Financing a college education is becoming more difficult for many families. If you think you will need financial assistance in order to attend college, be sure to acquaint yourself with the procedures that must be followed in applying for financial aid.
We can’t stress this enough: Meeting deadlines is imperative!
Regardless of a family's financial situation, a college education is a significant investment that requires careful research and planning. When it comes to financing a college education, the fundamental premise is that, to the extent they are able; it is the family's responsibility to pay for a child's education.
In the 1960's, federal and state financial aid programs were developed to help our nation's most needy families access higher education. When competition for students increased in the 1990's colleges began to use merit (non-need based) scholarships to encourage selected students to enroll. Today, families encounter a combination of need and merit based financial aid options.
The single most important factor in determining aid eligibility for most families is parental income. Other factors include non-discretionary expenses (such as taxes, medical expenses and basic living expenses), parental assets, and the number of dependents attending college.
- To the extent they are able; parents have primary responsibility to pay for their dependent children's education.
- Students also have a responsibility to contribute to their educational costs.
- Families should be evaluated in their present financial condition.
- A family's ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect ability to pay.
When you evaluate the packages offered by colleges, remember, the largest award may not necessarily be the best. Consider differences in cost of attendance. The largest dollar offer may also be the one at the most expensive college, and, therefore, the one with the greatest unmet need or "gap" between cost and available resources. If you cannot fill the gap with other resources, you still may not be able to enroll in that college.
Even two offers that fully meet your need may not be equal. If the estimated student expense budget used to calculate need is unrealistically low, you may have more real unmet need than the award letter suggests. Some institutions estimate their costs conservatively to imply a more complete meeting of need than actually exists. You should compare stated costs with similar institutions to verify reasonableness. Consider, too, the loan burden you will have at the end of college in light of your long-range plans. Will you be attending graduate school? Will you be entering a lower-paying profession? If so, the cost of loans might be extremely burdensome.
If you have questions about your financial aid package, you or your parents should contact the financial aid administrator at the college.
Most colleges and universities will also require information from the non-custodial parent with the expectation that contributions to the college expenses will be made if able. The College Board’s Divorced/Separated Parent Statement should be available from the college’s financial aid office. Colleges understand that there are many family circumstances and would be happy to speak with you confidentially if you have specific questions.
Early Decision Candidates
Early Decision candidates MUST communicate directly with the college’s financial aid office. In most cases, you will need to complete the CSS PROFILE in November and you may need to complete additional institutional forms. The college will likely give you an estimated award package at the time of admission. Your aid award will not become official until you submit a FAFSA in order to become eligible for federal aid.
Types of Financial Aid
Once the admission office decides to admit a candidate and the financial aid office has determined that the candidate qualifies for financial aid, the financial aid office puts together a financial aid package which is a combination of several types of financial assistance.
- Grants: Federal, state and institutional grants are financial aid awards that you do not need to repay.
- Loans: Most are interest free during enrollment; student loans must be repaid with interest over a period of time after graduating. Subsidized/Stafford loans are need based loans on which the federal government pays the interest while the student is enrolled in college and for six months after graduation. Any student, regardless of financial eligibility can apply for an unsubsidized Stafford Loan.
- Work: The vast majority of financial aid recipients will be expected to hold part-time jobs
- Note: Not all schools guarantee that they will meet the full need of every admitted student. Most schools are unable to fund everyone, which causes a “gap” (unmet need) for which you are responsible. Other schools that are unable to offer aid to some applicants choose to deny admission instead.
- Institutional: Institutional aid comes directly from and is controlled by the individual college or university. Amounts of institutional aid offered by one college may differ significantly from what may be offered by another and can be based on financial need and/or merit.
- Private: Private sources include foundations, religious, cultural, community, or fraternal organizations. This funding may be scholarship or loan and can be based on merit, need, or by association with the awarding organization.
- Federal Government: The Federal government administers a number of grant and loan programs designed to aid students with college costs.
The Free Application for Federal Student Aid (FAFSA) is the financial aid application required by all colleges and is processed by the Department of Education. Some colleges and private scholarship programs may also require the CSS/Financial Aid PROFILE processed by The College Scholarship Service of the College Board. It is important to check with the college financial aid office or scholarship program for specific application requirements.
- FAFSA: The FAFSA is available online at www.fafsa.ed.gov and should be completed and filed as soon after October 1 (and each subsequent year in college from your tax records from two years ago. The FAFSA calculates the Expected Family Contribution (EFC) based on a standard formula known as federal methodology. Each college's financial aid officer then determines each student's demonstrated financial need by assessing the difference between educational expenses (tuition, room, board and some expenses) and your EFC. Many families are required to submit additional information such as income tax records as a part of the process.
- Expected Family Contribution: The EFC and what the family feels it can afford to contribute often differ. Financial Aid Officers are there to help students and parents through the process—don't hesitate to contact them for help. College financial aid officers attempt to maintain loan and work levels that will allow reasonable repayment either during or following college.
Important Note: There should never be a fee to complete the FAFSA. If a website charges a fee, you are not using the correct online FAFSA!
- CSS/Financial Aid Profile: The CSS/Financial Aid PROFILE is available online at www.collegeboard.com and families can begin to complete this form in the fall of the senior year.
For the student who does not qualify for aid but finds it difficult to cover college costs, alternatives often exist. Seek out possible scholarships offered by the colleges of interest to you. Colleges will use scholarships to entice students who will enhance their student body (often students who are at the top end of the academic profile) to enroll.
Also pursue scholarships you might apply for from "outside" sources such as companies, foundations, and community organizations.
Tips for Pursuing Non-Need Scholarships:
- Be aware of deadlines.
- Treat any required essays with great care. Carefully read the qualification requirements and only apply for those scholarships if you meet the criterion.
- Like the college application, scholarship applications take time
- Are the non-billed costs (such as books and travel) used to determine financial need realistic?
- Is my full need being met with financial aid? If not, what is the gap?
- If the billed fees (tuition, room, board, activity, etc.) increase in future years, will the new costs be considered in awarding future financial aid?
- How many meals per week are covered by the dining plan?
- What portion of my aid is gift aid (grant/scholarship)?
- Must I accept all the financial aid offered in the financial aid package, or can I decline the loan or job without losing any other part of the package?
- What is the school's policy if I receive an outside, private scholarship? Will it be used to reduce the college grant or the self-help (loan/work) portion of my award?
- Is my top choice college (for academic and other reasons) feasible financially?
Every fall or spring students and their families are targeted to receive letters from companies claiming to be able to provide special access to scholarships, grants, or "guaranteed" financial aid packages. If you have to pay money to use the service, it is probably a scam.
- Both students and parents should learn as much as possible about the college financial aid process. Meet with college financial aid administrators to establish a relationship.
- Submit a FAFSA, even if you do not think you qualify for aid. Being rejected for federal aid is often a prerequisite for private awards.
- Apply for aid as soon as possible after October 1. Be aware of ALL deadlines.
- Inform financial aid administrators in writing about unusual expenses. Sometimes allowances may be made to assist you.
- Take advantage of tuition prepayment discounts. Some colleges offer discounts for early payment.
- Investigate company-sponsored tuition plans. Many employers will invest in the education of their employees.
- To avoid gift tax liability, money from grandparents should be paid in your name directly to the school.
- Apply! You cannot win awards or receive funds for which you do not apply, so pay attention to deadlines.
- Use scholarship search engines like www.finaid.org or www.fastweb.com to help you find the private sector assistance you need.
- Beware of scholarship scams. You should not ever have to pay a fee to file a FAFSA or to receive a scholarship.