College cost components
It is important to considered the costs associated with attending college.       

• Tuition and fees.
• Room and board.
• Books and supplies.
• Transportation.
• Personal expenses.

Direct vs. Indirect Costs
College costs are divided into two categories:

• Direct Costs: Charges established by the college: tuition, room, and board (on-campus student housing and meals).
   
• Indirect Costs: Expenses controlled to some degree by the student; personal expenses, books, and transportation. Your college may be able to provide guidelines on typical indirect expenses at their campus.

Reduce Your Indirect Costs
While colleges use an average indirect cost for annual budget estimates, you can reduce these costs by:

• Reducing the number of meals you eat out. 
• Buying used textbooks.
• Living moderately while in school.
• Establishing a weekly budget and sticking to it.
• Limiting the number of trips home or car-pooling to lower transportation expenses.

Do you qualify for need-based aid?

Need-based financial aid defined
Need-based financial aid is awarded based on your and your family's financial circumstances.

Need is defined as the difference between your cost of attending the college and your Expected Family Contribution (EFC)—the measured ability of your family to pay. If there is a difference, your family may be eligible for aid.

Many financial aid programs are awarded to students who qualify based on need. Apply for financial aid. You'll never know how much you qualify for unless you do.

Calculating need
Need is generally defined in one of two ways, depending on which methodology the college uses.

If the college uses...

Federal methodology:
Cost of college - federal EFC = eligibility for federal aid (need)

Institutional methodology:
Cost of college - institutional EFC = eligibility for institutional aid (need)

What affect will your EFC have on the aid you receive?

Expected Family Contribution (EFC)
Your EFC impacts your eligibilty to receive financial aid. Your EFC is a measure of your family's ability to pay for one year of college based on an evaluation of your family's income, assets, and overall financial circumstances.

The EFC may vary from one institution to another, and is generally calculated using one or both of the nationally accepted methodologies.

Federal EFC Methodology

• Based on a formula established by the federal government.
   
• Takes into account family income, assets, size of current household, and the number of family members currently attending college.
   
• Determines eligibility for federally-sponsored financial aid such as Pell Grants, Perkins and Stafford Loans, and Federal Work-Study Programs.

Institutional EFC Methodology

• Used by institutions and organizations to determine a student's eligibility for institutionally-based, private aid programs.
   
• May vary from college to college.
   
• Additional factors in a family's financial situation are sometimes considered to determine a student's eligibility for institutional need-based aid.
   
• May be used instead of, or in addition to, the federal EFC to determine eligibility to receive financial aid from college or private funds administered by the college.

The EFC is the Expected Family Contribution, not just your parent's contribution. You and your parents share responsibility for meeting the cost of college.

What is the selection criteria for non-need-based aid?

Non-need-based aid
You can receive non-need-based financial aid, regardless of your and your family's financial circumstances.

Non-need-based aid can be awarded based on:

• Academic credentials.
• Test scores.
• Church, civic, or community activities or membership.
• Alumni affiliations of other family members.
• Your parents' employer.
• Ethnic or nationality factors.
• Special talents, such as music, sports, oratory, or leadership skills.
   

• Institution-based scholarship programs.
• Reserve Officer Training Corps (ROTC).
• Service academies.
• Private scholarships, including community-based programs.
• Certain federal loans.
• Parent Loan for Undergraduate Students (PLUS).
• Private, non-government loans such as the Sallie Mae Signature Education Loan program.

Each college that offers you admission will send you a financial aid award letter, if you applied for financial aid.

Most colleges send the financial aid award letter with the notification of acceptance or soon thereafter, assuming you have completed all the required financial aid procedures.

Understand your award letters before accepting one.

Before accepting financial aid
Before you accept any financial aid package, make sure you understand it completely and every aspect is clearly explained.

Accept an aid package only after all of these questions have been answered.

• Is this aid for one year only, or is it renewable?
• When and how do you reapply?
• How many hours are required for work-study jobs?
• What is the interest rate on loans?
• Can interest on loans be deferred while in school?
• What are repayment terms for the loans?
• If aid is renewable, are there scholastic or other requirements you must meet?

Explore different types of financial aid for your education.

Types of financial aid
The most common types of financial aid include grants and scholarships, work-study programs, and student loans.

Grants and scholarships
Gift aid includes grants and scholarships—funds that don't have to be repaid. This aid is available from private, state, and federal sources, and from educational institutions themselves.

Grants, like scholarships, do not have to be repaid. They are available through the federal government and state agencies.

The Federal Pell Grant is the largest federal grant program and is based on financial need. There is no minimum grade point average or other academic requirements, as along as you attend an eligible school. Awards are up to $4,000.

The U.S. Department of Education determines eligibility from your Free Application for Federal Student Aid (FAFSA). Submit your FAFSA as soon after January 1 as possible. Many colleges award aid on a first-come, first-served basis.

Schools distribute the need-based Federal Supplemental Education Opportunity Grant (FSEOG) to full-time and part-time students. This award ranges from $100 to $4,000.

Private sources of scholarships or grants
There's a great deal of scholarship and grant money available. However, the key is to pursue private gift aid persistently and aggressively. Funds may be available based on achievement, religious affiliation, ethnicity, memberships, hobbies, or special talents.

And remember, you have access to countless scholarships and grants on WiredScholar Scholarship Search, a free online service.

Contact your employer, your parents' employers, and other relatives to see if they, their unions, or professional associations sponsor any aid programs. Also contact churches, local foundations, civic groups, the local Department of Veterans Affairs office, and other community organizations.

Speak with your high school guidance counselor. They are excellent sources of information on gift aid. Start looking for possible grant and scholarship money during your junior year of high school. (Some high school counselors even suggest that students start looking during ninth grade.)

Federal and state sources
The federal government funds two large higher education grant programs—the Federal Pell Grant and the Supplemental Education Opportunity Grant (SEOG) programs. These grants are generally reserved for the students with need, and are included by colleges in their financial aid packages.

Consider merit-based government programs:

• Leveraging Educational Assistance Partnership (LEAP), formerly known as State Student Incentive Grants (SSIG), is funded by individual states and the federal government. College financial aid advisors and high school counselors can tell students whether they qualify.
   
• The Robert C. Byrd Honors Scholarship Program is an award for academic achievement.
   
• The National Science Scholars Program (NSSP) aids college-bound high school seniors who have achieved distinction in the sciences.
   
• The Paul Douglas Teacher Scholarship Program, available in some states, helps outstanding academic achievers pursue teaching careers. High school counselors have further information.

Work-study
Through work-study, you earn money working part-time on campus or in the community. Most work-study programs are federally funded, however some are college-funded. College financial aid offices can provide more information.

Student loans
The Federal Stafford Loan is the largest federal loan program available to students. Students attending college at least half-time and meeting certain criteria could obtain a Stafford loan. Both subsidized (need based) and unsubsidized (non-need based) loans are offered.

The Federal Perkins Loan helps needy students, based on their Expected Family Contribution (EFC) and the availability of funds at their college.

Stafford loans help many pay for college.

Federal Stafford Loans
If a loan is needed to fund your education, consider a Stafford loan. There are two types of Stafford loans; Federal Subsidized and Federal Unsubsidized.

• A variety of repayment terms are available, including graduated payment (where the amount of the payment is lower in earlier years and increases at specified intervals) and income-sensitive options.
   
• You may be eligible to postpone payments through deferment or forbearance.
   
• Before your loan enters repayment, your financial aid officer will provide details on these options.