Wondering how the amount of your federal student aid is determined?

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1 Wondering how the amount of your federal student aid is determined? The colleges or career schools you list on your Free Application for Federal Student Aid (FAFSA SM ) will use several pieces of information to calculate your aid. So, you ve filed your FAFSA SM, and you ve checked your Student Aid Report to be sure all your information is correct, and now you re wondering how that data is used to come up with the list of financial aid for which you re eligible. If I meet the basic eligibility criteria for federal student aid, who decides how much money I ll get? What does cost of attendance (COA) mean? What s the Expected Family Contribution (EFC)? What is need-based aid and how does my school figure out how much I ll get? What is non-need-based aid and how does my school figure out how much I ll get? If I meet the basic eligibility criteria for federal student aid, who decides how much money I ll get? Here s the short answer: Your eligibility depends on your Expected Family Contribution, your year in school, your enrollment status, and the cost of attendance at the school you will be attending. The financial aid office at your college or career school will determine how much financial aid you are eligible to receive. The financial aid staff starts by deciding upon your cost of attendance (COA) at that school. They then consider your Expected Family Contribution (EFC). They subtract your EFC from your COA to determine the amount of your financial need and therefore how much need-based aid you can get. To determine how much non-need-based aid you can get, the school takes your cost of attendance and subtracts any financial aid you ve already been awarded. If you d like the long answer, keep reading!

2 What does cost of attendance (COA) mean? Your COA is the amount it will cost you to go to school. Most two-year and four-year colleges will calculate your COA to show your total cost for the school year (for instance, for the fall semester plus the spring semester). Schools with programs that last a different period of time (for instance, an 18-month certificate program) might give you a COA that covers a time period other than a year. If you're attending at least half-time, your COA is the estimate of tuition and fees; the cost of room and board (or living expenses for students who do not contract with the school for room and board); the cost of books, supplies, transportation, loan fees, and miscellaneous expenses (including a reasonable amount for the documented cost of a personal computer); an allowance for child care or other dependent care; costs related to a disability; and/or reasonable costs for eligible study-abroad programs. What s the Expected Family Contribution (EFC)? Your EFC is an index number that college financial aid staff use to determine how much financial aid you would receive if you were to attend their school. The information you report on your FAFSA is used to calculate your EFC. The EFC is calculated according to a formula established by law. Your family's taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) all could be considered in the formula. Also considered are your family size and the number of family members who will attend college or career school during the year. The EFC Formula guide shows exactly how an EFC is calculated.

3 Your EFC is not the amount of money your family will have to pay for college, nor is it the amount of federal student aid you will receive. It is a number used by your school to calculate how much financial aid you are eligible to receive. What is need-based aid and how does my school figure out how much I ll get? Your college or career school first determines whether you have financial need by using this simple formula: Calculating Your Financial Need Cost of Attendance (COA) Expected Family Contribution (EFC) = Financial Need Need-based aid is financial aid that you can receive if you have financial need and meet other eligibility criteria. You can t receive more need-based aid than the amount of your financial need. For instance, if your COA is $6,000 and your EFC is 2000, your financial need is $4,000; so you aren t eligible for more than $4,000 in need-based aid. The following are the need-based federal student aid programs: Federal Pell Grant Federal Supplemental Educational Opportunity Grant (FSEOG) Direct Subsidized Loan Federal Perkins Loan Federal Work-Study

4 What is non-need-based aid and how does my school figure out how much I ll get? Your school determines how much non-need-based aid you can get by using this formula: Calculating Your Non-need-based Aid Cost of Attendance (COA) Financial Aid Awarded So Far* = Eligibility for Non-need-based Aid *includes aid from all sources, such as the school, private scholarship providers, etc. Non-need-based aid is financial aid that is not based on your EFC. What matters is your COA and how much other assistance you ve been awarded so far. For instance, if your COA is $6,000 and you ve been awarded a total of $4,000 in need-based aid and private scholarships, you can get up to $2,000 in non-need-based aid. The following are the non-need-based federal student aid programs: Direct Unsubsidized Loan Federal PLUS Loan Teacher Education Access for College and Higher Education (TEACH) Grant Quick Links Comparing School Aid Offers Accepting Aid Receiving Aid Entrance Counseling Leave Us Feedback Did You Know? A school s financial aid staff can consider circumstances such as unusual medical expenses, tuition expenses, or unemployment and can adjust your COA or some of the information used to calculate your EFC.

