Hearing the words “Financial Aid” can be scary for students and parents. This process can be overwhelming and confusing to first time college students and their parents. To ease some of the anxiety surrounding this process, the following section will provide information about the steps involved in getting the most out of your financial aid. Due to the amount of information, it is impossible to become an expert, but this section will help you to get through the process in a calm manner
What is Financial Aid?
- In simple terms, Financial Aid is financial assistance intended to help students reach their educational goals (i.e. money for college).
- Financial Aid can appear in forms of grants (aid that does not have to be paid back), scholarships (aid that does not have to be paid back), work-study (arrangement where a student combines work and college study), or loan programs (money needs to be paid back beginning after college graduation).
- Financial Aid helps to make up the difference between how much a family can actually pay, what a college tuition costs, and how much can be disbursed to you through federal, state, and/or institutional (college of your choice) funds.
How Does It Help Families?
- Families are the primary source of funds for college, making tuition a major investment in the lives of parents and students.
- Colleges expect government agencies and private student aid programs to pay a share of the costs for attending. Most families will be expected to contribute some amount (although not the whole amount), no matter what their financial circumstances may be. This is where financial aid will come into play and help to alleviate some of the costs involved in the college process, by assisting in paying the difference between the costs of college and the amount a family can pay.
What Is Involved in College Costs?
Cost of college includes:
- College Tuition and Fees: varies by colleges. Private institutions are usually the same for all students. Public institutions can differ depending on a student’s course load or state of residency (in-state students will usually pay less than out-of-state students). Fees can include, student association, green fees, computer fees, and insurance (these will vary by college).
- Room and Board: Colleges have many dorm room and meal plan options affecting the overall cost of attendance.
- Books and Supplies: These costs will vary by college, semester, and major.
- Transportation: These costs will vary and can depend on where the school is located, parking fees, and cost to have a car on campus (if available option).
- Personal Expenses: This can be a shocking amount, but it is important to remember what a student spends money on now will not change too much in college (i.e. movies, snacks, music, haircuts, clothes).
How Financial Aid is Determined
- Today most financial aid is awarded according to need.
- Through the required paperwork, colleges can gather information from families about income and assets in order to determine what their share of the total costs would be (there is often a significant difference in what a family feels it can pay and what the college thinks they can afford to pay).
- Expected Family Contribution (EFC) is determined to help estimate what a family should pay for tuition. This is assessed according to the provided calculation of the college. Two methods to determine EFC include:
- Federal Methodology (created by Congress): takes into consideration income, assets, expenses, family size, and other factors to help evaluate a family’s financial strength.
- Free Application for Federal Student Aid (FAFSA): online form used to gather information required for Federal Methodology and determine EFC. All students applying for financial aid should fill out this form yearly.
- Colleges will send out Financial Aid Award Letters in the Spring. It is important to compare these letters closely and to determine the “bottom line’ (total net payment to the college).
- Financial Aid is disbursed through grants, scholarships, loans, and work-study. It is important to pay attention to detail when looking at award letters. Although an award from one college may be twice as much as another, it is not always the better package. The one with more may include loans you will have to pay back versus grants in the smaller package that you will not have to pay back.
- Grants: Do not have to be repaid and are available though federal government and state agencies (will see in forms of PELL and TAP).
- Scholarships: “Free Money” which can be in many different amounts (does not have to be repaid). Scholarships are available through many different avenues and can be awarded based on need, academic achievement, or a talent. It is important to constantly be checking on these through your school counseling office.
- Work-Study: Students will have a job on campus which will help to offset costs of attendance.
- Loans: Need to be paid back once graduation is completed.
- Federal Stafford Loans: fixed-rate, low interest loans.
- Subsidized: Federal Government will pay interest while you are in school. You will begin paying interest on loans once you graduate. (This is a great loan!)
- Unsubsidized: Interest begins as soon as you accept the loan and continues through payments. (Should pay interest as it accumulates.)
- Federal Perkins Loans: low interest loan for students with exceptional financial need.
- Federal Parent PLUS Loans: loans for parents which can fund the student’s entire college education.
- Private Student Loans: should be used only after all other options have been exhausted.
Watch the Calendar for Important Dates
- October: Begin completing FAFSA and institutional forms
- February: Be aware of college priority dates and deadlines
- Late February and March: Calls from colleges with questions for students in special circumstances will begin
- End of March: Financial Aid and admissions notices begin to be mailed
- April: Students compare offers from schools
- May 1: Students must tell all schools yes or no and send in deposits
Checklist for Students and Parents/Guardians
- If you are in doubt about whether or not to apply for financial aid, APPLY!
