|US Student loans |
|Regulatory framework |
|Higher Education Act of 1965 |
US Dept of Education
FAFSA Cost of attendance
|Distribution channels |
|Federal Direct Student Loan Program |
|Loan products |
|Perkins · Stafford |
PLUS · Consolidation
US Private student loan Student loans are loans offered to students to assist in payment of the costs of professional education. ...
The Higher Education Act of 1965 (Pub. ...
The United States Department of Education (also known as ED) is a Cabinet-level department of the United States government. ...
Cost of attendance is a term used in educational finance in the United States, and refers to the estimated full and reasonable cost of completing a full year as a full-time student. ...
The William D. Ford Federal Direct Loan Program is a United States Department of Education program that markets, originates, and disburses loans for higher education (including Stafford, Perkins, and PLUS loans). ...
The Federal Family Education Loan Program (FFELP) is a United States Department of Education program that provides for private organizations to market, originate, and service federally guaranteed loans, such as Stafford and PLUS loans to students and their parents. ...
Perkins Loans are student loans offered by the United States Federal Government to US college students with financial need. ...
A Stafford loan is a loan product offered to students enrolled in American institutions of higher education to help finance their education. ...
PLUS (Parent Loan for Undergraduate Students) Loans are loans offered to parents of students enrolled full-time at American institutions of higher education. ...
College Consolidation Loans offer individuals with student loans the ability to consolidate multiple Stafford and PLUS loans into one loan agreement. ...
The Free Application for Federal Student Aid (known as FAFSA), is a form that must be filled out annually by university students (both undergraduate and graduate) and sometimes their parents in the United States to determine their eligibility for federal student financial aid (including grants, loans, and work-study programs). In addition, most states and schools use information from the FAFSA to award non-federal aid. Representation of a university class, 1350s. ...
A state of the United States is any one of the fifty subnational entities referred to as a state (although four officially favor the term commonwealth) which, along with the District of Columbia, under the provisions of the United States Constitution form the United States of America. ...
The FAFSA consists of numerous questions regarding the student's finances, as well as those of his or her family; these are entered into a formula that determines the Expected Family Contribution (EFC). The amount of the EFC can vary widely, depending on a number of factors; for example, one such factor is whether a student has siblings in college at the time.
Other entities, such as the specific college or state of the student, may also use some of these responses to determine if the student is eligible for school or state aid, in addition to federal aid.
A Student Aid Report (SAR), which includes a summary of the students financial aid formation and the EFC, is forwarded to the schools listed by the student as well as the student. These schools then use the SAR to determine what financial aid package (if any) to award the student.
Calculating the Estimated Family Contribution
An Expected Family Contribution (abbreviated EFC) 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. It is calculated by putting the student's income and assets, and those of the student's parents if the student is considered a dependent, through one of three different formulas, depending on whether the student is considered a dependent, is independent without dependents, or has dependents of his or her own. The University of Cambridge is an institute of higher learning. ...
Typically, need-based financial aid, including loans and grants, will cover the cost of attending college minus the expected family contribution.
Certain students are eligible for an EFC of 0, depending in part on which tax form they and their parents used during the previous year. To qualify for an EFC of 0, the student, parents, and/or spouse must all have been eligible to file their taxes with IRS Form 1040A or 1040EZ. For dependent students, their parents' combined income must be less than $16,000 per year.
For independent students, their own income and that of their spouse must be less than $16,000 per year, and they must have non-spouse dependents, such as children.
Independent students who have no children or other non-spouse dependents will have a positive EFC, which can amount to as much as 20% of their income, even if they make as little as $10,000 per year.
The student is considered a dependent unless one of the following criteria is met:
- The student turns 24 during that calendar year. Note the age requirement is based upon your date of birth. For example, for the 2006-07 school year the student needs to have been born before January first of 1983. If you were born January 2 1983 you are still a dependent student unless you meet one of the other requirements.
- The student is enrolled in a post-graduate program.
- The student is married.
- The student has children, or other non-spouse dependents, who live with them and receive more than half of their monetary support from the student.
- The student is an orphan or ward of the state.
- The student is a military veteran or (as of July 1st) currently serving in active duty for purposes other than training..
The individual schools have the ability to override a student's dependency on a case-by-case bases. Each school has their own policies on when and if they will override. This is usually reserved for extreme cases, such as abuse or abandonment. The student has to supply supporting documentation and jump through several bureaucratic hoops during this process. The school's decision is final in this matter. In the event of transfer to a different institution, the process is repeated in order to determine the new school's decision on the issue of dependency.