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What is a financial aid package?

Completing and filing the Free Application for Federal Student Aid allows calculation of the Expected Family Contribution (EFC) toward your school expenses. Once a college receives the EFC calculation, the college's financial aid office will make their best effort to create a financial aid package that meets a student's demonstrated need or to offer suggestions for other available aid. Some colleges are able to meet full demonstrated need, but some cannot. You can view Colorado college financial aid calculators by selecting a school.

Once colleges decide on the package to offer, the financial aid office will send you a financial aid award letter. They may offer you merit- and need-based grants, scholarships, work-study and subsidized federal student loans up to the amount of your financial need. The award letter lists programs of aid and amounts available. The package may be adjusted if other resources are awarded to the student. Use the Award Comparison Worksheet to evaluate your offers.

The financial aid office may also offer you non-need-based aid (amounts above your calculated financial need). This aid is usually an unsubsidized loans to you and/or a PLUS loan to your parent, to help you meet all or part of your EFC.

If a student financial aid package includes loans, be sure to research the loan terms carefully, and don't hesitate to ask a college financial aid officer for advice, says Kathy Ruby. She's the director of financial aid at St. Olaf College in Northfield, Minnesota.

Although student loan debt levels are a topic of concern, Ruby says that student credit card debt is an even more important issue. She strongly suggests that families talk about budgeting, saving money from part-time and summer jobs, and the pitfalls of loans and credit cards. Use the online Money101 credit course to get a handle on borrowing.

"When students are heading off to college, they're taking their first step toward financial independence," she says. "Conversations about handling money are important to start in high school."

How Does a College Determine your Financial Aid Package?

The college financial aid office determines your cost of attendance (COA), which is an estimate of the amount it will cost for you to attend that college that year. The COA varies by college and/or by programs within a college. Because of this, your COA may be different than your friend's even if you are both attending the same college. The COA is calculated by adding together:

  • Tuition and fees
  • Room and board
  • Books and supplies
  • Personal, transportation, and miscellaneous expenses

The college reviews your FAFSA Expected Family Contribution results, subtracting your EFC from your COA. The difference establishes your financial need.

Almost every student is eligible for some form of financial assistance for college - grants, scholarships, loans, or some combination of these types. Use the Financial Aid Award Estimator (FAAE) to research COA and types of financial aid you may be eligible to receive at colleges in Colorado. Also, be sure to check our list of scholarships and scholarship searches for funding you may be eligible to receive.

If you are offered and decide to accept a loan, be a wise borrower and only borrow what you need to pay for your educational expenses each year. The SLOPE Calculator can help you determine this amount as well as set up a budget that you can live with.