Exercises: FAFSA, Grants, Scholarships, and Work-Study

What does FAFSA stand for? Explain its purpose in two sentences and name two pieces of information a student and family usually need to complete it.

Classify each of these as gift aid (does not have to be repaid) or self-help aid (earned or borrowed): a Pell Grant, a merit scholarship, a federal work-study job, and a federal student loan.

A college has a total cost of attendance of $\$24{,}000$ per year. Sophia receives grants and scholarships worth $\$9{,}500$ per year. Find her net price per year and for four years.

Isabella's cost of attendance is $\$26{,}000$. Her aid package includes a Pell Grant of $\$4{,}000$, a state grant of $\$2{,}500$, a scholarship of $\$3{,}000$, work-study of $\$2{,}000$, and a federal loan of $\$5{,}500$. Find the total gift aid, the total self-help aid, and the remaining gap she must still cover.

Jayden receives a federal work-study award of $\$2{,}400$ for the year. The campus job pays $\$12$ per hour. How many hours must he work to earn the full award? If he works 10 hours per week, how many weeks will that take? Explain one advantage of a work-study job compared with a regular off-campus job.

Valeria is deciding which scholarship to apply for. Scholarship A is worth $\$5{,}000$, takes 10 hours of work, and she estimates a $1$ in $20$ chance of winning. Scholarship B is worth $\$1{,}000$, takes 3 hours, and she estimates a $1$ in $4$ chance. Find the expected value of each scholarship and the expected value per hour of work. Which is the better use of her time?

Noah's parents are divorced, and he lives mostly with his mother. He is a dependent student. College X has a cost of attendance of $\$38{,}000$ per year and offers him $\$12{,}000$ in grants. College Y has a cost of attendance of $\$22{,}000$ and offers $\$3{,}000$ in grants. Explain whose financial information he generally reports on the FAFSA and what the Student Aid Index (SAI) is used for. Find the net price of each college per year and over four years. Then explain what the family could do if a parent lost a job after the FAFSA was filed, and recommend a college with your reasoning.

Camila's college costs $\$28{,}000$ per year. Each year she expects a Pell Grant of $\$3{,}500$, a scholarship of $\$4{,}000$ (renewable only if she keeps a 3.0 GPA), work-study earnings of $\$2{,}500$, and a family contribution of $\$6{,}000$. Her family also has a 529 plan with $\$10{,}000$ to spread evenly over four years. Find the yearly gap and the total she must borrow over four years. Then find how the gap changes if she loses the scholarship. Write a plan with at least two actions that could lower her borrowing.