Paying for College
Frequently Asked Questions, Glossary of Terms,
and Websites Regarding Financial Aid and Scholarships
Please
review all the basic information given on Financial
Aid Tips for College Applications which is both posted here on our website
and copied in the red Senior Folder which students get in the early weeks of school.
All terms in bold are defined in the glossary at the end of this document.
#1
How will we know what a college will expect our family to pay?
#3
What if parents tell a student that he is on his own and must pay for college
by himself?
#4
Is a high-priced school really worth it?
#5
When do I apply for financial aid? Do I
wait until I find out if I’m accepted?
#6
What level of debt is reasonable to assume by the end of college?
#7
How do I find a school that will give me merit
based aid?
#8
Do the schools on my list have a reputation for offering good financial aid packages?
#9
How do I get some of all that scholarship money that people always say is going
begging?
#11
How can I compare the financial aid package of one school to another?
#12
Why do schools leave a gap when constructing their financial aid packages?
#13
How will I be billed for college costs?
#14
What if I think I can pay the amount required by not in those two lump-sums?
#1
How will we know what a college will expect
our family to pay?
This
is most often based on the “federal methodology” used to calculate what each family
can pay for college. It is based on the information that the custodial parents
and the student eventually submit via the FAFSA, which is revised yearly and cannot be done until after January
1st . Meanwhile, you can get an estimate of what your EFC will be through one of several websites,
including:
www.finaid.org/calculators/finaidestimate.phtml
apps.collegeboard.com/fincalc/efc_welcome.jsp
http://www.nhheaf.org/calcs.asp
The
EFC will include a contribution expected
from both student and parent, including a portion from student summer earnings,
and a portion of savings. This will also take into account if parents will be
paying for college for more than one student in a year (i.e. the potential funds
for college from a parent will be divided by the number of students attending.)
Sometimes the EFC arrived at only through the FAFSA does not take into account important financial information which
affects your family (e.g. high medical bills, past debt, recent loss of job, etc.)
and you may only get a fair break by bargaining with financial aid offices or
dealing with schools which use the Profile and or an Institutional
Financial Aid form because these forms gather more detailed information about
your family’s financial situation. (On the other hand, if applicable to your situation,
those same schools are also more likely to inquire into the financial situation
of the non-custodial parent and request payment from them as well.)
#2
What if our family is not willing to dedicate
the full amount of the stated EFC to paying for college?
If a family has a relatively high EFC and is unwilling to spend it on college
expenses, it is REALLY important to have a family conversation about that and
be realistic about the cost of the institutions on a student’s college list. Is
it realistically possible for a student to make up a significant difference by
obtaining scholarships? (See # 9 below.) Many seniors have springtime heartache
when they have been accepted at a school of their choice and now realize that
they cannot afford to attend. We do not know your family’s financial situation or your financial priorities,
so you do need to get this clear between parents and student at the outset so
we can better advise you about a list of schools.
#3
What if parents tell a student that he
is on his own and must pay for college by himself?
The standards for consideration as
an Independent Student are very stringent-
see Glossary. This is probably because many parents might like to absolve themselves from paying
for their children’s college education in hopes that the institution would kick
in with more aid. At this point, the system would totally collapse if ALL students
requested aid. Colleges rely on all parents who are financially able to any degree
to contribute according to their means (not their desires….). The Federal Government,
which subsidizes a vast amount of aid in varying forms of grants, loans, and work-study,
certainly expects parents to do their parts and audits college financial aid offices
to make sure those institutions are complying with regulations and not “over-awarding”
students aid.
All
that said, if philosophically you believe your child should pay, be sure to let
him or her and us know that from the beginning because it would drastically affect
the approach to the college options. Community college and some out-of-state public
options may be most affordable.
#4
Is a high-priced school really worth it?
Of course, that totally depends on
so many factors that it’s hard to give a concise answer. The bottom line is that
some expensive colleges are worth it
for some students, and some are not.
Students should consider these factors:
If
you cannot answer yes to at least some
of these questions, perhaps the extra money might not be worth it to you.
#5
When do I apply for financial aid? Do I wait until I find out if I’m accepted?
NO!! Most schools establish a priority deadline for financial aid applications
and you could find yourself really out of luck if you do not meet that deadline!
