Each college will send or email the student a letter informing him/her how much financial aid the college is offering. This aid will be either Grants and scholarships (money that is not paid back) or student loans and parent loans (money that must be paid back) and/or work-study (money the student earns by working at a job provided by the college).

Financial Aid Package 

A student's financial aid package may include grants, scholarships, work-study, loans, fee waivers, or other types of assistance. The aid may be need-based, non need-based, or a combination of the two. Financial aid packages will often vary between different colleges.

A few days after submitting the FAFSA and signatures online (or about 3 - 4 weeks after a paper FAFSA is submitted) the student will get back a SAR. If the student electronically applied but mailed the signature page, the SAR will be received within 2 weeks of mailing the signature page. The SAR will go to each college the student listed on the FAFSA. The college uses the SAR to determine how much financial aid it will arrange for the student.

The SAR contains a summary of the information reported by the student on he FAFSA, as well as an explanation of how to make corrections. It also tells the applicant whether he or she is eligible for a Pell Grant. Check all of the information carefully and update online (or mail in) any corrections.

The SAR will show the student's EFC (Expected Family Contribution). This is the minimum amount that the student is assumed to pay out of his own pocket. The EFC is calculated using a formula mandated from Congress. The formula takes into account income, assets, and federal and state taxes paid, among other information. Most people have to pay more than their EFC. This additional amount is called "unmet need."

Sometimes the college will ask the student and parent to verify or prove the information reported on the SAR. For example, the college may ask for a copy of IRS tax forms, birth certificate, etc.

Expected Family Contribution (EFC) 

When a student applies for financial aid, the system reviews the family's assets and calculates the Expected Family Contribution (EFC), the amount the family can afford for college. The EFC counts the resources that are available to the family, including non-taxed income and benefits from other government programs. A standard allowance for the family's living expenses (based on the number of people in the household) as well as your parents' age and need for retirement income is subtracted from the family's income. The remaining amount is considered "discretionary income" and thus the amount of that income can be used to pay for college expenses.

The EFC will be the same regardless of the cost of the college and will stay the same for state and federal aid. The more expensive the college, the more financial aid the student may be able to get, and out-or-pocket expenses may remain the same. In a few cases, the expensive college might actually turn out to be cheaper. Public universities are typically much less generous with need-based aid than private ones.