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Financial Aid Basics

What is financial aid?

Financial aid is any assistance given to a student to help pay for the cost of college. The assistance can take the form of gift aid, which does not have to be repaid. Scholarships and grants are gift aid. Financial aid can also take the form of self-help aid--money that has to be paid back or earned. Loans and federal work study employment are examples of self-help assistance.

Who gives financial aid?

Financial aid can come from many sources. The federal government funds need-based financial aid programs such as the Pell Grant, SEOG, and Federal Work Study. Some states also offer grants and scholarships to residents of their states (see MDHEWD). Scholarships are sponsored by corporations, private non-profit foundations, professional organizations, and often, the student's own university.

Who is Eligible

Scholarship eligibility requirements are determined by the sponsors. In order to be considered eligible for federal student aid, the student must:

  • Be enrolled in an eligible degree or certificate granting program. If you are a graduate student enrolled in a certificate program, please check this listing for your program's eligibility.
  • Be a citizen, national, or a permanent resident of the United States
  • Maintain satisfactory academic progress toward the program
  • Not be in default on any federal student loan (Perkins, Stafford, PLUS, or GradPLUS)
  • Not owe a refund or repayment on any aid program
  • Be enrolled for sufficient hours
    • Minimum of 6 credit hours for undergraduates and 5 credit hours for graduate/professional

What is 'need'?

The federal, and most state, aid programs exist to supplement a family's own resources to help pay for education. The financial aid office determines a student's eligibility for these programs based on guidelines established by Congress and the Department of Education. A student submits information about his family resources by filing the Free Application for Federal Student Aid (FAFSA). That information is then analyzed based on a standard formula that determines how much the student and the family can contribute toward a student's educational costs. That contribution is referred to as the Expected Family Contribution(EFC). Students with very low EFCs can qualify for certain grants like the Pell Grant, SEOG, or other available aid.

The financial aid office of your school subtracts the EFC from the estimated cost of attendance (COA). The cost includes charges billed directly by the university, such as tuition and fees, but also includes other costs, such as the cost of transportation to and from school, books and supplies, meals, and other miscellaneous expenses. The difference is called a student's need. The amount of any gift aid you receive combined with any other need-based assistance, such as a federal work study job, cannot exceed your need. The financial aid office will offer you as much assistance as is possible--this financial aid is often a combination of federal grants, state grants, university funds, employment, and loans.


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  • Why fill out the FAFSA®?
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