It is the family’s responsibility to know the priority financial aid deadlines
for each school on a student’s list.
Furthermore, if the deadline is coming
and you have not completed tax forms for the past year yet, you MUST estimate
and meet the priority deadline for
sure. There will be time to submit revisions later.
#6
What level of debt is reasonable to assume
by the end of college?
It is EXTREMELY important to be realistic
about this. The answer may well depend on several factors: your aspirations to
go to graduate school; the type of career you anticipate; the ability and willingness
of your family to help you out at some future date; the kind of lifestyle you
anticipate living.
If
you were going to college in fall of 2008 and could get through with only the
federal Stafford Loans offered to qualified students by the federal government
in increasing amounts for each year of college, you would emerge at the end with
about
$19,000 to pay off, which at current rates, would cost about $209 per
month, or the equivalent of many people’s car payments. This is manageable for
most.
Even if an institution starts to add
a Perkins Loan or an institutional loan into the financial aid package, you may still come out with manageable debt.
However, encumbering yourself with much more debt can be quite unwise. You and
your family need to talk this over very carefully. Students who just say, “I’ll
take out a loan to pay for the rest” and end up $60,000 in debt may be looking
at over $600 a month in payments and vastly compromised abilities to pay for graduate
school, buy a car, or buy a house. There are some good resources for calculating
what you’ll need to repay on any one level of loan indebtedness: From www.nhheaf.org
you can get to
http://www.collegetoolkit.com/co/NHHEAF/index.aspx?Page=loan
or you can go on
http://www.ecampustours.com/payingforcollege/studentloans/repaymentcalculator.htm.
Of course, the best scenario is to
come out with NO debt, but if your family is needy, this is tough to achieve in
all but very rare situations, i.e. qualifying for one the most selective colleges
which has reduced loan expectations for middle class students, scoring in the
scholarship department, or attaining major merit based grants at a school that really wants you.
#7
How do
I find a school that will give me merit based aid?
Merit
based aid is given to the students on the top of any applicant pool in order to
entice them to attend that school. Occasionally, but not always, this might mean
attending a school that is less competitive than you might potentially be able
to gain admission to; however, there can be some amazing financial deals. (Review
#4 above…) Many of the top 7% of most highly competitive schools do not offer
merit based aid at all: they have far too many qualified applicants already and
usually do not need to use the merit money
carrot to lure any more!
#8
Do the schools on my list have a reputation
for offering good financial aid packages?
You
are very fortunate to be entering the college search process in the internet age
when there are many resources available to you. Check out the data available to
you to find out how well colleges do meet financial need, for example, on the
websites below:
www.collegeboard.com- Click on your school,
then look under Costs and Financial Aid.
www.bridges.com- Click on a school, then look
under Tuition and Costs.
Do
NOT limit your search initially according to tuition cost (except for circumstances
such as discussed in # 2 or 3 above). At times a private, higher priced college
can offer you a financial aid package which makes it possible for you to attend
for the same or less money out of your pocket than it would cost to go to a lower-priced
school. If you were talented and fortunate enough to get into
#9
How do I get some of all that scholarship
money that people always say is going begging?
Unfortunately, much of the unclaimed
money is tagged for very specific recipients and not just anyone qualifies. Two
good search engines for scholarships are www.fastweb.com
or www.NH93.com . It is important for students
at Coe-Brown to check the scholarship board in the Guidance area throughout the
senior year for local and national opportunities. Information for most of the
local scholarships that are given out at our graduation is not usually available
until about March each year. Due dates range from April to May 1st.
Institutional scholarships issued by
colleges are sometimes automatically issued to qualified applicants and at other
times are special situations for which you must apply. It is important to ask
questions of the individual admissions and financial aid offices about this. Often
initial information is available on the college website.
Do NOT pay someone to find you money.
Search yourself, or use the free services of the New Hampshire Higher Education
Assistance Foundation (NHHEAF) in
#10
If I do get scholarship money from outside
my college, will this affect my financial aid package?
Yes, it might. This depends on whether
or not you had a “gap” between your
EFC and the financial aid package issued.
Institutions will often have you sign
a statement that commits you to reporting any outside scholarship aid you might
receive, i.e. anything offered by a group or institution other than the college
itself. If they did indeed leave a gap,
scholarships may be used to fill it. If there was no gap,
some institutions may let you reduce the amount of loans you will need to take.
