FINANCIAL AID BASICS        Financial aid eligibility is the difference between the cost of education and the Expected Family Contribution (EFC).  A federal formula performs a needs analysis to determine the EFC.  Cost of education includes tuition and fees, room and board, books and miscellaneous expenses.   To be eligible for financial aid you must:                 Have  financial need.                 Have a  high school diploma, GED, or pass an independently administered test  approved by the U. S. Department of Education.                 Be  enrolled in an eligible program.                 Be a  U. S. Citizen or eligible non-citizen.                 Register  with Selective Service, if required.                 Complete  forms as required.                 Make  satisfactory academic progress.   The formula can be calculated using one of the following:   FAFSA (Free application for Federal Student Aid):  A detailed form that is the first step in applying for federal aid offered by the U.S. Department of Education.  You may also use the FAFSA to apply for state and college aid.  Contact the college financial aid administrator to find out whether you can use the FAFSA to apply for college aid and what types of aid you might be eligible for.      CSS Financial Aid Profile:  The CSS Financial Aid Profile is a supplemental need analysis document used by many colleges, universities, and private scholarship programs to award their student aid funds.  CSS Profiles are available in secondary schools and college financial aid offices and are to be filed at the same time as the Free Application for Federal Student Aid (FAFSA).  Students should submit the CSS Profile only to those institutions and programs that request it.   TYPES OF FINANCIAL AID   A student’s Financial Aid Package is the total amount of aid that a student receives and will generally consist of several sources of aid:   1.  GRANTS – A grant is money given as an outright gift that does not have to be repaid.  Grants can come from the federal or state government or from the college itself.  Grants are based on need.  When the need is high, the grant tends to be very high as well.  The grant aid may consist of various sources including aid from individual institutions, federal aid in the form of Pell Grants (awarded directly to students), Supplemental Education Opportunity Grants (awarded by individual college aid officers), and state grants.  N. J. grants include the TAG, EOF, Distinguished Scholars, Garden State Scholars, Pupil Tuition Credit, and POW/MIA programs (applied for separately).   2.  LOANS - Loans, like borrowing to purchase a home or a car, must be repaid, usually with interest.  Loans are based on need and awarded to the student.  Usually these loans can come from the institution or private lender.  The greater the need, the larger the loan.  This deferred method of payment takes various forms, and the time frame involved can be for as little as two or three years and as much as 20 years.         Many banks and lending institutions now make special loan programs available to parents to help finance their student’s education.  These loans are based on need, but can help stretch the family’s budget over the years of schooling.  Institutions and bank loan programs will have differing interest rates.   3.  SCHOLARSHIPS - Scholarships are a form of financial aid based on merit.  There are relatively few awards of this sort and the competition for each is heated.  Some are given to students who exhibit special talents in athletics, music, etc.  Others are awarded for academic achievement.  Scholarships are often renewable for each college year.  This is contingent on the student continuing to engage in the activity that prompted the award, or, in the case of academic achievement, maintaining a certain achievement level or grade point average.  In most instances it is the college that controls the scholarship process, inviting only certain students to become candidates.     4.  WORK STUDY - Work-study is another form of aid based on need.  In this case, the student must earn the money awarded through work on campus or with an approved off-campus employer.  While such a program can be very helpful, some caution must be advised.  Students should not fall in the trap of trying to earn more than is realistic.  Remember that in work-study plans (1) withheld taxes are taken out of earnings, (2) most work-study jobs pay minimum wage, and (3) students must allow time for schoolwork and study.    Another option for aid is local awards for assistance, which can be based on need and/or merit.  The student should seek out and apply for as many local awards as possible.  Local businesses, civic organizations, and special programs offer these types of local financial awards.  Some companies and businesses offer assistance to children of their employees.  The student’s school counselor is a good source of information about local forms of financial assistance.  In the spring, parents will receive a booklet of local scholarship programs and opportunities.