This is logical draw again with lesson number 15. free money for college. The US government distributes large amounts of student aid every year grants. These are financial aid packages that do not have to be repaid. Unless for example, you withdraw from school and Oh a refund. Scholarships are merit awards. And these don't have to be repaid.

Work Study. These are work programs through which you earn money to help you pay for school. Essentially, you're working your way through school, and then there are loans these are borrowed funds for college or career school. You must repay your loans with interest. This is not free money, so we will not cover loans in this lesson. The college scholarship service about 400 private colleges offer this and they use the college board's CSS Profile to make scholarship awards.

This profile is a lot more involved than the FAFSA application. It dives more deeply into understanding a family's financial circumstances to award need based scholarships from wealthy donors or university endowments. It costs $25 for your first profile, and $16 for each additional college you apply to or you could consider an ROTC scholarship. The Reserve officers Training Corps is to train commissioned officers of the United States Armed Forces. ROTC scholarships, help pay for tuition, fees, books and even a monthly stipend at over 1000 colleges and universities. In exchange for getting their college education paid for accepted, cadets will have to commit to serve a minimum period of four to 10 years depending upon the profession and the service.

You can also consider researching these sites for additional scholarship opportunities. But your best chance of obtaining a Merit Scholarship or a need based scholarship is by filing your FAFSA form. Remember, in general merit scholarships are rare. Most of the grants and scholarships are need based need is determined using a complex set of formulas so that one family is not favored over another. Your family's tax and untaxed income, assets and benefits such as unemployment or social security are all considered in the formula. Your family's federal income tax returns are used to evaluate Your family's financial ability and need.

The entire FAFSA process is dependent upon the tax forms you file with the IRS. So who exactly can apply for federal financial aid? To qualify for federal student aid you have to meet certain requirements and this slide shows you the basic eligibility criteria to participate in the federal financial aid program. To get your options for various kinds of federal student aid, the FAFSA web page is by far the most important site. It gives you customized information about grants, loans and work study funds. It should always remain your one stop shop for all matters regarding financial aid.

Really for financial aid, there is no better source. FAFSA is the starting point for all college financial planning. Each year the federal government provides more than 150 billion dollars in financial aid for college or career school. Because FAFSA is based on tax returns, you must file your tax returns to qualify for FAFSA. FAFSA is based on prior prior taxes. If the 2018 19 academic year is your first year of college, you will report your 2016 tax information.

Grants work study and subsidized loans are all need based and need based aid depends upon the parents income and assets. The most important way for need based financial aid to be calculated is through the expected family contribution or EFC. The EFC is a measure of your family's financial strength and is counted lated according to a formula established by law, the cost of attendance minus the EFC is your demonstrated financial need. Clearly, if your EFC is low, that is your financial ability to contribute to college education is low, the demonstrated financial need is higher. Many government programs then kick in helping to underwrite your college costs. We've already talked about this in prior lessons, many private colleges heavily subsidized low income families.

We learned in a previous lesson that for low income families and elite institutions such as Harvard charges less than $4,000 a year in fees, the actual cost of attendance is nearly $70,000 a year. So how do you calculate your EFC if you're an accountant, you could manually compute your EFC using worksheets but this is cumbersome The better way is to use the government's FAFSA forecaster. A good tip here is to use FAFSA forecaster each year your child is in high school. This way you can track the money that you're making as a family and evaluate how much financial aid you will get. Or you could use the college board's EFC calculator. Regardless, when you're ready to file your FAFSA, the FAFSA form automatically calculates the EFC by transferring tax information from the IRS using the data retrieval.

So what does the FAFSA form do? The FAFSA website computes the EFC as a number, this number is always divided by 10 to obtain the EFC in dollars, this example the EFC is 124,840. So the EFC in dollars is 12,004 84. In the case of this family, the family is relatively wealthy because it can afford to contribute $12,484 each year to their child's education. This amount is relatively so large, that it will cover 100% tuition and even some living expenses at many colleges. This family is therefore not being offered any free money, any need based grants or scholarships.

As a concession how the government is offering this family a subsidized low we will learn about loans in the next lesson. Let us look at another EFC example. In this case, we have a cost of attendance in example, a $45,000 and the expected family contribution as calculated by FAFSA is 9000. This means that this family is eligible for a $36,000 aid package, and the federal government has offered $19,000 in aid, generally through grants, scholarships, and work study plans. This means that there is still a gap of $17,000. And this gap and the EFC.

They both denote the total amount to be paid by the family in order to cover college expenses. So where does the gap and EFC amount come from? Well, it is typically funded from college fight with the nines or family savings that we've discussed in the previous lesson, or from federal subsidized unsubsidized and private loans that we will discuss in the next lesson. Let us look at the four major cracks. These are all need based The most popular award is the Pell Grant, which is given to students who are earning a bachelor's degree for the first time. If your family income is under $50,000, you will most likely qualify although slightly higher incomes may qualify to.

The only way to know for sure is to file your FAFSA, the peach and iraq afghanistan service grants are more targeted. As we noted before state aid, such as guaranteed discount plans are awarded. In addition to federal grants. College is really becoming affordable for many students from middle class families. So the key takeaways here are marriage scholarships are rare. Most free money opportunities are linked to a family's financial need.

FAFSA is the single best source of financial aid and your tax returns as the most important documents to secure any financial aid If you have any questions, please let us know. Thank you