Obviously, it’s important to know the policy of your schools before you go to
all the work of applying for scholarships.
#11
How can I compare the financial aid
package of one school to another?
Good question. Unfortunately it’s not always
as easy as it might be since each institution has its own method of issuing a
financial aid package. It is MOST important to be comparing “apples to apples”.
For this you need to know the full cost
of attendance for each school, and unfortunately that is often not given in
the letter! The guidance office and NHHEAF also have forms to use for
this comparison. Please ask for assistance if you need it.
The
school that gives the biggest grant may not be the best deal. Approach this
mathematically: the bottom line of what you’ll need to pay is all that truly
counts.
#12
Why do schools leave a gap when constructing
their financial aid packages?
Unfortunately most schools are not wealthy
enough to meet the full demonstrated need
of their applicants. A school will use its resources to lure what it deems its
most desirable applicants to accept their offer and attend.
Other unofficial reasons for a gap may be that
a school knows that there is a second non-custodial parent who might help out
with the costs, or that they hope that a student will want to attend so badly
that he or she will find more funds to fill the gap through scholarships, working
more in the summer, taking out a loan, or seeking assistance from relatives who
might be able to help.
#13 How will I be billed for college costs?
Most schools will bill you twice a
year: half in mid-summer, due before the student arrives at school, and half in
December (along with holidays and property tax bills!).
#14
What if I think I can pay the amount
required by not in those two lump-sums?
There are tuition payment plans which
many schools will recommend which break up the full billable cost into 10 or 11 payments that you can make each month.
#15
We are getting a lot of financial aid,
but the school is still asking for a large deposit which we just don’t have. Can
we do anything about that?
Often an admissions or financial aid
office will accept a reduced amount of money for the deposit if your EFC is very low and you are getting substantial
aid.
Glossary
Award Letter- The notification from an institution about
your financial aid package. This might
arrive via e-mail or classic mail. To accept aid, there is usually a process of
signing and returning these. Don’t miss the deadline to do so! Also, please note that you do not have to accept
every portion of the offer.
Billable Costs- Out of the COA listed below, Tuition, Room, Board, and Fees are billed directly
to you. The remaining costs can be paid by the student and family as they arise.
Cost of Attendance (COA)
Tuition
Room
Board
Fees (these are mandatory and may add
significantly to the costs)
Book cost estimate
Personal expenses (toiletries, laundry,
clothing, entertainment, athletic equipment, pizza, etc.) This number tends to be higher for urban schools.
Travel This number will actually vary
depending on how far away you live.
Other particular expenses such as those
for music or art students
N.B. some institutions may include the top four categories in one Comprehensive Fee.
EFC- Expected Family Contribution as determined
by the federal methodology based on your submission of the FAFSA. (See links to estimators in # 1 above.)
FAFSA- Free Application for Federal Student Aid
available at www.fafsa.ed.gov . This is
definitely a free form- do not pay anyone for it. It cannot be filed until after
January 1st of any one year, but you should sign up earlier for pin
numbers for both parent and student as those will be needed to submit it. Go to
www.pin.ed.gov.
Financial Aid Package- This will be the institution’s proposal for
how you can meet its costs. It may include some or all of these sources of money:
Grants or Scholarships from the institution
Grants from the federal government, such as
the Academic Competitiveness, Pell or SEOGH
Loans from the institution itself
Loans from the federal government to the student:
Perkins,
Work Study
Parent Loans (PLUS)
Student and Parent savings
Student Summer Earnings
Full demonstrated need- If an institution pledges to meet “full demonstrated
need”, it means need as based on submission of whichever financial aid
forms it requires; always the FAFSA, and sometimes either the Profile or an Institutional
Financial Aid form or both. Such an institution should not leave you with
a gap.
Gap- A gap
exists if the total offer of the financial
aid package plus your EFC does
not equal the cost of attendance for
a particular school. For the purposes of finding out whether or not you have a
gap, we advise NOT including any offers
of a Parents’ Plus loan in your calculations. In our opinion, that would be a
possible method of filling a gap, along with other ideas mentioned in #10 above.
Grant- Money which does not have to be repaid, usually
offered to you by an institution, similar to a scholarship.
