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Once the postsecondary school receives the student’s Free Application for Federal Student Aid (FAFSA) information, including the Expected Family Contribution (EFC), the packaging of financial aid can begin. The general rule in packaging is that the student’s total financial aid and other resources must not exceed the student’s financial need [Cost of Attendance (COA) minus the EFC].
As a reminder the COA includes such costs as tuition and fees, room and board, transportation, books and supplies and varies from school to school. Each school compiles a COA, or budget, for the academic year. Also, the EFC is a constant amount; it does not change from school to school.
Packaging is a process that varies from school to school, depending on the types of scholarship and other aid available at the school, and the characteristics of the student population. Schools may have different packaging philosophies, but they generally try to find the best combination of aid to meet financial need of the students they serve. But, schools may not be able to meet 100% of a student’s financial need.
Federal Pell Grants as First Source of Aid
Gift assistance, financial aid that is not repaid, is the first financial aid for which the student is evaluated. Federal Pell Grants are considered to be the first source of gift assistance to the student. It is possible that the student will receive gift assistance (scholarships or grants) from private sources that cannot be adjusted and is large enough, in combination with the Federal Pell Grant, to exceed the student’s financial need. In this case, the student is still eligible for a Federal Pell Grant, however many additional federal and state funds may not be awarded.
Campus-Based Aid (Earnings from Work)
Campus-based aid (Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Perkins Loan, and Federal Work-Study) is awarded next, if applicable based on the FAFSA data. Federal Work-Study is financial aid that’s awarded in the form of a job through the school. This job can be on or off-campus.
Loan Eligibility
The last form of financial aid that a student is offered is comprised of student loans (financial aid that must be repaid). The Federal Stafford Loan is a low interest loan based on FAFSA data. The student should check with the school he or she plans to attend for more information concerning loan eligibility and loan repayment.
Chapter 6 of the Application and Verification Guide, in the Federal Student Aid Handbook, provides more detailed information about the financial aid packaging process.
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