- If you do not have a social security number, obtain one
- Do not wait for college acceptances before beginning to apply for aid. File as soon as you can (forms become available January 1). You do not need a completed tax return to file, estimates will be adequate for FAFSA. Complete FAFSA before February 1 if at all possible.
- Fill the FAFSA out online. Obtain the worksheets to fill out prior to going online (www.fafsa.ed.gov). By applying online, it is quicker and there are prompts that will help you to navigate through the process. You will need a PIN to fill out all the paperwork and this can be obtained at www.pin.ed.gov. This will be emailed to you because it is needed well before filling out the paperwork. Write your PIN number somewhere safe because you will use it every year you are in college!
- Be aware of Early Decision/Early Action deadlines in order to fill out Financial Aid information needed by the colleges.
- Income tax forms should be filed as early as possible (beginning January 1st). This will provide accurate data on the forms and allow you to be awarded aid from colleges with early financial deadlines.
- Inform colleges about your interest in applying for aid. Be aware of and list deadlines of information for each college as well as any supplemental forms the college may require.
- Apply for federal and state funds by completing the appropriate questions of the FAFSA.
- Check for scholarships of which you may be eligible:
- Each college/postsecondary institution (your best source)
- Those posted in the counseling office (use your counselors as resources
- Local and State scholarships
- Begin your Stafford loan application by clicking the right boxes on the FAFSA form.
Details to Remember
- With all written communication to financial aid offices, put the student’s name and social security number on every page.
- Keep all financial aid worksheets and forms. Copy everything for your own records.
- If you have questions about an item, do not guess. Seek out your counselor or speak with a financial aid officer directly.
- Do not leave blank spaces on forms…use zeros.
- Proofread everything! Make copies of everything!
After filing your Forms
- If you have properly completed the FAFSA form, you will receive a Student Aid Report providing you with your eligibility index for federal and state aid.
- If there are errors or incorrect information on the Student Aid Report (SAR), you will be able to make corrections online.
- Once you receive a letter of acceptance from a college, a financial aid offer will be sent shortly after. Once a college is chosen, you will be asked to sign an acceptance of the amount received in your financial aid package for that particular school. After signing and sending in all documents, the money will be sent to your choice college financial aid officers.
- Make sure to ask your school counselor any questions you may have, they are here to help! If they cannot help you they will direct you to a financial aid officer at a college.
Different Ways to Obtain Financial Aid
Colleges do not always provide a financial aid package that is the most helpful for your financial situation. If this were to happen to you, there are other avenues you can explore in order to gain more money towards your cost of attendance.
- Credit Through Testing
Students can earn college credit by taking an exam. Through programs such as AP you can receive college credit by passing a standardized test (this is equivalent to the CAP classes offered at AuSable). The more you take in high school, the less you will have to pay full price for in college, and the more lenient you can be choosing classes. There are usually requirements associated with this type of testing so be sure to remain aware of what is expected in order to gain credit.
- Cooperative (co-op) Education
Co-op programs are a blend of classroom study and work experience related to your major of choice. During your undergraduate program, some colleges may arrange a job and work schedule but the employer will pay for the work, helping with the cost of college. This can be a great experience for students who work in a field of their major interest. This is not a common alternative and requires research on a student’s part about what colleges may or may not offer this type of program.
- Accelerated Graduation
Students may take a maximum course load in college, earning more credits for less money and graduating earlier (i.e. graduating in three years versus four years). This option should be researched only by students who feel they can manage a heavy academic load. Not all colleges offer this program and it is important to talk with your school counselor, and a college admissions officer, if this is something you are considering.
- Two Years, Then Transfer
Due to lower costs at a community college, many students will complete two years in this institution and then transfer to a four-year college. This will help in saving money because the student is able to achieve required general education courses at a lower tuition rate. Also, if students do well in a community college, they will oftentimes qualify for a better financial aid package at a four-year college.
- The Military
Military options are something high school students are bombarded with through mail, email, and school. The armed forces are able to offer an array of tempting educational benefits to help pay for college including, scholarships, education assistance plans, and career experience. Students who are willing to take this option need to complete an Armed Services Vocational Aptitude Battery Test in order to qualify for certain careers. If interested in these options, talk with your school counselor and they can help to provide you with the right resources and information.
- Part-Time Employment
According to recent research, studies show that more than half of college students work part-time to help cover the costs of college. It is important to keep in mind that academics should be the top priority of a student and employment should not jeopardize this. If thinking about this option, students should consider working no more than 20 hours a week.
Apprenticeships offer students with the option of earning on-the-job training while being supervised by a qualified member of a certain profession. All apprenticeship opportunities have different requirements and positions are very limited. If this is an option you are interested in, talk with your school counselor, local state employment office, or the Bureau of Apprenticeship in your area (Champlain Valley Educational Services).