5 Glossary FAFSA Free Application for Federal Student Aid Financial Aid Office The office at a college or career school that is responsible for preparing and communicating information on financial aid. This office helps students apply for and receive student loans, gran... Financial Need The difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC). While COA varies from school to school, your EFC does not change based on the scho... Room and Board An allowance for the cost of housing and food while attending college or career school. Federal Student Aid Programs The programs authorized under Title IV of the Higher Education Act of 1965 that provide grants, loans and work-study funds from the federal government to eligible students enrolled in college or ca... Scholarship Money awarded to students based on academic or other achievements to help pay for education expenses. Scholarships generally do not have to be repaid. Prepare for College o Explore Careers o Career Search o Checklists to Get Ready o Choosing a School o School Search o Understanding College Costs o Applying to Schools o Finding Help Types of Aid o Grants and Scholarships o Loans o Work-Study Jobs

6 o Aid for Military Families o Avoiding Scams Who Gets Aid o Basic Eligibility Criteria o Non-U.S. Citizens o Staying Eligible o Regaining Eligibility FAFSA: Apply for Aid o Estimate Your Aid o Filling Out the FAFSA o Dependency Status o Federal Student Aid PIN o Next Steps After FAFSA o Correcting Your FAFSA o Comparing School Aid Offers o Receiving Aid Repay Your Loans o Making a Payment o Repayment Plans o Income-Based Repayment o Loan Consolidation o Deferment and Forbearance o Forgiveness, Cancellation, and Discharge o Understanding Default o Contact the Ombudsman More Info o About Us o Contact Us o Leave Us Feedback o Glossary o Resources o Announcements o Events o Link to Us o Data Center FOIA Privacy Notices usa.gov ed.gov whitehouse.gov

7 Calculation of Pell Grant Lifetime Eligibility Used Did you know there s a maximum amount of Federal Pell Grant funds you can receive over your lifetime? Learn what the Federal Pell Grant limits are and how your remaining eligibility is calculated. The amount of Federal Pell Grant funds you may receive over your lifetime is limited by a new federal law to be the equivalent of six years of Pell Grant funding. Since the maximum amount of Pell Grant funding you can receive each year is equal to 100%, the six-year equivalent is 600%. How is my Federal Pell Grant Lifetime Eligibility Used (LEU) calculated? How can I see my LEU percentage? How can I learn more about Federal Pell Grants? How is my Federal Pell Grant Lifetime Eligibility Used calculated? Scheduled award: The maximum amount of Federal Pell Grant funding you can receive is calculated for an award year. An award year is a period from July 1 of one calendar year to June 30 of the next calendar year. Your scheduled award is partially determined by using your Expected Family Contribution (EFC) that is calculated from the information you (and your family) provided when you filed your Free Application for Federal Student Aid (FAFSA SM ); is the maximum amount you would be able to receive for the award year if you were enrolled full-time for the full school year; and represents 100% of your Pell Grant eligibility for that award year. Percent used: To determine how much of the maximum six years (600%) of Pell Grant you have used each year, the U.S. Department of Education (ED) compares the actual amount you received for the award year with your scheduled award amount for that award year. Of course, if you receive the full amount of your scheduled award, you will have used 100%. It s possible that you might not receive your entire scheduled award for an award year. There are a number of reasons for this, the most common of which are that you are not enrolled for the full year or that you are not enrolled full-time, or both. If you did not receive the full amount of your scheduled award, we calculate the percentage of the scheduled award that you did receive. For example, if your scheduled award for an award year is $5,000, but because you were enrolled for only one semester you received only $2,500,

8 you would have received 50% of the scheduled award for that award year. Or if you received only $3,750 for the award year because you were enrolled three-quarter-time and not full-time, you would have received 75% for that year. Lifetime Eligibility Used (LEU): ED keeps track of your LEU by adding together the percentages of your Pell Grant scheduled awards that you received for each award year. The table below shows examples of the LEUs of three students who received differing amounts of their scheduled awards over a four-year period. Examples of Pell Grant Lifetime Eligibility Used Student A Student B Student C Pell Grant Scheduled Award $5,550 $5,000 $4,000 Award Year 1 Pell Grant Amount Received $2,775 $3,750 $4,000 Percent Used 50% 75% 100% Pell Grant Scheduled Award $5,200 $5,000 $5,550 Award Year 2 Pell Grant Amount Received $5,200 $5,000 $5,550 Percent Used 100% 100% 100% Pell Grant Scheduled Award $4,700 $5,000 $5,550 Award Year 3 Pell Grant Amount Received $4,700 $1,250 $5,550 Percent Used 100% 25% 100% Pell Grant Scheduled Award $4,700 $5,000 $5,550 Award Year 4 Pell Grant Amount Received $4,700 $5,000 $5,550 Percent Used 100% 100% 100% Total Lifetime Eligibility Used LEU Note: From through , it was possible for a student to receive up to two scheduled awards in a year. So some students will have a percent used of up to 200% for one or more of those years. 350% 300% 400% If your LEU equals or exceeds 600%, you may no longer receive Pell Grant funding. Similarly, if your LEU is greater than 500% but less than 600%, while you will be eligible for a Pell Grant for the next award year, you will not be able to receive a full scheduled award. How can I see my Lifetime Eligibility Used (LEU) percentage? You can log on to National Student Loan Data System (NSLDS ) using your Federal Student Aid PIN and view your LEU. The LEU will be found on the Financial Aid Review page.

9 How can I learn more about Federal Pell Grants? Learn more about Federal Pell Grants and how much you might receive in a year. If you have questions regarding your Pell Grant or the LEU, you can also contact your college s or career school s financial aid office.