Financial Aid

Students who plan to obtain a postsecondary degree have to worry about more than a bulky schedule and homesickness when heading off to school. Because a quality college education is becoming an increasingly important criterion in the search for a satisfying job, families too often spend most of their time on the college application process, and leave financial aid issues to fall by the wayside. This is unfortunate as many bright students graduate college with high hopes and great potential, only to find that college debt has made an independent and secure lifestyle nearly impossible.

The National Center for Education Statistics (NCES) estimated the average annual price of a four-year college education was more than $18,000 during the 2006-2007 school year. And considering that more than 40 percent of students required five years to complete what is generally considered a four-year degree , these costs can quickly multiply. Few families can continue to afford college tuition without some form of financial aid.

Fortunately, financial aid is available, and many families do in fact receive some form of assistance. Before looking to private student loans as a college-funding solution, students can seek out financial aid from the federal government, from colleges and universities and from public and private scholarship providers. Below are some options students should consider before tuition deadlines roll around.

Federal Financial Aid

Whether they know the details or not, most students will hear the acronym FAFSA from their high school classmates or counselors. For students who demonstrate financial need, filing the Free Application for Federal Student Aid (FAFSA) is one of the easiest, most surefire, ways of receiving financial aid for college.

Though the form may be difficult to fill out, assistance from the Department of Education and from colleges and universities is available free of charge. The hassle is worth it. After providing the government with information about one’s financial status, students will receive a report detailing their eligibility for a number of federal financial aid programs, including the Pell Grant, the Academic Competitiveness Grant (ACG), the Federal Supplemental Educational Opportunity Grant (FSEOG), the National SMART Grant, Federal Work Study and Stafford, Perkins and PLUS Loans.

The most widespread of these grants (forms of financial aid that do not need to be repaid), the PELL Grant, will be awarded to students based on financial need and full or part-time status—without regard to one’s academic standing. The other grants are less common supplements to the Pell, and they are awarded to students based on both financial standing and, in the case of the ACG and the SMART Grants, academic majors and/or academic performance.

Unlike the aforementioned grants, the Federal Stafford and Perkins Loans are, as you may have guessed, funds that have to be repaid. Though they are grouped with other forms of federal financial aid, loans are forms of assistance in name more than in practice. Students who cannot secure sufficient funding through grants, scholarships and work savings, may look to federal loans as an alternative to the more expensive, higher-interest private student loans.

Institutional (College) Financial Aid

In addition to filling out a FAFSA, students should investigate the opportunities afforded to them by their college or university. Students who receive their acceptance letters without indication of a college scholarship need not feel that this is the end all on the subject of institutional assistance.

Another college financial aid option, the Federal Work Study (FWS) program, may be available to students who demonstrate financial need and who have submitted their FAFSA. Though eligibility for this financial aid program will be indicated on the award letter a student receives after filing the FAFSA (filing the form is all that a student must do to apply), the program is run by individual colleges using federal funding assistance. Unfortunately, this form of financial aid requires some work—literally. Students who are deemed eligible for Federal Work Study will be provided with a university job, one that tends to be flexible and stable, but also low in pay. The money will not have to be repaid, and the rewards will be given directly to students, but, inevitably, work will be involved.

Those who do not automatically qualify for a college scholarship may also contact their college financial aid office to find out about additional institutional scholarship or fellowship opportunities. Because scholarships offered by individual schools are frequently restricted to students who attend that school, applicants will have less competition to worry about. Institutional scholarships and fellowships usually require some work in the form of essays or research, and not all will be eligible, but, if available, they are worth considering.

Scholarship Financial Aid

Due to the sheer number of scholarship opportunities available to college students—we’re talking millions—just about all individuals searching for this form of financial aid will be eligible for at least a few. Scholarship searches such as that provided by Scholarships.com can be an easy and cost-free method for finding awards students are eligible to receive based on their individual characteristics (GPA, school, location, interests, etc.).

Large corporations are frequently generous in the number and size of scholarships awarded, and many of them have few eligibility criteria. Companies such as Coca-Cola, Best Buy, McDonalds and Google annually award numerous scholarships to students across the nation.

Many private donors and foundations also set up scholarship endowments (funds that are annually used to award money) in memory of or to bring attention to certain people or causes. For example, a couple who enjoys golfing may create a scholarship fund in their name that, each year, will be used to award a promising golfer college money. A foundation that conducts cancer research may likewise award financial aid to medical school students who have the potential to become future researchers themselves.

