Mike Brown Updated on May 3, 2017

The federal government provides billions of dollars each year to help qualified undergraduate, graduate and professional students pay for college. That aid is awarded according to a very specific calculation using information you provide on the Free Application for Federal Student Aid (FAFSA). It’s important to understand the four main factors that determine how much federal financial aid you can receive: the cost of attendance (COA); expected family contribution (EFC); need-based aid; and non-need-based aid.

The cost of attendace factor

Your school establishes an estimated COA for what it would typically cost a full or part-time student, in state or out of state, to attend for one academic year. COA includes the costs of tuition, room and board, textbooks, supplies, transportation and other fees associated with going to college. Most schools will show your total cost for a full school year. But some schools with programs that last a longer time, like 18-month certificate programs, may give you a COA that covers a period longer than a year. Generally you can expect FAFSA money each yearif you apply yearly.

Your expected family contribution

The information on your FAFSA is used to calculate your EFC, the specific dollar amount you are expected to contribute toward the cost of going to school. It is calculated using a specific formula established by law. The calculation is based on information including your and your family’s taxed and untaxed income, assets, unemployment or Social Security benefits, family size and the number of people in your family who will attend college during the year. Your EFC is used to determine your eligibility for a Federal Pell Grant, campus-based programs and Federal Subsidized Stafford and Direct Subsidized Loan Programs. EFC is not used to determine your FAFSA eligibility for the non-need-based Federal Unsubsidized Stafford and Direct Unsubsidized Loans.

Qualifying for need-based aid

Your EFC is subtracted from your COA to determine your need and, therefore, how much need-based aid you qualify for. You will receive only the amount of need-based aid to cover that financial amount. Need-based aid includes the Federal Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Direct Subsidized Loans, Federal Perkins Loans and Federal Work Study. For July 1, 2016, through June 30, 2017, you could receive need-based aid equaling:

  • Pell Grant - $5,815
  • FESOG - between $100 and $4,000 depending on the availability of funds at your school
  • Direct Subsidized Loan - between $3,500 and 5,500 depending on your year in school
  • Federal Perkins Loan - undergrads up to $5,500 a year and grads up to $8,000 a year, depending on the availability of funds at your school
  • Federal Work Study - at least minimum wage, but you can earn more

Qualifying for non-need-based aid

You can also receive non-need-based aid including a Direct Unsubsidized Loan, Federal PLUS Loan or a Teacher Education Access for College and Higher Education (TEACH) Grant. The amount of any need-based aid you have qualified for, including scholarships, will be subtracted from the COA. That is the amount you will be eligible for in non-need-based aid. For July 1, 2016, through June 30, 2017, you could receive non-need-based aid equaling:

  • Direct Unsubsidized Loan - between $2,000 and $20,500 depending on your year in school
  • Federal PLUS Loan - the maximum amount is the cost of attendance minus any financial assistance received
  • TEACH Grant - up to $4,000 a year

Be smart about FAFSA

Properly completing your FAFSA is key to being awarded as much financial aid as possible. Make sure you know these 17 things before you even begin filling out the FAFSA.

Learn more now

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