College bound -- what is a financial aid package?

A college financial aid officer makes thousands of crucial decisions each year. Some of them are very unpopular. Others may make possible the seemingly impossible -- a college education for a student who thought it was completely out of reach.

Not everyone who requests aid will receive it, for funds are obviously limited. The neediest, of course, are first in line for some kinds of aid, but government regulations make low-cost guaranteed loans available to everyone.

Once a student has been accepted at a college and need for aid is determined, it is up to the college's financial aid officer to decide who is offered aid and how much.

"When awarding government grants, loans, and jobs," says Barry McCarty, director of financial aid at Lafayette College, "we are obligated to serve the neediest students first, those students for whom the gap between expected family contribution and college costs is the widest."

A college has more leeway, however, when awarding its own funds, and special considerations may come into play. Preference may be given to students with exceptional talents and abilities, those planning to study in a particular curriculum, or students of various racial and socioeconomic backgrounds which are underrepresented at the college.

"About two-thirds of the students admitted to Lafayette who demonstrate need are offered college-based aid," Mr. McCarty points out. This is similar to the effort made by other private colleges.

A student denied sufficient aid at one college may be offered more from another and may receive widely varying offers of aid from several. Indeed, many students "shop" carefully for the most attractive package before deciding which college to attend.

What constitutes an aid package? Financial aid officers start with a base of expected family contribution (including a portion of the student's own savings and income from a summer job). From there, funds may be added from various sources.

* A student may be eligible for a federal Basic Educational Opportunity Grant of up to $1,900.

* In states that have a state grant program (including New Jersey and Pennsylvania), a student may also be awarded a state grant of up to $1,500. Neither state nor federal grants need be repaid.

* National Direct Student Loans are available for up to $1,500 a year. Payment and interest at 4 percent are deferred until after graduation.

* A government-subsidized work-study job may be awarded to a student who needs it. As of Jan. 1, students are now to be paid at least minimum wage. Aid officers estimate that $700 to $900 can be earned each year by working 8 to 10 hours a week. Students are assigned part-time campus jobs according to their interests and abilities. The federal government picks up a large part of the cost of employing the student.

* Some colleges maintain their own revolving funds, from which loans are made on a basis similar to that of the National Direct Student Loans.

* Most colleges also have a pool of financial aid funds, from which grants may be awarded to particularly worthy students. Lafayette's funds, for instance , come from the college's endowment, corporate gifts for financial aid, donations from alumni, parents and other friends of the college, and other college funds.

* Most institutions have special endowed scholarship funds that have been given for very specific purposes, such as for "an American student preparing for service under the Board of Foreign Missions of the Presbyterian Church" or "an engineering student from Swarthmore." A student who fits the conditions of one of these scholarships will automatically be considered for it when applying for aid.

Where a gap exists between the offered aid and a family's available funds, many students take advantage of additional government guaranteed student loans or parent loans from private sources.