Making Sense of the SAR

Have you mailed your Free Application for Federal Student Aid (FAFSA) yet? As we've mentioned before, you have to fill out the FAFSA to be eligible for federal financial aid. It's in your interest to mail it in for processing as early in the year as possible.

Paper copies of the FAFSA can be found at your child's school, or at colleges and universities. Many libraries will have a copy. If you would like a hard copy and can't find one, call 1-800-4-FED-AID. You can also apply online at http://www.fafsa.ed.gov.

If you've already mailed your FAFSA, you should receive a Student Aid Report (SAR) in the mail within the next month. This report summarizes everything you wrote on your FAFSA. School financial aid offices will use it to determine the amount and type of financial aid your student is eligible to receive.

The government assumes that parents should pay as much as they can reasonably afford for their dependent children's education. Of course, college can often cost much more than you can afford to pay on your own! Eligibility for student financial aid is based on the difference between what a student's parents can be reasonably expected to pay out of pocket and the cost of attending the college or university.

The Student Aid Report includes a figure called the Expected Family Contribution (EFC). The EFC is the amount that the federal government has determined you will be able to contribute toward the cost of your child's education for one year.

This amount will help cover everything, including living expenses, food, clothing and spending money. The good news is that you won't be expected to come up with the entire EFC all at once. It's a contribution made over the course of the school year.

To determine the EFC, the government uses a formula that takes into account the information on your FAFSA. Here are some of the factors that will affect the size of your EFC:

How much money do you earn? Do you have other assets in addition to this income?
Does your student have a summer job? The more money and assets you and your child have, and the more each of you earn, the higher the EFC will be.
How many people are in your family? The more family members you support, the lower the EFC.
Do you have other kids in college? If you do, your EFC will usually be less than it would be if you have no other family members in college.
How many income earners are in your family? Families with two working parents often have a higher EFC.
How old are you? The older you are, the more money you will need to save for retirement, so the EFC may decrease as you approach retirement age.

The EFC will be the same amount for all schools, no matter what the schools cost.

Each school you listed will use the SAR to determine how much financial aid your student is eligible to receive at that school, so review it to make sure everything is correct. If you need to make any changes (for instance, if you've moved or your income has changed), check with the schools your student is considering. They may be able to submit the changes for you electronically.

Schools may request additional information from you, such as copies of your tax returns. It's crucial that you respond immediately to any requests from the financial aid office, since financial aid is typically awarded on a first-come, first-served basis, and funds are limited.

Once the schools have copies of your SAR, they will try to meet your financial need through a "package" that combines aid from federal and state sources with loans, institutional grants and student employment.

Each school you listed on your SAR will then send you an award letter that explains the types and amounts of aid your student is eligible to receive at that institution.