aid step 1: Becoming Eligible

understanding the process
Step 1 Reviews the Eligibility Requirements
for student financial aid. It summarizes the formula for calculating the expected family contribution.


Aid Information:

  1. eligibility requirements for financial aid
  2. dependency status
  3. about the expected family contribution (EFC)
  4. college cost analysis
  5. FREE summary aid booklet

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Eligibility Requirements for Financial Aid

To receive federal financial aid assistance, you must:

  • display a need for financial aid (except for unsubsidized Stafford and PLUS loans).
  • complete high school and have been awarded a high school diploma or a General Education Development (GED) Certificate.
  • pass a college entrance exam approved by the U.S. Department of Education, and/or meet other standards your state may establish.

    link to view state requirements:

  • be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program.
  • be a U.S. citizen or eligible non-citizen
  • have a valid Social Security number:
    link to obtain SSN (unless you're from the Republic of the Marshall Islands, the Federated States of Micronesia, or the Republic of Palau)

    get your Social Security Number:

  • make satisfactory academic progress.
  • sign a statement on the Free Application for Federal Student Aid (FAFSA) certifying that you will use federal student aid only for educational purposes:

    see our note on FAFSA form submission:
    see Financial Aid Note 2

  • sign a statement on the FAFSA certifying that you are not in default on a federal student loan and that you do not owe money back on a federal student grant.
  • register with the Selective Service (for young men age 18 and over) - you can register online:

Note from US Department of Education:

The Higher Education Act of 1965 as amended (HEA) suspends aid eligibility for students who have been convicted under federal or state law of the sale or possession of drugs. If you have a conviction(s) for these offenses, call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) or go to the FAFSA on the Web site, click on "Before Beginning A FAFSA" in the left column, then click on "Drug Worksheet" to find out how this law applies to you.

Even if you are ineligible for federal aid, you should complete the FAFSA because you may be eligible for nonfederal aid from states and private institutions. If you regain eligibility during the award year, notify your financial aid administrator immediately. If you are convicted of a drug-related offense after you submit the FAFSA, you might lose eligibility for federal student aid, and you might be liable for returning any financial aid you received during a period of ineligibility.

Download the US Department of Education Student Aid Booklet for more detailed information

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Amounts Based on Dependency Status

Different eligibility loan amounts will be awarded for dependent and independent students:

see stafford loan limits

students who have access to parental support are classified as dependent students.

the award amounts for dependent students are generally lower than the amounts for independent students.

dependent students and their parents must report respectively their income and assets on the FAFSA form:

see our Note 2 for more information about the FAFSA form

Students who display at least one of the following requirements are classified as independent students:

  • you were at least 24 years of age on January 1 of the academic year you begin school
  • you are married on the day you apply (even if you are separated but not divorced)
  • you will be enrolled in a graduate or professional program (beyond the bachelor's degree) at the beginning of the academic year
  • you have legal dependents other than a spouse who receive more than half their support from you
  • you are an orphan or ward of the court (or were a ward of the court until age 18)
  • you are veteran of the U.S. Armed Forces ("veteran" includes a student who attended a U.S. military academy who was released under a condition other than dishonorable)

    if none of the above criteria apply to you, you will be classified as an dependant student

    not living with parents or not being claimed by them on tax forms does not determine dependency status for federal student aid

Reporting as Indepedent Students

Independent students must report only income and assets of their own (and those of their spouse, if married).

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Expected Family Contribution (EFC)

Needs-based financial aid programs are awarded to students and families who display a financial need.

The government calculates financial need based upon the following formula:

+ (add) Total cost to attend college (tuition, books, housing, etc.)
- (minus) The "Expected Family Contribution (EFC) " towards the cost of education for 1 year
= (equals) Eligible Financial Need

To be considered for needs based financial aid, both parent and student must submit the FAFSA form

The FAFSA form is completed by both parent and student for dependent status; and by the student and spouse for independent status.

The FAFSA form collects information about your financial position and compares it with your filed IRS forms.

Note 2 has more information about the FAFSA form

The government uses the submitted FAFSA form to calculate "Expected Family Contribution" (EFC)

The EFC is a measure of the family's financial strength and the amount of resources the family has available to pay for education.

