Learn from Marvin's Mishaps
How Marvin spent more for college than he had to (after serving two full years)!
Marvin's case illustrates a worst case scenario involving the education award.
Who is Marvin?
Marvin will be the first member of his family to attend college. While this makes his family proud, it also means that no one in his immediate circle can share college financial aid experiences with him.
He has served with AmeriCorps for two years and earned two education awards for a grand total of $9,450. He's planning to attend a four-year public university in his home state of Washington.
What went wrong?
Before going into what went wrong for Marvin, let's take a look at what went right. Marvin applied to school in January, mid way through his second service year. He also filled out the FAFSA (Free Application for Federal Student Aid) before he even knew he would be accepted.
The COA (Cost of Attendance) at Marvin's school totals $12,066. It assumes that students live a low-cost "college-student" lifestyle. The COA is a magic number: Student financial assistance offered by a school cannot exceed the Cost of Attendance. (Keep this in mind as it comes back to haunt Marvin later.)
Even though Marvin is still considered a "dependent" and is required to record his parents' income on his FAFSA, he comes from a low-income background so his financial aid offer is the maximum available to a student in the state of Washington.
| Pell Grant | $3,300 |
| SEOG (federal grant) | $300 |
| WA state need grant | $2,538 |
| Work Study | $3,000 |
| Perkins Loan | $2,928 |
| Total financial aid offer | $12,066 |
The bulk of Marvin's offer is grants, which do not need to be repaid. He also receives an offer of a Perkins Loan, which has the most favorable terms among the family of student loans.
The reason Marvin receives a $12,066 offer is that the school determined his need is to be that amount. Need is figured by taking the Cost of Attendance and subtracting the Expected Family Contribution.
Cost of Attendance – Expected Family Contribution = Need
Since Marvin's Expected Family Contribution is $0, he's eligible to receive the maximum financial aid package for a full-time undergraduate student at his school.
If Marvin can sustain his FAFSA numbers for his four years of school, three-fourths of his education will be paid through grants and one-quarter through Perkins Loans. This is a terrific scenario:
- He can hold on to his $9,450 in Education Award vouchers to repay the Perkins Loans,
- Buy necessary educational equipment such as a computer,
- Or, use the education award for graduate school or continuing education courses after he's finished.
Unfortunately, none of this will happen for Marvin.
