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STUDENT FINANCIAL AID TUTORIAL
Joseph Ryan
It now costs around $32,000 a year on average to attend a
private university, and around $13,000-$15,000 to attend a
public university. Where's a middle-class family supposed to get
all that money? That's what this report is about.
It's surprising, but there are many sources of student financial
aid out there. But you have to be savvy about how to go about
applying for it.
FIRST STEPS
In some households, it's the parents who take on most of the
chores involved in applying for student financial aid; in
others, the high school student does all the work himself or
herself. In what follows, I'll address the high school student
directly to make things easier, recognizing that most readers of
this article will be parents, not students (however, please
email this article on to your teen-ager!)
TO THE STUDENT
As a high school student bound for college, one of the first
things you should do -- preferably in your junior year -- is to
talk to your high school guidance counselor about available
financial aid. He or she can steer you to many scholarships,
loans, and work study programs you'd never find on your own.
Remember: there are thousands of student aid sources available,
not just the few you may be aware of. It's your guidance
counselor's job to know about virtually all of them.
One thing your counselor will tell you to do right away is to
complete the FAFSA form. FAFSA stands for Free Application for
Federal Student Aid. This basic form will be utilized to
determine your financial aid requirements by almost all schools
and institutions which provide financial aid. So you need to
complete it carefully and accurately. You can access the form
online at fafsa.ed.gov. Or you can get it by calling
1-800-FED-AID.
FAFSA is administered by the United States Department of
Education. You should file it early during the second semester
of your senior year, as soon as your family has prepared their
tax return (you'll need info from that return to use in the
form). It takes 1-2 months to get your evaluation back, which
will be called a Student Aid Report. Based on the financial info
you provide about yourself and your family, the US Department of
Education will estimate how much money you can contribute from
your own resources toward your college expenses.
So for example, if that figure is $8,000 and your expected total
expenses at a college you plan to attend will be $12,000 for the
freshman year, your "Financial Need" is $4,000. Many colleges
will, as part of their acceptance procedure, offer financial aid
packages that cover most or all of the Financial Need amount.
Also, some schools require the so-called PROFILE forms. These
are administered by the College Board and are used primarily by
private colleges to estimate your eligibility for
nongovernmental loans (such as loans provided by the college
itself). The PROFILE is somewhat similar to FAFSA but more
detailed. You can obtain and file the PROFILE at:
Collegeboard.com.
Be sure to check with your guidance counselor and/or the
colleges where you're applying to find out if there are any
additional forms you need to fill out.
A FEW INSIDER TIPS
Note that scholarships, not loans, should be your primary goal.
There are many specialized scholarships out there. Maybe you're
an inventor, or maybe you have a family member in the Armed
Services, or maybe you speak an in-demand language for which the
government or some other institution needs translators, like
Hungarian or Korean. You'll be amazed at how many specialized
scholarships you find yourself qualified for. Check with your
guidance counselor and also visit Collegeboard.com to research
this subject.
Beware of fee-based scholarship search services on the Web. Some
of them are outright scams. At a minimum, check with the Better
Business Bureau and your guidance counselor before paying anyone
a fee to search for scholarships for you.
Many scholarships require you to write a "scholarship essay." If
so, say the experts, focus on answering the questions posed by
the essay. The most common reason for rejection is that the
student meanders and drifts off-topic in the essay. Also: don't
forget to proof-read before submitting!
As for student loans, there are two basic types: those provided
by the government and those which are merely guaranteed by the
government. The former usually carry a lower interest rate.
The most commonly-sought student loans today are these two: the
Stafford Loan and the Perkins Loan. You can only borrow about
$3000 for your freshman year under the Stafford Loan (and higher
amounts for later years), and you must demonstrate at least
moderate financial need to qualify. The Perkins Loan provides up
to $4000 for the freshman year but requires a demonstration of
exceptional financial need. The Perkins is considered an
exceptionally good loan for students because interest does not
accrue while you're attending college.
If you can't put together enough financial aid by means of
scholarships and loans, your parents may be able to take out a
PLUS loan (Parents Loan for Undergraduate Students) or borrow
from a private lender, such as a bank or other financial
institution.
Don't be afraid to apply for admission to the school you really
want based on cost. Availability of student aid varies
considerably among colleges, and the one you wish to attend may
have a sizable scholarship endowment, in which case it might
turn out to be much less expensive than you think.
When estimating financial requirements, don't focus entirely on
tuition and room and board. You'll also need money for books,
transportation, and personal expenses (entertainment, clothes,
etc.) If a college accepts you and then offers you a financial
aid package which you feel is inadequate -- and if this is a
school you've set your heart on attending -- write a letter and
ask for more financial aid, say most experts. Address the letter
to the Director of the Financial Aid Office (get his/her name
from the school switchboard).
In your letter, try to provide a good, specific reason why you
need more aid, such as "Our family has had a medical emergency,"
or "My father has lost his job recently." If you don't have a
good reason you might try, "We have a large family and all my
four sisters will be attending college soon." That one probably
won't work. However, if you have received a larger financial aid
offer from another college, you should definitely mention that
fact, say the experts. It's even a good idea to include the
letter offering you the financial aid. This may sound like
hardball but often gets results, provided you're a student the
college would really like to have.
Check out the college-ranking edition of U.S. News & World
Report. It includes average amount of student financial aid
received by each college's students. This should give you a
fairly good idea if a given college is likely to provide the
amount of aid you need. Be very careful you don't get hooked in
by a college that offers a great financial aid package for the
freshman year, then cuts it back in later years. Some colleges
do this in order to get top students or athletes to attend. One
way to check this out is to talk to present students at the
college who are receiving aid. Also check with your guidance
counselor, who may be aware of colleges in your area that have a
reputation for this type of tactic.
To Do List: Junior Year and Summer Before Senior Year --
Research Colleges and all other sources of student financial
aid; Senior Year, Fall -- Talk to guidance counselor; apply to
selected colleges; apply for scholarships; Senior Year, January
-- File the FAFSA; File the PROFILE; apply for more scholarships
and grants; Senior Year, Early Spring -- Review accept/decline
letters and financial aid offers from colleges, make your final
decision.
About the author:
Joseph Ryan is Director of Washington Research Associates, Inc.,
Washington DC. The firm's website,
provides helpful 10-minute tutorials on topics of current
interest, such as identity theft, asset-searching, people
searching, identity theft, and many others.
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