6. Financial-Aid Package

This is what you've been waiting for. The financial-aid package is what the college offers to help a student finance his or her college expenses. As we've said before, the Expected Family Contribution (EFC), listed on the U.S. Department of Education Student Aid Report (SAR) you receive after filing the Free Application for Federal Student Aid (FAFSA), goes a long way toward determining how large your "package" is and what it will contain. At the very least, the EFC makes you eligible for a Federal Pell Grant in your financial-aid package; at the most, the EFC will help establish what your out-of-pocket expenses will be for the year and whether you'll have to borrow money--and the size of such loans to the student or parent.

At many universities, other factors also influence the size and composition of the financial-aid package; among these are a student's grade-point average (GPA), scores on the ACT or SAT, and "special characteristics. Here's a brief comment on each factor--since a more complete discussion will follow:

a. GPA--Generally speaking, the higher the GPA (relative to other students who apply and are admitted to a particular college or university), the better--that is bigger and more free--the financial-aid package will be.

b. ACT or SAT scores--Some colleges will award scholarships (i.e., discount their costs) based on these scores. Typically, ACT scores of at least 30-32 (of 36) and SAT scores of at least 1300-1400 (of 1600) will pay off as students will be awarded more money in grants as opposed to loans.

c. "Special Characteristics"--Included here would be athletic prowess, the ethnicity of an applicant, and particular academic/musical/artistic abilities. Indeed, some colleges and universities use different criteria for admission and financial aid if a student is a recruited athlete or an under-represented minority.

Some colleges use a graph with GPA and ACT/SAT scores on the vertical and horizontal axis, respectively. The point at which a student's GPA and test scores intersect determines the amount of their discount or scholarship. Under-represented groups at a particular school may be sought to enhance diversity, so financial-aid packages can be made very attractive. Regarding students having particular abilities, the rarer ones (for example, a virtuoso violinist--who can play in the university's orchestra, which just graduated its first-chair violinist--or someone who has had a book published at age 18) can pay off handsomely in admittance and financial aid.

Next, we'll break down a student's financial-aid package into two types of award: gift-aid and self-help.