Individual colleges determine financial aid packages based upon the
information provided by you on several forms -- the Free Application for Federal Student Aid (FAFSA)
, the College Scholarship Service (CSS) PROFILE
, and the college’s own institutional forms. These forms
will help the financial aid office determine the estimated family contribution (EFC) to the student’s educational costs. The difference between the cost of attending the college and the EFC defines the need.
The individual college will put together a financial aid package designed to meet that need. At most colleges, a package will include a combination of grant, loan, and employment. Families receiving financial aid from MBA should note that college financial aid packages will differ from high school financial aid packages. Your counselor and the Net Price Calculators on the college web sites can help you anticipate college costs.Grants
are funds that do not have to be repaid. Grants are usually awarded on the basis of need alone and can come from a variety of sources -- Pell Grants
(federal money), state grants (HOPE), and grant
money from the college's own resources.Loans
must be repaid, generally after you have graduated or left school, and usually have lower interest rates than commercial loans. The amount of these federal student loans are capped to ensure that students are not overburdened with debt when they leave school. There are also federal loans available to parents if their child is enrolled in college at least half-time and making satisfactory academic progress. Parents may borrow up to the difference between the cost of education and other financial aid awarded. The loan, which is not based on parents’ income, has a variable interest rate and repayment begins immediately.