Archive for the 'FAFSA' Category
What you need to know about financial aid BEFORE choosing a college
College and Finance is all about giving students and families the best information. With this in mind, Todd Johnson, who is the principal college admission consultant for College Admissions Partners, has written a two-part guest post on saving money via financial aid and other methods (Be sure to check out Part II: 7 Money Saving Questions to Ask Your College, after reading Part I). Todd provides professional and personalized service to help students and families through the complete college admissions and financial aid process. Needless to say, he is well versed on the subject; so without further introduction, here is part one.
With the high cost of a college education, you do not want to pay more than necessary. Yet thousands of families pay too much for college every year because they don’t understand the basics of financial aid and don’t know the right questions to ask. So let’s learn how to save money.
There are three types of financial aid for college:
1. Grants or Scholarships
2. Loans
3. Work-study programs.
– Grants and scholarships are free money that you do not need to pay back. Most grants and scholarships come from the federal and state government or from the individual college.
– Loans need to be paid back after college.
There are many loan programs available from the federal and state government. Most of these loans have fairly low interest rates. There are also private loans available although these generally have a higher interest rate.
– Work-study Programs are jobs offered to students on the campus of the college in order to help them pay their tuition.
The difference between need based financial aid and merit based aid:
– Need-based aid is given by all colleges to students who have demonstrated need. Anyone who can’t pay the full cost of the college has need.
A form called the Free Application for Federal Student Assistance (FAFSA) determines the amount of need for federal grants and scholarships. Many highly selective colleges also require a form known as the Profile form The FAFSA form is filled out after January 1 of the year the student will first attend college.
The FAFSA and Profile forms ask questions about the income of the parents and student using information that you gave on your tax returns. These forms also ask questions about the amount of money you have in savings or investments. The Profile form is more detailed than the FAFSA form. Once these forms are completed, the government uses the FAFSA form to determine how much your family can pay for college. This is your expected family contribution or your EFC. Your EFC is the same regardless of the cost of the college. Similarly, the individual colleges who use the Profile use that form to determine what your family can pay for college.
Your need is the cost of the college you are looking at minus your EFC.
For example, if you are looking at a college that costs $20,000 a year and your EFC is $5,000, your need at that college is $15,000. If you are looking at a college that costs $40,000 a year, your EFC is still $5,000. Your need at this college is $35,000.
– Merit-based aid includes scholarships typically for students who have good grades or have some other special talent such as athletic or musical talent. Most highly selective colleges offer little or no merit-based aid.
When considering which colleges you want to apply to, you should ignore the cost of the college. Yes, you read that right. Ignore the stated cost of the college when you are first deciding which colleges to investigate further. You will see why because in part two where we discuss the questions to ask colleges that will save you thousands of dollars.
March 04 2009 | College Technology and FAFSA and Financial Advice and Financial Aid | 1 Comment »
Today I read an interesting article about Harvard boosting their financial aid. Specifically, Harvard’s goal was to make the $45,620 yearly tuition price tag more affordable for everyone. The first thing I thought when I saw the headline was “about time!”
Students who come from families that make less than $60,000 annually already don’t have to pay anything to go to Harvard, but what about students who come from families that make more? Harvard found that students from financially well-off families (meaning middle class, and upper middle class) were forced to hold jobs that sometimes hampered their overall college experience. This is much like the plight I have had in college, as well as my siblings and many of my friends.
What do we do for the students who aren’t poor enough to receive FAFSA or university financial aid, yet aren’t rich enough to have their parents fund their entire education? It seems that this gap is ever increasing in today’s economy. When I fill out the FAFSA, it claims my parents can afford to give me $40,000 a year for college. I’m not sure in what universe my parents could ever give me $40,000, but it’s not this one. They can’t give me very much at all, yet I am denied aid because they just surpass a certain economic bracket. Therefore, many, many students like me are forced to take out huge loans and work constantly to afford tuition and fees. Which, as Harvard leaders saw it, can take away from the college experience. I still think it’s a great idea to get a job in college, but if you’re having to work 40 hours a week for school, you won’t be able to go through some of the greatest learning experiences in college (you’ll be too busy).
Harvard has now made it so that families between $60,000 and $120,000 would have to pay 10% of their incomes. That’s still a lot of cash, but paying $12,000 a year for a Harvard education, down from $19,000 is quite a drop when you think about it. If a family earns $180,000, their bill would drop from $30,000 to $18,000. To be fair, Harvard is the world’s richest university, so other schools won’t have the type of endowments to support that much aid. However, even making a little effort would have a positive effect.
Given these often trying economic times, it’s nice to see that some Universities are finally coming around and realizing how difficult it is to afford a college education these days. In March, I will most certainly fill out the FAFSA again. I know I’ll only be eligible for low interest rate loans, and I’ll have to continue to work my way through college, take out loans, and even try to find a few weird scholarships to make up the difference. Maybe other schools will come around and realize that despite what a family may make, they may not be able to simply pay for all (or even most) of a college education.
December 10 2007 | FAFSA and Financial Aid | 1 Comment »
When you or your child is accepted to college, the next issue that comes up is how to afford the education. Not everyone can simply tap the college savings account. Also, not everyone feels completely comfortable going to the bank and taking out a sizeable loan for a degree that isn’t guaranteed to get you a job offer. For these people, it is always sensible to apply for a FAFSA. FAFSA stands for Free Application for Federal Student Aid.
Persons who fill this form out, and meet the requirements will often receive aid from the government. The aid can be in the form of straight scholarship, or an offering of a federal subsidized loan. Federal loans are different than the typical Bank Loan in that the interest rates aren’t as steep, so you aren’t paying as much over the long run. However, it is important to note that it is still a loan that you will need to pay back.
In order to fill it out, you simply have to go to the FAFSA web site. There will be a lot of identification questions, and you will also have to get a FAFSA Pin number. This number is a special number that is given to you for identification purposes. If you or your child is a male, ages 18 to 25, in order to be eligible for federal aid, he must register for Selective Service. This registration can be completed automatically in the FAFSA online application.
There are a variety of deadlines, but the most common deadline for FAFSA is March 1. This is the deadline for priority consideration. FAFSA is given out to millions of people every year, and it is on a first come, first serve basis. So in order to be considered first, you should complete the application as soon as possible. It can be done before you complete your taxes, you must simply estimate incomes and other assets. Even if your family is financially well off, it never hurts to apply for FAFSA and take the Federal Loans (which are offered to every applicant, regardless of income).
For more information, or to actually apply, see the official FAFSA web site: www.fafsa.ed.gov
May 29 2007 | FAFSA | No Comments »