Tips for a Winning Scholarship Application

1. Apply only if you are eligible.
2. Complete the application.
3. Read and follow all instructions.
4. Submit a clean and neat application.
5. Submit a well-composed essay that makes a definite impression.
6. Be aware of and meet all deadlines.
7. Mail application to the proper address with the proper postage affixed.
8. Give your application materials a final review.
9. Seek assistance if you feel you need it.
10. Make sure you're proud of and satisfied with your application submission.

Reasons an Application Will Not Win a Scholarship

1. Applicant mailed the envelope without the application enclosed.
2. Applicant submitted an incomplete application.
3. Applicant forgot to include their name and/or address.
4. Applicant submitted an illegible or unintelligible application.
5. Applicant sent the application with insufficient postage- returned "postage due."
6. Applicant submitted irrelevant or inappropriate supporting documentation.
7. Applicant submitted a dirty or stained application.
8. Applicant applied for an award when falling short of the minimum requirements.
9. Applicant made a number of spelling errors.
10. Applicant was rude or abusive to the judges.

Tips to Protect Yourself Against Scholarship Scams

1. Don't believe a promise of guaranteed funds you'll never have to repay. No one can guarantee that you will win a scholarship or grant. Remember: if it sounds too good to be true, it probably is.
2. Beware scholarship services that charge fees or claim that you can't get this information anywhere else. There are many free lists of scholarships available. Check with your school guidance counselor, library and Scholarships.com before you decide to pay someone to do the work for you.
3. Ignore the myth of unclaimed funds and the companies that advertise huge amounts of unclaimed money.
4. Don't be fooled by official-sounding names and logos. Make sure the foundation, organization or program is legitimate.
5. Don't pay an advance fee. Don't pay anyone who claims to be "holding" a scholarship for you or informs you the scholarship will cost some money. Free money shouldn't cost a thing.
6. Disregard any news that you're a finalist in any contest that requires you to pay a fee for further consideration. Before you send money to apply for the scholarship, check it out.
7. Check the terms closely if there's a guaranteed refund or a money back guarantee. Refund guarantees often have conditions or strings attached. Get refund policies in writing -- before you pay.
8. Resist high-pressure tactics like "We'll do all the work for you." Don't be fooled. There's no way around it, you must apply for scholarships or grants yourself.
9. Do not give out your credit card, bank or checking account numbers to any solicitors who claim they need it for you to be eligible for either a contest or access to "exclusive" scholarship information. Get information in writing first. It may be a set-up for an unauthorized withdrawal.
10. A lower fee is no guarantee that a scholarship service or program is legitimate.

Tips for Completing the FAFSA (Free Application for Federal Student Aid)

1. Have available the following documents and information when completing the FAFSA:
   • Most recent year's tax forms, or end of year pay stubs.
   • W-2 forms
   • Records of the most recent year's untaxed income, such as child support and untaxed income from agencies such as Social Services, Social Security, and the Veteran Administration. (You do not need to send copies of these documents with your FAFSA, however you will need to refer to them when you file.)
   • The student's correct social security number.
2. Do not leave blanks for any questions requiring a numeric figure, such as a dollar amount or a test score. If your answer to a question is zero, be sure to write "0".
3. Read instructions and follow them carefully. Even if you have completed this form previously, it is not safe to assume revisions have not been made to previous versions.
4. If you are a parent completing the form for your children, be sure to complete a separate FAFSA application for each student. Check that the social security number reported is the correct one for the student filing the form, incorrect social security numbers delay processing.
5. If you are a dependent student, it is important that you enlist the assistance of your parents and that you actively participate in completing the FAFSA. If the financial aid office has questions they will contact the student first, and it is imperative that both you and your parent(s) are aware of the information provided.
6. Obtain the Federal school code from the school or schools you may be interested in attending.
7. Check figures and calculations. Mistakes delay the processing of up to 40% of all forms processed.
8. The asset questions pertaining to net value are for secondary and investment real estate only. You are not required to report the net value of your primary residence.
9. Sign the FAFSA, both the student and parent (if applicable) must sign and date.
10. You should file early, but do not sign, date or mail the FAFSA before January 1. By filing early, you may receive favorable consideration for receiving campus-based aid. You must file a FAFSA every year. Any changes in your family situation should be conveyed to your financial aid administrator, they might affect your eligibility.