Independent Student
There
are only 8 reasons recognized by the financial aid process for which one can be
independent of parents when it comes to paying for college:
Being over 23
Going to graduate school (after the
B.A. level)
Married
Supporting own child more than 50%
Supporting another dependent more than
50%
Both parents dead; a ward of the state
Currently serving on active duty in the
Armed Forces for purposes other than training
A
veteran of the U.S. Armed Forces
If
none of these applies, the parents’ financial status will be requested for assessment
and their contribution would be expected.
Institutional Financial Aid Form-
Forms which individual schools devise to gather pertinent financial information
not covered by the FAFSA. Sometimes schools require
this along with the CSS Profile, and
sometimes they ask for it instead of the Profile.
Merit Money or Merit
Aid- this is grant or scholarship aid offered by individual
institutions to students at the top of their applicant pool or with particular
talents in order to encourage them to attend their institution. It is not necessarily based on need. Often this
will be offered immediately upon acceptance. A full financial aid package might come later, after need of the applicant
has been analyzed.
Need Blind- If an institution will review an application
without worrying about how much money might be needed for the financial aid package,
it is said to have “need blind” admissions.
Plus Loan- This type of loan is for a parent to finance
the gap in the financial aid package. Beware
of having a parent undertake too much debt unless in an income bracket which will
allow easy repayment after the student is out of college. Occasionally a parent
might take out such a loan with the understanding that the student will help repay
it- this too can prove to be problematic. See #5 above.
Priority Deadline- Most institutions establish a priority deadline for submission of all
financial aid application materials. This deadline is usually parallel to the
application deadline, although not necessarily the same: i.e. the earlier the
application deadline, the earlier the financial aid deadline might be.
If you do not meet that
deadline, the money might all be given out to the students who do. Often, you
can submit a late application, but there is no guarantee that there will be funds
for you even if your need is great. This deadline is often different from the
application deadline, so you must find out what it is. Institutions that have
late or rolling application deadlines may still have an earlier priority deadline for financial aid.
Profile- Also known as the CSS Profile, this is the scholarship form put out by the College Board.
Many institutions, usually the higher priced ones, subscribe to this needs analysis
service because it takes into account far
more factors than the FAFSA. This form
is now available on-line early in the fall through www.collegeboard.com and it can be submitted prior to January 1st.
In fact, it is often used or required for Early Decision applications which are
due to colleges in the fall. It is two-part: you submit the request, with a fee,
and then fill out the form.
SAR- The Student
Aid Report is issued with the results of your submission of the FAFSA. You must review this, make any
corrections, and resubmit, if necessary, being sure to keep a copy before you
send it back. If your EFC really doesn’t make sense to you,
make sure you haven’t made a critical error in how or where you entered figures
on the FAFSA. A copy of the first
page of the SAR which shows your EFC
might be requested for scholarship applications.
Scholarship- This is money you are given, usually based
on an application or some sort of specific talent or qualification, which you
do not have to repay. (Basically it is the same as a grant.) See # 8 and 9 above.
Subsidized Loan-This type of loan does not require that interest
is paid on it while a student is in school.
Unsubsidized Loan- For this type of loan, a student is asked
to pay interest right away while he or she is in school. Principal repayment is
deferred until after graduation (or leaving school…).
Verification- Process through which financial aid offices
ask for copies of parental and student IRS tax filings and W-2 forms in order
to “verify” that what you put on the FAFSA,
Profile or Institutional Forms
is accurate. This is often a random process, and not usually a cause for concern.
Again SAVE ALL COPIES of tax submissions and any worksheets you do to complete
financial aid documents so that you can provide them if requested.
Work Study- This is money that one can earn through designated
jobs at the institution, usually by working 10-15 hours a week. This is paid directly
to the student and can be used for personal expenses, travel, or book money.
Useful Websites Pertinent
to Financial Aid
www.fafsa.ed.gov- To file the free FAFSA
form.
www.collegeboard.com- To find out information
about college track records in issuing financial aid and also to complete the
Profile.
www.fastweb.com- National scholarship search
engine.
www.NH93.com-
www.nhheaf.org –New Hampshire Higher Education
Assistance Foundation
www.vsac.org – Vermont Student Assistance Corporation-
this is the equivalent of NHHEAF, but may contain some additional helpful information.
Anne H. Onion, CBNA- 2008