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Parent Workshop: Understanding Financial Aid Award Letters
Transcript of Parent Workshop: Understanding Financial Aid Award Letters
Financial aid award package
A financial aid package is a combination of multiple types and sources of financial aid. It may include money from the federal government, state government, the college itself and private sources. Awards come in many types, such as grants, scholarships, loans and student employment.
Types of Financial Aid
Federal & State Grants
Federal Work Study
Federal Student Loans
How Financial Aid is Awarded
Financial aid that does not need to be repaid, such as grants, scholarships, and tuition and housing waivers. Gift aid will vary by college, depending on available funds.
Is money that you have to work to receive. Either by having a job or applying to scholarships.
A loan is borrowed money that must be repaid usually with interest. Federal education loans are cheaper, more available and have better repayment terms than private student loans. The interest rates on federal loans are fixed, while most private student loans have variable rates
Federal Pell Grant ($5,815)
Cal Grant A @ UC ($12,192)
Cal Grant A @ CSU ($5,472)
Cal Grant A @ Private ($9,048)
Cal Grant B ($1,648)
State University Grant ($5,472)
Supplemental Edu. Opp. Grant ($4,000)
University of California Grant ($14,000)
Provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses.
The program encourages community service work and work related to the student’s course of study. It provides part-time employment while you are enrolled in school. s.
Maximum Award $3,500
Federal student loans are issued through the Federal Direct Loan program from the U.S. Department of Education
Direct Loans are low-interest loans for students. Loans help pay for the cost of higher education after high school.
The federal government pays the interest on subsidized loans during the in-school deferment, during the grace period before repayment begins and during an economic hardship deferment. The Federal Perkins Loan and Federal Subsidized Stafford Loan are examples of subsidized loans. Eligibility is based on demonstrated financial need.
Current Interest 4.66%
Interest on unsubsidized loans continues to accrue during the in-school deferment, during the grace period before repayment begins and during an economic hardship deferment. If the borrower does not pay the interest as it accrues, the interest is capitalized (added to the loan balance). The Federal Unsubsidized Stafford Loan and the Federal Parent PLUS Loan are examples of unsubsidized loans. Eligibility is not based on financial need, so even wealthy families will qualify.
Current Interest 4.66%
Parent PLUS Loan
Are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay education expenses. The borrower must not have an adverse credit history. The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received.
Current Interest 4.292%
Understanding the Award Letter
Understanding the Options
Your aid packages are designed to bridge the gap between what college costs and what you and your family can afford to contribute.
When you review and compare award packages, there are two criteria to take into account:
1. How much of your need is being met
2. How your need is being met
Filling the Gap
Your Student Loan
A financial aid office will likely include student loans in the award letter
You can decide:
To accept a loan or not- remember you are investing your EDUCATION
To accept just a portion of the loan that is being offered
Cost of Attendance (COA):Tuition, room and board, books and supplies, transportation, personal expenses
**Each college will have a different COA**
Expected Family Contribution (EFC): What the college expects the student/student’s family to contribute as determined by the FAFSA or California Dream Act
** Remains the same for all colleges**
Cost of Attendance
Expected Family Contribution
How Financial Aid is Determined
= Financial Need
The total size of your package is not a good measure of its value! Sound contradictory
Award 1 (UC Los Angeles)
Work Study $1,500
Award Total $32,303
Cost of Attendance $34,752
UNMET NEED: $2,449
Award 11 (CSU Long Beach)
Work Study $1,500
Award Total $22,645
Cost of Attendance $22,964
UNMET NEED: $319
School year or summer jobs
College-based programs if available-contact financial aid office
Never borrow more than you absolutely need
If the gap is too large, consider another school
It’s up to you
Contact the financial aid office immediately if there is:
A significant reduction in family income
A death or serious illness in the family
Extraordinary medical or dental expenses not covered by insurance
A change in your housing plans for school year
Any other circumstances that reduce the family’s ability to pay for educational expenses