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Student financial aid

Student financial aid refers to funding intended to help students pay educational expenses including tuition and fees, room and board, books and supplies, etc. for education at a college, university, or private school. General governmental funding for public education is not called financial aid, which refers to awards to specific individual students. Certain governments, e.g. Nordic countries, provide student benefit. A scholarship is sometimes used as a synonym for a financial aid award, although grants and student loans are also components of financial aid packages from students' intended colleges

The United States, federal government provides need-based federal aid called Federal Student Financial Aid, which is composed of different programs, grants, and scholarships, work and loan programs including Federal Pell Grants, Federal SEOG Grants, SMART Grants, Academic Competitiveness Grants (ACG Grant), Federal Work-Study Program, Federal Stafford Loans (in subsidized and unsubsidized forms), Federal Perkins Loans, State Student Incentive Grants and Federal PLUS Loans. Federal Perkins Loans are made by participating schools per annual appropriations from the U.S. Department of Education, whereas Federal Stafford Loans and Federal PLUS Loans are made by participating lenders under the Federal Family Education Loan Program (FFELP). The U.S. Department of Education serves as a lender and guarantor under the William D. Ford Direct Loan Program.

To qualify for federal student aid, a student must file the Free Application for Federal Student Aid (FAFSA). The FAFSA uses a calculation taking into account income and assets to determine a student's Expected Family Contribution (EFC) toward his or her college education for that year. Colleges use the EFC to decide what types of financial aid a student is eligible to receive. Students must complete the FAFSA each year to be considered for financial aid and must complete an entrance and exit survey.

The EFC also takes into consideration any participation in college savings or pre-paid tuition plans. In the past, financial aid officers weighed pre-paid tuition plans more heavily than other 529 college savings plans when determining a studentís eligibility. In February 2006, Congress passed legislation to treat both types of plans evenly.

State governments also typically provide some types of need- and non-need-based aid, consisting of grants, loans, work-study programs, tuition waivers, and scholarships. Individual colleges and universities may provide grants and need- and merit-based scholarships. Students requiring financial aid beyond what is offered by their institution may consider a private (alternative) education loan, available from most large lending institutions. Typically, education loans obtained through the federal government have lower interest rates than private education loans.

Institutions may also offer their own student financial assistance, in the form of need- or merit-based aid, as well as endowed scholarships (with varying need and/or merit-based criteria). Some schools may only require the FAFSA; some may also require an additional need-based analysis document, such as the CSS/Profile, to apply for such funds to apply a more stringent need analysis for the rationalization of institutional funds.

Types of Aid

When you apply for financial aid, the UC Student Financial Aid Office will consider you for all aid sources. We will first look at scholarship and grant eligibility based on merit or need. Self-help sources such as work-study and loans will next be assessed for awarding.

It is helpful to review each aid program to know what is available and to learn more about specific awards once you receive an award offer.


Scholarships are "free money" generally awarded based on merit and are not paid back. Additionally, any scholarship that you receive may reduce or replace the self-help (loan or work-study) portion of your aid package.


Grants are "free money" that is not paid back. They are awarded based on need.  An exception is the TEACH Grant, as noted below.


Work-Study lets you work and earn money to help pay for your costs. It is a need-based employment opportunity given to you as part of your financial aid package. 


Low interest student and parent loans are borrowed money that must be repaid. Loans are a large part of many students' aid package. Borrow only what you need. Always remember that you will pay back what you borrow.



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