Need based financial aid are for students that can demonstrate financial need for their education funding. With tuition costs spiraling out of control, the number of students applying for financial aid are increasing each year. More and more students are turning to the federal government for financial aid in the form of grants and student loans to bridge the financial gap. The good news is that financial aid packages have been keeping pace with the rise in tuition costs. Close to a 100 billion is awarded each year in the form of grants, loans and work-study programs by the U.S department of Education.
The primary responsibility for paying for your education is yours but when scholarships which are mostly merit based are not an option, it is time to look at federal aid. If federal aid does not suffice only then turn to private student loans as we always recommend. According to National Center of Educational Statistics, close to two third of the students that apply for need based financial aid receive aid in some form or the other. That statistic alone should give potential applicants cause to be optimistic.
There are two aid applications that are used to evaluate need based financial aid in the United States. The first one is the FAFSA or also known as the Free Application for Federal Student Aid. The second application for financial aid that is also widely used is the College Board’s financial aid application service called the PROFILE application.
The FAFSA is the application that is to be used for all federal aid such as federal student loans like the Stafford Loan or the PLUS Loan. The FAFSA is the first step in the financial aid process to receive federal funding for your education and is required by all educational institutions. The PROFILE application on the other hand is the aid application that is used more for institutional and private funds. The PROFILE application is also commonly used by many colleges and universities and quite often you will find that a particular college that you are applying to will ask you to submit both forms of aid application.
The purpose of both forms of application is to determine how much money you can contribute towards your education. This contribution is commonly called the “Expected Family Contribution” or “EFC” for short. This amount along with the total cost of education are key amounts that determine your need based financial aid package.
It is important to be aware of application deadlines for both FAFSA and PROFILE. The FAFSA application can be submitted anytime after Jan 1st for the year while the earliest date for submitting the PROFILE application is Oct 1st but keep in mind that this must be no later than 2 weeks from the earliest priority date specified by the college or program.
We will soon be publishing extensive guides on how to fill out and complete both the FAFSA and PROFILE applications.
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