pay the way
funding terms
A SIMPLE GUIDE TO
COLLEGE FINANCIAL AID
Your son or daughter is about to make the magical transformation
from teen to young adult. As the one charged with sending them off
into the world, it’s no wonder you’re stressed!
by Dave Ramsey
We’d love to help. No, we can’t slow time. What we can do is simplify one
part of the process. We’ll break down what you need to know about the
FAFSA by defining key terms and listing deadlines.
FAFSA
The FAFSA (Free Application for Federal Student
Aid) is a form that must be completed before a
student receives any funding for college. Keep in mind
that if your FAFSA paperwork is not processed by the
time the fall semester begins, you may be required to
pay tuition costs out of your own pocket, and then
be reimbursed when your funding arrives. States and
colleges have their own deadlines. If you’d like to receive state or college-specific aid in addition to federal
funding, you must apply early!
Federal Grants
Grants are free money, meaning they don’t have
to be paid back. Pretty awesome, right? The most
common federal grants include the Pell Grant and
the SEOG Grant.
EFC
Once the FAFSA is complete, you should see
something called an EFC (Expected Family
Contribution). Breathe easy. That number isn’t the
amount of funding your teen will receive or the
amount you’re required to pay. The score simply helps
colleges determine how much aid a student is eligible
to receive.
As a general rule, the lower the EFC score, the more
funding your teen can get. Of course, nothing is set in
stone at this point—you’ll find out the details once an
award letter arrives.
L18 |
Fall 2016
www.potentialmagazine.com
The Pell Grant is awarded based on
financial need, cost of attendance
and whether or not a student plans to
attend school full time. Students who
qualify for a Pell Grant will receive it
no matter where they go to school or
when they complete their paperwork.
The SEOG Grant is awarded on a
first-come basis to students who are
already getting the Pell Grant and are
in extreme financial need. Unlike the
Pell Grant, these funds do run out.
That’s why it’s important to complete
the FAFSA as soon as possible.