The government looks at 5 areas to calculate EFC:

  1. Assets
    includes stocks, mutual funds, annuities, trusts, US savings bonds, bank cash accounts, 529 plans, prepaid tuition plans, investment real estate, and other family holding

    parent assets are assessed at 5.6% of the value
    student assets are assessed at 35% of the value

  2. Income
    how much money the parents (or spouse) AND the student make

    Certain amount of the parent's income is protected based on the size of the family. Anything over that amount is then assessed on a sliding scale

    The student's income is protected to a certain level. Anything over that amount is assessed at a higher rate, usually around 50%.
  3. Household Size
    the number of dependents in the home that are being supported by the parent or student
  4. Number in College
    the number of people within the household who are attending college
  5. Age
    how close are the parents age to retirement

Your assets and income are the factors that have the biggest impact in calculating EFC.

The EFC is calculated according to a formula established by Congress.

  • About Assets:
    parent assets are assessed at 5.6% of the value
    student assets are assessed at 35% of the value

    If the parent's assets are valued at $100,000, about $5,600 will be added to the formula that calculates EFC.

    If the student's assets are valued at $10,000, then about $3,500 will be added to the formula that calculates EFC

  • About Income:
    a certain amount of the parent's income is protected based on the size of the family. Anything over that amount is then assessed on a sliding scale.

    The student's income is protected to a certain level. Anything over that amount is assessed at a higher rate, usually around 50%.

    These income assessments are then added to the formula that calculates EFC.

The financial aid office of the school you will be attending calculates the total cost of attendance

and then subtracts the EFC that the government calculated based on your FAFSA form.

The remaining cost left over (if any) is the amount of financial need the student qualifies for, adjusted by other financial aid assistance the student expects to receive (such as school scholarships, grants, etc.).

+ (add) Total cost to attend college (tuition, books, housing, etc.)
- (minus) The "Expected Family Contribution (EFC) " towards the cost of education for 1 year
= (equals) Eligible Financial Need

The financial aid administrator will put together a financial aid award package

That comes as close as possible to meeting your need — since funds are limited, the amount awarded may not cover the full cost of college.

Students often must consider other forms of financial aid assistance (such as loans and work study) to supplement the difference between financial need and financial aid awarded.

Examples: see student financial aid options

Some college institutions (mostly private institutions) may use their own methodology in calculating financial need:

+ (add) Total cost to attend college (tuition, books, housing, etc.)
- (minus) The Institution's calculated "Expected Family Contribution"
= (equals) Eligibility of Institutional Financial Need


You need to check with your college to determine what methodology that is in use —

link for more information and an application: information on CSS® Profile from

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What Makes Up College Costs

Schools must tell all applicants how much it will cost to attend their school for each academic year

schools determine costs based upon average budgets that students spend for the following categories:

(download this spreadsheet to analyze cost among schools)

  1. School Tuition and Fees:
    cost to attend class instruction and the use of facilities, labs, libraries and all other related services for each enrolled student
  2. Books and Supplies:
    the estimated amount for books and supplies the student will be required to purchase for classroom instruction — this item may include a computer and other electronic/telecommunication devices
  3. Computer and Other Electronics:
    not necessarily required since colleges offer computer labs and other shared facilities. However, given the electronic push made by colleges, it will be the student's advantage to own their own personal computer along with a printer and other necessary electronics
  4. Room and Board:
    the estimated cost for housing and food if you live in a residence hall; if you live off campus, food expenses are not estimated
  5. Transportation:
    the estimated cost for 2-3 round trips from your home to school; if you live with your parents, the estimated commuting costs will be calculated
  6. Personal Living Expenses:
    the estimated cost for clothing, grooming supplies, laundry and limited entertainment
  7. Other Personal Costs:
    personal expenses that are specific to the student such as disability expenses, dependent care, loan fees, etc.
  8. Miscellaneous:
    any other expenses that you can identify with your school's Financial Aid Office

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How to Pay for College?
That can be a daunting question for both student and parents. So use our 1-page map to direct you to all of the financial aid options. You will find:
  • scholarships and grants
  • college aid
  • student loans
  • state aid
  • forgiveness programs
  • and more
download our 1-page aid map
Campus News
Find a Car for School

Having your own car while attending college gives you the mobility you need to those special occasions:

  • shopping
  • going out with friends
  • getting around town
  • traveling home
  • more

Jump over to our transportation module to view both new, used and rental options.

link to our nBuy "transportation" module