AmeriCorps is a network of national service plans that engage volunteers to meet critical needs in education, public safety, health and the environment. Members are eligible to receive an education award after completing a term of service. The amount of the award depends on the program in which you participate. If this is an option you are considering talk to your school counselor or go to www.americorps.com
- www.casey.org: many useful downloads through the Casey Foundation which supports students in foster care.
- www.collegegoalssundayusa.org: information on events held nationwide regarding financial aid, and many useful tips and tools for filling out forms.
- www.ed.gov: a very useful website to help answer almost any question!
- www.fafsa.ed.gov: everything you need to know about FAFSA.
- www.collegeboard.com: information about the financial aid process as well as facts and information about many different colleges. This website also lists over 2,300 scholarships, contests, and loans.
Glossary of Financial Aid Terminology
- Award Letter: How colleges/universities notify a student about the financial assistance that can be offered to him or her. This letter is detailed and outlines where each sum of money will come from. This letter includes deadlines and provides the student an opportunity to compare packages of different schools.
- Cost of Attendance: This can also be referred to as cost of education or budget. This is the total cost of attending a college/university. This price includes, tuition and fees, room and board, books and supplies, and personal expenses. These are estimations published by the institution.
- Expected Family Contribution (EFC): The total amount of college costs students and their parents are able to pay. This amount is calculated with information gathered on income and assets of one academic year.
- FAFSA on the Web: An electronic option for completing the FAFSA form.
- Financial Need: The amount your family cannot pay towards college cost of attendance.
- Free Application for Federal Student Aid (FAFSA): A form completed by all applicants for federal aid. This can be filed any time after January 1 and it is free to fill out.
- Scholarship or Grant: A type of financial aid that does not have to be repaid.
- Self-Help: Financial aid, such as loans and jobs, that require repayment or employment.
- Work-study: An arrangement with the college/university where a student will combine employment and college study. This is completed on campus within different departments.
12 Myths about Paying for College
College is just too expensive for our family.
A college education is more affordable than most people think, especially when taking into consideration how much more a college graduate can earn in their lifetime compared to a high school graduate. An expensive tuition is not a requirement to get a good education. In 2008-2009 , the average tuition cost was $6,585.
There’s not a lot of financial aid available.
More than $106 billion in student financial aid is available for undergraduates. Most students applying will receive some type of aid. Most aid is offered less in grants, and more in loans, but each financial aid package should be studied in order to ensure the best one for you is chosen.
My family’s income is too high to qualify for aid.
Financial aid is intended to make a college education available for students of families in all financial situations. Aid administrators often take into account other factors such as family members enrolled in college, and mortgages on homes. It is not uncommon to see aid awarded to families you would think “made too much”.
My parents saved for college, so I won’t get aid.
This is always a good idea, and since aid comes mostly in the form of loans, it is something you will have to repay. By saving money, it could mean you will have fewer loans to repay and it will not make you ineligible for aid if you need it.
I’m not a straight-A student, so I won’t get aid.
You may qualify for more scholarships based on merit, but aid is based on financial need and does not take into consideration grades.
If I apply for a loan, I have to take it.
Families are not required to accept a low-interest loan if it is awarded to them. It is wise to take all reward letters from different colleges and compare them with different debt instruments in order to determine the best financial aid package.
Working will hurt my academic success.
Research shows students who work a moderate amount will often do better academically. Students attempting to juggle full time work and school will struggle. By obtaining a work-study job in a department related to career goals, you will be able to gain experience, create ties and relationships, and earn money to help pay for college.
Millions of dollars in scholarships go unused every year.
Professional scholarship search services often publicize this statistic but it is not always truthful. Most unclaimed money is slated for a small number of candidates, such as employees of a specific corporation or organization. Most financial aid comes from the federal government, although it is a good idea to research nonfederal sources of aid.
My folks will have to sell their house to pay for college.
The value of the home you live in is not considered in calculations for federal aid. Colleges may take into consideration how much your home is worth when determining federal costs, but income is a far greater factor in this calculation.
I should live at home to cut costs.
Although it is wise to determine where you may be able to cut college costs, it may not be the best decision to live at home. When contemplating this decision, be sure to take into consideration gas costs and parking costs on campus. Living on campus can provide you with many opportunities and an experience you cannot get anywhere else.
Private schools are out of reach for my family.
It is recommended by experts to postpone cost considerations until late into the college selection process. The most important thing is to consider a school that meets your academic, career, and personal needs. Private colleges often offer more financial aid to attract students from all income levels, so you might have a better package from a private school.
We can negotiate a better deal.
Many colleges will be sensitive to a specific financial situation in a family, such as high medical bills that have been overlooked. Though this is rare, and many schools will adhere to original packages that are awarded to the student. Colleges will not adjust awards just because a family got a better deal at a different school.