If you fear that your savings won’t meet your child’s college expenses, don’t despair: You’re not alone. In fact, over 60% of students and their families receive additional help when it comes to financing higher education. There are multiple resources that can provide financial assistance—including the federal and state governments, colleges and universities, and various private organizations.
Expected Family Contribution (EFC) is the amount that the government calculates you and your child together can afford to contribute to a year of higher education. The EFC is based on income, assets (not including your home equity), size of household, tax obligations, and other factors that your child reports each year on the FAFSA.
Several programs, including Perkins Loans and work-study assignments, are handled directly through the school the student attends though the money comes from the federal government. It’s essential to apply for this assistance as early as possible to increase chances for aid.
Most lenders use the FAFSA to evaluate a student’s financial situation and determine his or her eligibility for financial aid. For example, a student may be required to apply for financial aid—along with admission—at school. The school may approve the student for various financial aid programs, but it must use the FAFSA to confirm the student’s eligibility before granting any money.
The FAFSA is a thorough application that requires in-depth financial information, so you and your child should take the time to gather the right resources needed to complete it. Dependent students should make sure they have the following documents available for themselves and for their parents or legal guardians:
Contributions from the book Guide to Saving for College in this press release are used with permission from Light Bulb Press.