Mistakes When Completing the FAFSA

1. Incorrect Social Security Number- Verify with your Social Security card.
2. Unsigned form- Be sure to sign and date the form (student and a parent for dependent students). If you file the FAFSA on-line, be sure to print, sign, and mail the signature page.
3. Incomplete form- Complete the entire form. List the net worth of your assets as of the day you complete the FAFSA. If your answer to some questions is zero, be sure to write "0" instead of leaving the answer blank. Be sure to answer the question related to drug convictions.
4. Income earned from work left blank- Report the wages, salaries, and tips earned from work for the student and each parent if the student is dependent. Report the wages, salaries, and tips earned from work for the student and spouse if the student is independent. This income will not be counted twice, but will determine your allowance for Social Security tax payments and a special allowance for families in which both parents are employed or the student and spouse are employed.
5. Income tax paid is incorrect amount- Report the actual tax paid (usually determined by the tax tables when completing the income tax form), not the amount withheld by your employer as shown on your W-2 form.
6. Number in household/number in school is incorrect- If you are a dependent student, report only the people who live with your parents and will continue to receive more than half of their support from your parents between July 1, 2009 and June 30, 2010. If you are an independent student, report only the people living in your household who will continue to receive more than half of their support from you between July 1, 2009 and June 30, 2010. In order to be included in the number in school, your sibling(s), spouse and/or children must be attending at least 6 hours in one term between July 1, 2009 and June 30, 2010 working towards a degree from a college which participates in the federal financial aid programs. Parents are excluded from the number in college for both federal and institutional aid.
7. Be sure to indicate which schools should receive your FAFSA information.
8. Graduate student status- most students are not working towards their second degree and so will answer "No".
9. Divorced/remarried parental status listed incorrectly- List the current marital status of your custodial parent (the one with whom you reside and whose information is listed on the FAFSA).
10. Incorrect address- Write in your permanent mailing address; do not use your campus or summer address.

Financial Aid Tips

1. Prioritize your efforts, beginning with the federal government. Explore the private sector for additional financial aid programs. Visit websites like Scholarships.com to locate the private sector financial aid for which you can apply.
2. Contact each school to explore the financial aid possibilities. Write to the school's financial aid office as soon as you apply for admission. Applying for financial aid should not affect your chances of being accepted.
3. Be prepared. Students and parents should file their income tax returns early. You'll need information from income tax forms to complete your financial aid applications.
4. Get to know your financial aid administrator (FAA). Ask the 10 questions outlined in "Top Ten Questions..." The help of the FAA will be valuable if questions arise later on in the year.
5. Submit a FAFSA even if you think you will not qualify for federal aid. Being rejected for federal aid is sometimes a prerequisite for private awards. Some schools require you to fill out their own application as well as a profile.
6. Apply for aid as early as possible. Deadlines vary, but your application for Federal Student Aid can be sent any time after Jan 1. An early application will help get the best financial aid package possible.
7. Take advantage of tuition prepayment discounts. Many colleges offer up to a 10% discount for early payment.
8. Money from grandparents may avoid gift tax liability if paid in your name directly to the school.
9. Investigate company-sponsored tuition plans. Many employers will invest in the education of their employees or children of employees.
10. Apply for financial aid each year you are in school. Even if you receive aid during one year, you must reapply to get it for the next year. Use the Renewal FAFSA form to reapply for aid and save time. See your FAA for assistance.

Questions for Your Financial Aid Administrator (FAA)

1. Will my request for financial aid have any impact on my ability to be admitted to this college?
2. Will the college meet my full financial?
3. Will the college continue to meet my full financial aid need for all four years of my enrollment?
4. Describe your financial aid program, including requirements for need-based aid, merit-based aid and scholarships.
5. What application materials are needed to apply for financial aid, and does the college require its own form in addition to the FAFSA?
6. Where can I find additional sources of financial aid?
7. What are the deadlines for submitting financial aid forms? Are there state financial aid programs that I should know about?
8. When will I be notified of my financial eligibility?
9. Once my financial aid package is awarded, will additional scholarships reduce the amount of financial aid I can receive?
10. Does this college participate in a tuition payment plan that allows installment payments for each semester's bill?

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