College Financial Aid

Having our kids attend college is a dream most of us share. It’s natural. We want to see them excel in all they do. Unfortunately, with the rising cost of tuition, it becomes harder and harder each year to pay for it. There is however, a large amount of financial aid out there. Here are some important things to know regarding financial aid.

First, realize that your income and assets as parents/guardians will affect their financial aid until one of the following criteria are met… They are 24 years or older by December 31 of the current year, if they are married, if they’re enrolled in a graduate or professional degree program, if they have legal dependents other than a spouse, if they are an orphan or ward of the court, or if they ‘re a veteran of the U.S. Armed Forces.

Also, here are some terms you will need to know:

• FAFSA: (Free Application for Federal Student Aid) This determines financial aid eligibility and determines your federal award amounts.
• EFC: (Estimated family contribution) How much the family/student is expected to pay out of pocket. Establishes ‘financial need’. Based on current assets, income, 529 plans etc…
• Parent Plus Loans: These are loans on the parents to pay the student’s cost.
• Unsubsidized & Subsidized Student Loans: These are loans on the student that do not have to be paid until after graduation. Subsidized will not accrue interest until after graduation, unsubsidized will.
• Grants: Funds given out by the government. (PELL-Need based grant)
• Scholarships: Funds given out by various organizations. (Schools, companies, Fraternities, teams etc…)

Where do I start?

Complete the FAFSA. There is a limited amount of funds, so the sooner the better. This will establish the student’s EFC and financial need. The FAFSA will give an award letter saying what federal funds they qualify for. For example, they may receive the PELL Grant. This information is passed on to the school(s).

It is up to the school to either meet the need or not. Each school is different, and accordingly will fund all, some, or none of it. Whatever they don’t cover is considered ‘unmet need’. From there you will have to find the funds on your own. This can be done through other loans, independent scholarships, work study etc… If you have unmet needs, be sure to call the financial aid office and see if they can help. They often have additional scholarships they can give upon request. Additionally, you can find many scholarships outside of the schools and FAFSA; your student can apply for these starting in their junior year of high school.

All in all, there are number of factors that go into the out of pocket cost for higher education. For help planning how to lower your Estimated Family Contribution, to maximize the financial aid your student will receive, while still saving for you and your child’s future, call my office today!