Financing a College Education
Just about everyone is interested in information on financial aid. Students and their families should not assume that they cannot afford a particular college or university until they have investigated all aspects of financial aid.
There are two basic categories of financial aid, merit-based and need-based. Merit-based is generally given in recognition of special skills, talents and/or academic ability. These include merit scholars, top ten percent of the class, outstanding athlete, accomplished musician, etc. The second category, need-based, represents the major portion of help available for post-secondary education.Need-based (commonly called financial need) is the difference between what it will cost to attend the post-secondary institution and what the family will be able to pay (expected family contribution). There are basically four categories of financial aid:
- Grants - money given to the student, usually because of financial need
- Scholarships - money awarded because of academic achievement, outstanding talent or skill, and/or financial need
- Work Study - money the student earns through a job on campus
- Loans - money that must be paid back
Grants and scholarships are free money that do not have to be paid back. Loans and work-study jobs are considered self-help. It makes sense to apply for grants and scholarships before taking out loans. A college will put together a financial aid "package". This package is a combination of grants, scholarships, loans, and/or work-study. A package varies from college to college so it is important to compare financial aid packages.
Applying For Financial Aid
There are two financial aid forms that you need to be aware of - the FAFSA (Free Application of Free Student Aid) and the CSS Profile, required by some colleges and universities.
All students interested in obtaining financial aid must complete the FAFSA. This form will become available (online and in the guidance office) in December of the senior year and cannot be filed prior to January 1. It is recommended that families complete their income tax form before completing the FAFSA, as a lot of the same information will be needed. If the family income tax return is unable to be completed in a timely manner, estimated figures (based upon the last year filing) may be substituted. Approximately 3-10 weeks after families have mailed their FAFSA, they will receive a SAR (student aid report) which will inform the student and the parents of their EFC (estimated family contribution). This is the amount that FAFSA has determined the family can afford to pay for education that year. If the cost of the college is more than the EFC, you have a financial need and should be eligible for financial aid. This aid may come in the form of grants and or loans. Colleges are not obligated to fund the full amount of the EFC. Many of the more highly endowed schools do fund the entire amount, however it is important to ask each school’s financial aid office what policy governs the particular college or university.
In addition to the FAFSA, some private colleges require submission of the CSS/Financial Aid Profile. The Profile is a supplemental need analysis document used to determine eligibility for private, nonfederal funds. The Profile requires a registration fee and an additional fee for information sent to each college. The Profile generally becomes available on or about October 15th of each year and is available both online and in the guidance office. We recommend that this form be completed only when required by a school.
Financial Aid Workshops are available each year through the local community college and special workshops are sponsored by the Morning Call. These are generally held December - February.
All students and their families should complete the FAFSA as early as possible, even if they feel they will not quality for any need-based aid because of their income. Colleges verify that students are not eligible for federal or state aid before they award institutional and/or private funds. Some loan programs require the FAFSA. Families are well advised to make a copy of their FAFSA before it is mailed. It is also recommended that families keep a copy of their income tax return forms. The FAFSA must also be completed in order to be eligible for a federal Pell grant.
Parents and students often find that they must take out a loan to finance educational expenses. Lending institutions provide Stafford loans to students and PLUS loans to parents. Repayment of a Stafford loan begins after the student has graduated. The Subsidized Stafford Loan is for students with financial need and the unsubsidized Stafford Loan is for students without financial need. (The government pays the interest on Subsidized Stafford Loan). PLUS loans are not based on financial need and repayment begins within 60 days.
Scholarship money sometimes goes unclaimed because many scholarships have very specific eligibility criteria. Academic scholarships generally require a 3.5 GPA or better, high SAT scores, excellent recommendations, and high involvement in extracurricular and community activities. Athletic scholarships or special talent scholarships go to the student who has demonstrated outstanding abilities.
When looking for scholarships, it is prudent to consider the following:
- Start looking for scholarships during the spring of the student’s junior year.
- Contact the financial aid office when applying to colleges to learn about scholarship opportunities.
- Apply for local scholarships.
- Scholarship deadlines are not flexible. Some scholarship applications are due soon after being publicized.
- Scholarship opportunities are often overlooked. Families should check with their place of employment, their church, and other organizations with which they are associated to see what scholarship opportunities may be offered.
- The guidance office has books and computer access where scholarship opportunities can be found.
- Check to see if financial aid and scholarships are renewable.