Financial Aid 101
Thinking about paying for college can be daunting and create anxiety. Let’s break down the ways that colleges determine if a student is eligible for “financial aid” from the college and outline other ways to find money to pay for college.
Financial Aid vs. Merit Aid
Let’s first discuss Merit Aid. Money that a college gives a student based on the student’s grades, SAT/ACT scores, or GPA is called Merit Aid. This is money (a credit to the student’s account applied towards the cost of attendance) that is given to the student when they are admitted and is usually renewable if the student maintains a grade-point average as determined by the college. Merit Aid is granted without consideration for the financial situation of the family.
Real Financial Aid is given to students who demonstrate a financial need to attend that specific college. As you can expect, each college has a total Cost of Attendance (COA) which is unique – the sum of tuition, room, board, books, etc. You can look on a college’s own website to find their COA, and a way to estimate what it would cost your student to attend there. That calculation can be found with the college’s Net Price Calculator (NPC), and usually gives a good ballpark total cost of attendance.
How do colleges determine if a student is eligible for true financial aid? They use the calculations from financial aid forms to see if a student is, in fact, qualified for financial aid. The forms are typically the FAFSA and the CSS Profile (mostly for private colleges, and schools like U Michigan, U Virginia, etc.).You can check each college’s website to determine which colleges use the CSS Profile or go to this link:
https://profile.collegeboard.org/profile/ppi/participatinginstitutions.aspx
If your college needs the CSS Profile, go here to complete it:
https://cssprofile.collegeboard.org/complete-application
Where do you go to fill out the FAFSA? You go here, and be sure to fill out the form for the year your student is beginning college:
https://studentaid.gov/h/apply-for-aid/fafsa
As with any form, read the instructions carefully before completing it. If you need help, your accountant or financial advisor is the person to ask for advice or assistance.
Once the colleges receive the calculations from the FAFSA and the CSS Profile (if needed), they will determine if your student meets their criteria for aid. If so, your student will be offered grants (otherwise known as scholarships, not to be repaid), work-study options (a job which earns money that goes towards college costs), or loans (which ARE repaid). Some loans are subsidized (lower interest), others are unsubsidized (higher interest). It is important to look very carefully at the entire financial aid package your student is offered. Also – not all colleges completely meet the financial needs of the student. Meaning……. there is a gap between the cost of attendance and the total amount of merit and financial aid given. The assumption is that the parents will somehow cover that gap.
Financial aid forms must be completed each year a student is in college, and awards can change year to year, based on the financial situation of the family.
Should I Fill Out Financial Aid Forms?
Before you even think about filling out financial aid forms, you might wonder if it is even worth it. Well, that depends on many factors, including where the student is applying (in general, state universities are significantly less expensive than private colleges). On every college’s Financial Aid page, there will be information explaining if the FAFSA and CSS Profile are needed for Merit Aid to be granted (yes, there are many colleges that require these forms for merit awards). If your student’s colleges are among those that require forms for merit aid, then you certainly have an incentive for completing these.
When should you fill them out? As early as possible!! Colleges have a limited amount of grants and loans, and the earlier your information is processed, the larger your student’s potential award can be. And please remember this pro tip: when listing the colleges that you are sending the FAFSA or CSS Profile to, alphabetize them. Do not put your colleges in any preference order.
Where Else Can I Find Money to Pay for College?
In general, the best scholarships come from the colleges themselves. However, there are other places to look for money (which are often one-time scholarships, not given every year for the four-years of college). Some good suggestions are the following search engines:
https://www.scholarshipcare.com/
https://www.scholarships.com/
https://www.careeronestop.org/
https://www.collegexpress.com/
https://www.appily.com/scholarships
https://studentscholarships.org/
https://www.collegeboard.org/
Also, go to your high school’s guidance department for a list of available scholarships; a parent’s business, a local Rotary Club, religious or ethnic organizations often offer scholarships.
And one final caveat: colleges will either ALLOW you to stack outside scholarships or not, meaning that if you earn an outside scholarship, they will allow you to keep it in addition to your other scholarships (stack it), or they will reduce the amount of the college’s aid by the amount of the outside scholarship (no stacking allowed). As with everything, each college clearly explains their policies on their Financial Aid page.
