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Understanding the Financial Aid Letter: A Comprehensive Guide

This guide provides insights into understanding financial aid letters, including types of federal and state aid, institutional aid, scholarships, and loans. Learn how outside scholarships may affect your financial aid package. Ensure you comply with verification requirements to receive your aid.

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Understanding the Financial Aid Letter: A Comprehensive Guide

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  1. Understanding theFinancial Aid Letter College Career Center Palos Verdes Peninsula High School April 2019

  2. Welcome to the CCC • Julie Arico, director • Nancy Shafer, Financial Aid and Scholarship Advisor

  3. The Financial Aid Letter • If you filled out a FAFSA (Free Application for Federal Student Aid), and included the school in the FAFSA, you will likely receive a Financial Aid Letter • The arrival of the letter widely varies between schools • There is no standard format for the letter • Letters can be very deceptive in the formatting • Know the terminology

  4. Sources for Financial Aid • Federal Aid – determined by filing a Free Application for Federal Student Aid (FAFSA) • Must be filed every year • State Aid – Cal Grants in California • Determined by FAFSA filing and GPA upload by your high school (for incoming freshman and for sophomores under 36 completed units) • Must file with Webgrants when final school decision is a California school • Institutional Aid • School based grants and scholarships. • Be aware of requirements (GPA, renewal, specific courses) • Beware of effect of outside scholarships on Institutional Aid

  5. Type of Federal Aid (www.studentaid.edu.gov) Federal Aid Terms • Grants—financial aid that doesn't have to be repaid (unless, for example, you withdraw from school and owe a refund) • Work Study—a work program through which you earn money to help you pay for school • Loans—borrowed money for college or career school; you must repay your loans, with interest • Fed. Pell Grant max. is $6,195 for the 2019–20 award year • A Federal Supplemental Educational Opportunity Grant (FSEOG or SEOG) is determined by the school from a pot of federal money they receive

  6. State Money • California Student Aid Commission • Cal Grant • Based on need and merit • Out of State Schools • May have their own grants • Ask the school about the rules for residency/in-state tuition • Schools in western US may have a Western Undergraduate Exchange (WUE) tuition

  7. Institutional Money May have stipulations like GPA, number of units in a subject/discipline, limited number of semesters • Scholarships • Deans Scholarship • Department Scholarship • Usually merit based • Grants • Usually need based ? https://bigfuture.collegeboard.org/pay-for-college/grants-and-scholarships/how-outside-scholarships-affect-your-financial-aid-package

  8. Federal Grants • Pell Grant does not need to be repaid • School receives full Pell Grant amount per student • May fluctuate based on your finances • SEOG Grant does not need to be repaid • Is determined by the school from lump sum amount given to the school by the federal government. • May fluctuate year to year

  9. Federal Loans • Federal Subsidized Stafford Loan • Federal Unsubsidized Stafford Loan • Subsidized loan interest payments are paid by the federal government while the student is in school (full time or half time) • Unsubsidized loan interest accrues immediately upon loan disbursement (by semester/quarter) • Check studentaid.edu.gov for types of deferment • Perkins loans are no longer distributed by schools

  10. Federal Loans (continued) • For loans belonging to the student • Student signs the Master Promissory Note • Maximum amount allowed per year: • First Year: $5,500 (only $3,500 in subsidized) • Second Year: $6,500 (only $4,500 in subsidized) • Third Year and more: $7,500 ($5,500) • $31,000—No more than $23,000 of this amount may be in subsidized loans • Flexible terms and loan forgiveness • Repayments begin 6 months after leaving school • Parent Plus Loan • Loan belongs to parent • Flexible terms but no loan forgiveness • Repayments are likely to begin 3 months after disbursement

  11. The Financial Aid/Award Letter • Look for information on when and where to accept your aid package. It is not automatic • Read the fine print either on the letter or on the website • If you are selected for “verification”, comply by the deadlines or you may not receive your aid • Verification will likely require additional information such as mailing a copy of your tax return

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