Planning for College
— Financial Aid Q&A
Getting started on your quest to find financial aid to pay for college doesn't have to be difficult. We've listed some commonly asked questions with answers to help you better understand how financial aid functions to serve you. Select any of the questions below to find the answer to the question.
Q: What kinds of financial aid are available?
A: Families are expected to be the primary source of education funding. Savings and contributions from friends and relatives are often used to help meet education costs.
Scholarships are awards usually based on skill, ability, talent, or achievement. The Utah Higher Education Assistance Authority has one of the best borrower benefits programs in the country. Click here to learn more. Waivers of tuition and/or fees are offered by some schools.
Military benefits may also be available to individuals (or to their dependents) who have performed military service or are preparing to enter the U.S. Armed Forces.
The government and schools also provide funds. Grants are funds that generally don't have to be repaid. (A recipient who fails to enroll, withdraws, or changes enrollment status may owe a refund or repayment depending on the school's refund/repayment policy.) Grants are usually awarded according to an applicant's financial need. Work-study programs subsidize student jobs on- or off-campus. Student loans, some with government subsidies, are another resource. Loans must be repaid with interest.
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Q: What is need-based financial aid?
A; Aid that is based on a student's ability to pay is called need-based aid. The primary process for determining need is the Free Application for Federal Student Aid (FAFSA). This form is submitted by the student and his or her family every year. Applicants must provide financial information on these forms, which is processed according to a federal formula. Information from this form is provided to schools and is used to determine the form and amount of aid a student will receive.
Q: Who provides financial aid?
A:
Schools, state and federal governments, and private organizations provide financial aid. You and your family have the primary responsibility for meeting educational expenses to the best of your ability.
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Q: How is financial aid awarded?
A;
Schools award aid on the basis of financial need (need-based) or on the basis of academic achievement, athletic ability, or other talents or abilities (merit-based). Most financial aid is need-based but is often awarded in combination with merit-based awards.
Q: Who awards federal financial aid?
A: The school's financial aid office develops your financial aid package according to government guidelines and regulations. The financial aid package is usually a combination of grants, scholarships, work-study, and/or loans, and depends on the availability of funds.
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Q: Where can I get further information about financial aid?
A: Your guidance counselor and the financial aid officer of the school(s) you're interested in attending are good starting points.
Q: How do I apply?
A: You must file the FAFSA to be considered for any federal aid and most forms of state aid. You may also have to file separate forms at your school. Scholarships will require yet further applications. Check with your financial aid office for details.
Q: When do I apply?
A: It's to your advantage to file as early as possible. If you are a senior in high school, mail your FAFSA after January 1, as soon as your family has its tax preparation data. Students who complete and return the FAFSA by March 15 have the best chance of receiving so-called campus based financial aid. Deadlines for financial aid programs vary. If you don't know the deadline, check with the financial aid office or your high school counselor.
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Q: What is need analysis?
A: Need analysis is a process used to determine if you have need for aid and, if so, how much need. Financial need is usually the difference between your cost of education and the amount of money your family is expected to contribute. The formula is:
Total Cost of Education (This varies from school to school.)
Minus Expected Family Contribution (generally the same regardless of school)
equals Financial Need.
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Q: How is my expected family contribution determined?
A: The financial information exported on the FAFSA is used by institutions and scholarship services, as well as state and federal financial aid programs, to determine what you and your family should reasonably be expected to contribute toward your educational costs. The standard formula evaluates your family's prior-year income, current assets, and expenses, and provides allowances. The result is your expected family contribution (EFC), which is the amount you and your family are expected to provide toward the cost of your education for that particular school year.
The EFC of a dependent student is calculated on the basis of the student's and parents' resources. The EFC of an independent or self-supporting student is calculated on the basis of the student's own financial resources (and those of a spouse, if applicable).
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Q: Which parent should complete the financial aid application if my parents are divorced or separated?
A:
The parent with whom you lived the most during the past 12 months should complete the application. If you lived with each parent an equal length of time or lived with neither parent, the parent providing the most financial support for you during the last year should complete the form.
Q: If I have a guardian, should (s)he fill out the financial aid application?
A:
Yes, if your guardian has been legally appointed by a court to support you with his or her own resources and that support will continue while you attend a post secondary institution. Otherwise, your guardian is not required to complete the form unless the school requests it.
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Q: What does financial aid cover?
A:
Financial aid must be used to pay the cost of education, which may include:
- Tuition and Fees
- Books and Supplies
- Transportation
- Housing
- Food
- Personal Expenses (Laundry, Clothes, etc. )
Q: How much can I get?
A:
The total amount of need-based financial aid can't exceed the school's total cost of education minus the expected family contribution.
Q: When will I know how much I will get?
A: If you apply for state and federal aid between January and April, you should be notified of your award(s) during the late spring or early summer.
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Q: Are scholarships taxable?
Students attending college on scholarships should double-check the tax status of any financial assistance with their personal tax advisor before deciding whether to ignore the income or report any of it on their tax return.
The basic requirement for a scholarship to be tax free, known as a "qualified" scholarship, is that the recipient be a degree candidate at an educational institution.
A qualified scholarship can be for any amount that's used for tuition and enrollment fees or other required fees, books, supplies, and equipment. These items must be required of all students in the same course of instruction. Any amount received for incidental expenses is not a tax-free, qualified scholarship. Incidental expenses include expenses for room and board, travel, research, and clerical help.
For more information, contact the Internal Revenue Service (IRS) at 1-800-829-1040 or www.irs.gov.
A free publication, titled Scholarships and Fellowships, is available from the IRS by calling 1-800-829-3676 and requesting Publication #520, or by downloading it from the Internet. Other free publications are also available.
Q: Who is allowed to have information about my student loan account?
Those authorized to have information about a student loan account guaranteed by UHEAA are: the U.S. Department of Education, the school of attendance, the bank or credit union lending the money, the major credit reporting agencies, and any person(s) authorized by the borrower.
No information about a borrower's account can be given to an unauthorized third-party. Without the permission of the borrower, we cannot even confirm that a borrower has an account with us, or disclose any information specific to the borrower's account. We can, however, provide general information about UHEAA and student loans.
We can provide the same information we provide to a borrower to any authorized third party. However, while a borrower can request any and all changes to his/her account, an authorized third-party can only request changes to a borrower's address and telephone information.
To authorize an individual, the borrower needs to complete an "Authorization to Release Information to a Third Party" form and sign it with his/her legal signature. Click here for a link to this form. The form is also available for download from our website under the "Forms" link.
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