ChapterTitle: Student Financial Aid Programs
SectionTitle: The Financial Aid Application and Delivery Systems
1.2 The Financial Aid Application and Delivery Systems
((Expected Family Contribution (EFC)))
The basic premise underlying Title IV programs is that a student and
his or her parents (if the student is dependent) have the primary
responsibility of paying for the student's postsecondary education.
Because the programs are intended to help students with financial
need, eligibility for assistance from most of the programs is need
based. Congress developed an Expected Family Contribution (EFC)
formula to determine the financial strength of a student's family and
the student's need for Title IV assistance.
((Free Application for Federal Student Aid (FAFSA)))
To apply for Title IV financial aid funds, students must submit a Free
Application for Federal Student Aid (FAFSA). The FAFSA is used
to collect financial and other information from the student and the
student's spouse (and parents of a dependent student) that is used to
calculate the student's EFC. The resulting EFC is the amount of
money that a student's family is expected to contribute toward the
cost of the student's postsecondary education. The EFC is used in
determining a student's need and the amount of aid an eligible
student receives from each of these aid programs.
Financial aid administrators use the term "delivery system" to refer
to the process by which students apply for financial aid, are awarded
federal funds, and use those funds to pay the costs of attendance they
incur when they enroll in eligible programs of study. The federal
application processing system is illustrated in the flowchart on
((Gift aid and self-help aid))
Title IV programs may be categorized as either "gift aid" or "self-
help aid." Gift aid consists of grants and scholarships that are given
to students; it does not have to be repaid. Self-help aid takes the
form of loans (which must be repaid) and employment (which pays
students wages for hours worked at jobs provided on campus or off
The sections that follow provide a brief overview of ED's federal
financial aid programs. For more complete information, please refer
to Appendix E, "Guide to U.S. Department of Education Programs"
and The Federal Student Financial Aid Handbook.