Policies & Concepts

Cost of attendance (COA)

This includes the cost of tuition, room & board, and books.

EFC (Expected Family Contribution)

A standardized formula based on information provided by the family on the Free Application for Federal Student Aid (FAFSA) is used to help colleges and universities determine a family’s Ability to Pay.

Financial need

This is simply the difference between the COA and the EFC. While the COA will vary from school to school, the EFC remains constant. Thus, financial need will vary from school to school.

Financial aid

In general, financial aid refers to those resources (other than the family’s personal resources) that are used to pay the costs of attendance. Financial aid consists of grants (usually based on financial need), scholarships (usually based on academic performance or other merits), low interest loans, and on-campus employment (for example, the Federal Work-Study Program). In some cases, financial aid may actually exceed financial need. However, this “overaward” situation is not allowed if any of the financial aid is based on financial need. Grants and scholarships are always awarded first. If additional aid is needed to meet financial need, then on-campus student employment and need-based student loans are awarded.

Subsidized and unsubsidized loans

These terms refer to “interest characteristics” of loans. With a “subsidized” loan, the federal government pays the interest while a student is enrolled. By contrast, the student is responsible for the interest on an “unsubsidized” loan. Repayment of student loans, both subsidized and unsubsidized, can be deferred until after graduation. Accrued interest on an unsubsidized loan is “capitalized” prior to repayment. The amount of financial need relative to other aid received determines whether or not a student loan is subsidized. For example, if a particular student’s financial need is $10,000 and grants, scholarships, and student employment total $8,000, the student would be eligible for a $2,000 subsidized loan. The remaining loan eligibility would be unsubsidized. Parent loans are not subsidized. EMU sends comprehensive descriptions of student and parent loan programs along with the initial packet of application forms (in January) and with the financial aid award letter.

Cash payment

To calculate the cash payment, the total amount of financial aid is subtracted from the cost of attendance. On-campus employment is considered financial aid. However, since this aid is received monthly beginning in October and is based on actual hours worked, employment eligibility should be excluded when determining cash payment.

Monthly payment plan

EMU uses the services of Tuition Management Systems, Inc. , to provide students and families with the option of making 10 monthly payments, beginning in June, instead of making a single cash payment at the beginning of each semester.

Award letter

This “letter” is the method by which the Financial Assistance Office informs a prospective student of the types and amounts of financial aid he or she is eligible to receive. Revised award letters are mailed to students whenever changes occur in eligibility as a result of corrected or additional information that is relevant to the financial aid application process.

Verification

The federal government requires a financial aid office to verify the data reported on the FAFSA of selected students. When a file is selected for verification, students and parents will be requested to provide the Financial Assistance Office with copies of tax returns and to complete one or more additional documents.

The Hope Scholarship

The Hope Scholarship is a tax credit, not a scholarship. Tax credits are subtracted from the tax your familiy owes, instead of subtracting them from taxable income like a tax deduction. Your family must file a federal tax return and owe taxes to get this tax credit. You can’t get a refund for the Hope credit if your family doesn’t pay taxes. If your family owes less in taxes than the maximum amount of the Hope tax credit for which your fmaily is eligible, you can only take the credit for the amount you owe in taxes.

Lifetime Learning Credit

The Lifetime learning credit is a tax credit available to individuals who file a tax return and owe taxes. This means the amount of the credit is subtracted from the taxes your family owes, rather reducing taxable income like a tax deduction does. You can’t get a refund for the Lifetime Learning credit if your family doesn’t pay taxes. If your family owes less in taxes than the maximum amount of the Lifetime Learning tax credit for which your family is eligible, you cn only take the credit for the amount you owe in taxes.