Within a few days to a month after it is filed, you should receive by post or e-mail a form known as the Student Aid Report (SAR). On the SAR, you will find the Expected Family Contribution (EFC), an estimate of the amount your family should be able to contribute toward the student’s college expenses for the year. The colleges you listed on the FAFSA will use this figure as a basis for determining the size and composition of any financial aid awards.
If need is demonstrated, the schools that admit your child as a student will prepare a financial aid package covering all or part of the difference between your family’s EFC and the cost of attending the college. Depending upon your family’s income and the resources of the institution, some colleges will offer more or less aid than the gap between the EFC and the actual cost of attending.
The type of Federal aid your child receives is largely based on family income. Lower-income students may be awarded grants that do not need to be repaid, such as the Pell Grant or the Federal Supplemental Educational Opportunity Grant (FSEOG), and assistance may be available in the form of a Federal work-study job.
Beyond these awards, students may be eligible for subsidized Federal loans, such as the Perkins Loan or the Stafford Loan. These loans must be repaid by the student, but the government pays the interest while the student is in school and during grace and deferment periods.
In addition, your family may be offered an unsubsidized Stafford Loan, which must be repaid by the student, or a PLUS Loan, which is in the name of the parents. Interest accrues on these unsubsidized loans from the time the funds are disbursed, though payments may be deferred until after graduation.
When loans offered by Federal programs prove insufficient to cover the actual costs of your student’s education, you can apply for a private education loan. These loans tend to have higher interest rates than government loans, but they are often less expensive than other debt sources.