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Encyclopedia > Financial aid

Financial aid refers to funding intended to help students pay tuition or other costs, such as room and board, for education at a college, university, or private school. General governmental funding for public education is not called financial aid, which refers to awards to specific individual students. A scholarship is sometimes used as a synonym for a financial aid award. Tuition means instruction, teaching or a fee charged for educational instruction especially at a formal institution of learning. ... Room and board describes a situation where, in exchange for money, labor or other considerations, a person is provided with a place to live as well as meals (board) on a comprehensive basis. ... The term college (Latin collegium) is most often used today to denote an educational institution. ... Representation of a university class, 1350s. ... Private schools, or independent schools, are schools not administered by local or national government, which retain the right to select their student body and are funded in whole or in part by charging their students tuition rather than with public (state) funds. ... // Public education is education mandated for the children of the general public by the government, whether national, regional, or local, provided by an institution of civil government, and paid for, in whole or in part, by taxes. ... A scholarship is an award of access to an institution or a financial aid award for an individual (a scholar) for the purposes of furthering their education. ...

Contents


Types of financial aid

Financial aid may be classified into two types based on the criteria through which the financial aid is awarded: merit-based or need-based.


Merit-based

Merit-based scholarships include both scholarships awarded by the individual college or university and merit scholarships awarded by outside organizations. Merit-scholarships are typically awarded for outstanding academic achievements, although some merit scholarships can also be awarded for special talents, leadership potential and other personal characteristics. Merit scholarships are sometimes awarded without regard for the financial need of the applicant. At many colleges, every admitted student is automatically considered for merit scholarships. At other schools, however, a separate application process is required.


Athletic scholarships are a form of merit aid that take athletic talent into account.


Need-based

Need-based financial aid is awarded on the basis of the financial need of the student.


To receive federal need-based financial aid in the United States, the student must file a FAFSA application. The FAFSA uses a calculation taking into account income and assets to determine a student's "Expected Family Contribution (EFC)" toward his or her college education for that year. Colleges use the EFC to decide what types of financial aid a student is eligible to receive. Students must complete the FAFSA each year in order to be considered for financial aid. FAFSA, the Free Application for Federal Student Aid, is a form that must be filled out annually by college students and their parents in the United States to determine their eligibility for federal financial aid (including grants, loans, and work-study programs). ... In the American Financial Aid system, Expected Family Contribution is an amount of money that the Federal government assumes that a student and his or her family are able and willing to pay for higher education. ...


In the United States

The United States government provides need-based financial aid in the form of Federal Pell grants, Federal SOEG Grantss, SSIG Grants, Federal Work-Study, Federal Stafford loans (in a subsidized and unsubsidized form), Federal Perkins Loans, and Federal Parent (PLUS) loans. Federal Perkins Loans are made by participating schools per annual appropriations from the US Department of Education, whereas Federal Stafford Loans and Federal PLUS Loans are made by participating lenders under the Federal Family Education Loan Program (FFELP). The US Department of Education serves as a lender and guarantor under the William D. Ford Direct Loan Program. Schools with graduate and/or professional programs may act as a lender under the FFELP (if they met all criteria for the program and made their first loan by 4/1/2006). In order to qualify for federal student aid (except for Federal PLUS Loans), a student must file the Free Application for Federal Student Aid (FAFSA). The Pell Grant program is a post-secondary education subsidy run by the Federal government of the United States. ... FSEOG (Federal Supplemental Educational Opportunity Grant) The FSEOG is a grant reserved for college students with the greatest need for financial aid to attend school. ... A Stafford loan is a loan product offered to students enrolled in American institutions of higher education to help finance their education. ...


State governments also typically provide some types of need- and non-need based aid, consisting of grants, loans, work-study programs, tuition waivers and scholarships. Individual colleges and universities may provide grants and need- and merit-based scholarships. Students requiring financial aid beyond what is offered by their institution may consider a private (alternative) educational loan, available from most large lending institutions. Typically, educational loans obtained through the federal government have lower interest rates than private educational loans.


Institutions may also offer their own student financial assistance, in the form of need-based or merit-based aid, as well as endowed scholarships (with varying need and/or merit-based criteria). Some schools may only require the FAFSA; some may also require an additional need-based analysis document, such as the CSS Profile, to apply for such funds, in order to apply a more stringent need analysis for the rationalization of institutional funds.


Outside the United States

Many national governments provide student financial assistance subsidies for students attending university, although proposed policies to change such subsidies have engendered considerable debate in several countries, such as Canada, Great Britain, Germany, and Scandinavian countries. The heavy reliance on private subsidies, as in the United States, is not as widespread, although this may be changing.


See also

  • FAFSA
  • CSS Profile
  • Student loan
  • Rupert Wilkinson. Aiding Students, Buying Students: Financial Aid in America (Vanderbilt University Press, 2005)
  • Elizabeth A. Duffy and Idana Goldberg. Crafting a Class: College Admissions and Financial Aid 1954-1994 (Princeton University Press, 1998)

FAFSA, the Free Application for Federal Student Aid, is a form that must be filled out annually by college students and their parents in the United States to determine their eligibility for federal financial aid (including grants, loans, and work-study programs). ... The CSS Profile (often written in all caps as CSS PROFILE) is an application distributed by the College Board allowing college students to apply for financial aid. ... Student loans are loans offered to students to assist in payment of the costs of professional education. ...

External links

  • Congressional Research Service (CRS) Reports regarding student financial aid
  • http://www.nasfaa.org - The web-site for the National Association of Student Financial Aid Administrators
  • http://www.finaid.org -- An often-quoted and thorough source of information and advice about the financial aid process. But be aware that this seemingly unbiased "dot-org" site is owned by monster.com, a commercial entity; and is exclusively sponsored by Citibank, a student lender.
  • Nationally Coveted College Scholarships, Graduate Fellowships and Postdoctoral Awards

  Results from FactBites:
 
financial aid - definition of financial aid in Encyclopedia (324 words)
Financial aid refers to funding intended to help students pay tuition or other costs, such as room and board, for education at a college, university, or private school.
A scholarship is sometimes used as a synonym for a financial aid award.
Financial aid may be classified into two types based on the criteria through which the financial aid is awarded: merit-based or need-based.
  More results at FactBites »

 
 

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