–based aid. Merit includes a variety of categories: academic, artistic,

athletic, and the list goes on. Scholarships are the most common type of merit–based aid (though some do

have a need-based component). Assuming need is not a condition, a student with extensive assets and

income is just as entitled to a merit-based award as a student with limited assets and income.

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or the far majority of students, the chief source of financial aid will be need–based aid. However, it's

important to educate yourself on the variety of assistance available. Regardless of your economic

situation, take every opportunity to lessen the financial burden.

W

e’ve covered a lot today. Any questions about

scholarships, Pell Grants, Institutional Aid, Stafford

Loans, Private loans, or Award Letters?