Potential Magazine Fall 2016 | Page 38

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.