Determining Financial Aid Eligibility

When determining ability, families need to start at the federal and institutional level.  These two groups determine ability, and subsequently, eligibility for financial assistance.  The federal methodology is the starting point for determining the family's ability to pay for college.  In addition, each college will have different factors that will be involved in the calculation of the family's demonstrated ability to pay.

Federal methodology is a calculation that determines the amount of money the family will be expected to contribute.  Most federal, state, and local aid is awarded based upon the eligibility as determined by the Expected Family Contribution (EFC) derived through the federal methodology calculation.  The Expected Family contribution can be defined as, "the amount of money expected from the family to contribute to the college education."  Each college will establish a cost of attendance figure that is then used in determining the student's financial need.  The following equation for determining financial need is:


Calculation of the EFC will include information regarding parents' income and assets and the student's income and assets.  Other facts such as total number of household members and total number of household members in college will also have an impact in determining the EFC.

 NEED-BASED AID

Federal Programs
Loan Programs
 There are two main loan programs:  the William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Family Education Loan (FFEL) Program.  The Direct Loan Program enables students and parents to borrow directly from the U.S. Department of Education.  Funds are sent directly to the institution and origination fees up to 4% are applicable.  Several repayment plans are available.  The FFEL program provides federal money through banks and other lenders.  Funds are typically sent from U.S. Department of Education to the bank to the institution on behalf of the student.  Students may only borrow from one program, which is determined by the institution.
Federal Subsidized Stafford Loan The Subsidized Stafford Loan is awarded to students who demonstrate need.  The loan maintains low interest not to exceed 8.25%.  The current rate from 7/1/2005 to 6/30/2006 is 5.30%.  The Federal government covers borrower's interest during periods of college enrollment.
Federal Unsubsidized Stafford Loan The Unsubsidized Stafford Loan is available to students who do not demonstrate need.  The loan maintains low interest not to exceed 8.25%.  The current rate from 7/1/2005 to 6/30/2006 is 5.30%.  Borrower is responsible for interest throughout the loan, but is not required to begin payments until after termination of college enrollment.

Maximum amount student can receive on Stafford Loan

Academic Year  

Freshman $2,625

Sophomore $3,500

Junior $5,500

Senior $5,500

Subsequent Undergraduate $5,500
Federal PLUS Loan Program The PLUS Loan Program is available to parents of undergraduate students.  The loan is not based on need and the amount borrowed (not to exceed cost of attendance) by parent is subject to credit approval.  Interest rate is variable but capped at 9%.  Current interest rate from 7/1/2005 to 6/30/2006 is 6.10%.  Loan acquired through school.   Payment begins within 60 days of the loan being fully disbursed.  Interest begins at disbursement. However, lenders can issue a forbearance that would postpone repayment of principle for up to two years.
Federal Work Study Program The Work Study Program is a need-based employment program funded by federal dollars.  Student typically works on campus, begins at minimum wage, and works seven to fifteen (7-15) hours per week.  Money saved can be added to balance of cost of attendance or received through a check to student.  Check with the institution's Financial Aid Office for disbursement policy.
Internet Resources

Illinois Student Assistance Commission
Financial Aid Facts
The Financial Aid Information Page

State Programs
The Illinois Student Assistance Commission (ISAC) www.collegezone.com, a state agency, provides and administers funding in the form of loans, grants, and scholarships.  One of the main programs administered by ISAC is the MAP Program.
Monetary Award Program (MAP) The Monetary Award Program is grant money aswarded to students based on need ranging from $300 to $4,521.  The amount of the award is dependent upon financial need, tuition and fees at each Illinois institution.  Students are encouraged to list Illinois institutions by cost of attendance (high to low) first, second, third, etc., on the FAFSA for questions #86-97 for consideration of the MAP Award.  Out-of-state institutions should then follow.  Available to students whose expected family contribution is $9,000 or less, and is awarded by the college.  MAP awards can only be used at Illinois college/universities.  Monies awarded through this grant program do not need to be repaid.
State Scholars Program The State Scholar Program is an honorary program that recognizes Illinois high school students for outstanding academic achievement.  ISAC does not award any funds to recognized scholars.