College Financial Aid
For many families, a significant factor in the college process is the cost of higher education and the availability of financial aid. This section identifies some of the key pieces of applying to college, explains how colleges factor financial aid into admissions and award packages, and describes how the typical financial aid package might be developed. These policies will vary from school to school, students should research each college and contact the financial aid office with questions.
APPLYING FOR FINANCIAL AID
Each school has specific requirements for financial aid. The two most commonly used forms are FAFSA and CSS Profile. Virtually all colleges require FAFSA. Many schools include their own financial aid form as part of the application packet.
FAFSA (Free Application for Federal Student Aid)
These forms become available October 1 of the student’s senior year. All students applying for any federal financial aid must file this form as soon as possible after October 1. There is no cost to file this form. Analysis of the data on this form will determine eligibility for Pell Grants, Supplemental Educational Opportunity Grants (SEOG), Stafford Loans (both subsidized and unsubsidized), Perkins Loans, work study and other federal and state programs. Many states will also require the FAFSA to award state grants to students. Since federal aid is a key part to most awards, it is critical that this is filed in a timely manner.
CSS (College Scholarship Service) Profile
Many schools require CSS Profile in addition to FAFSA. Information obtained by CSS Profile will be used to determine a student’s eligibility for a college/university’s own funds. Students can complete an online CSS Profile registration form in the fall of their senior year. Students will answer a selection of questions and indicate colleges to which they will apply. They will pay an initial registration fee and additional costs per college. Within several weeks, students can expect to receive a CSS Profile packet, containing college-specific forms.
As supplements to the FAFSA and CSS Profile, some families will be asked to submit the following:
Divorcing-Separated Parent’s Statement: A supplement to the CSS Profile for the non-custodial parent requested by many colleges. Copies of the completed form should be sent directly to the financial aid office.
Business/Farm Supplement: A supplement to CSS Profile required by some colleges if a parent is self-employed or a farmer. This should be sent directly to the college.
Financial aid forms specific to an individual college.
In some cases, a college will provide a short financial aid form as part of their own application. This must be completed and returned to the individual college.
NEED-BLIND: This is a process where the admission decision is separate (blind) from the financial aid process. The admission application is evaluated, a decision made, and those accepted are then sent to the financial aid office for review.
NEED-AWARE: A growing number of schools with limited resources have become much more honest in admitting that they must look at their budget carefully in accepting a freshman class. In most cases, this will affect the last 10% of the class accepted.
THE ACTUAL AID PACKAGE
Financial aid award packages typically cover financial need, merit, loans and work-study options. Schools estimate the bottom line when all costs are calculated. Students should take the time to compute what the basic costs of the school, total the various components of the aid package, and decide if the package will work for their family. The most important item to remember is not what a school costs, but rather what a school will cost for the individual student. Once various packages have been reviewed, a determination can be made.
Each college uses requested financial information to analyze need. Virtually all colleges use the CSS Profile. Many also use information from their own financial aid application forms and copies of most recent Federal Income Tax Returns. The reports offer colleges a preliminary calculation of the amount of money which a family can contribute to cover the cost of college education.
The PARENTAL CONTRIBUTION is determined after all income and assets are calculated to determine a family’s net worth. Home equity is not considered when applying for federal aid; however, it is considered by colleges requiring the CSS Profile when they consider distributing the college’s own funds. Allowances are then made for the number of family members, the number of children in college, debts, necessary expenses and/or taxes. Consideration is also given to special financial circumstances (illness, older parents, approaching retirement or special education needs). Colleges should be made aware of any such circumstances which may exist within a family. The final result of this analysis is the expected family contribution (EFC).
Please be aware that each college will assess scenarios in which parents are separated, divorced and/or remarried differently. For example, some colleges take into consideration the income and assets of the stepparent with whom the student lives. Others do not. Federal fund eligibility (determined by the FAFSA) is based on “household” income only – which can include a stepparent and exclude a biological parent.
The STUDENT CONTRIBUTION is determined after student earning and assets are reviewed. Typically, the student is asked to contribute a portion of personal savings and other benefits, such as Veteran’s Benefits or Social Security Benefits (normally 35% the first year). Students are also expected to contribute a certain amount based on possible merit-based awards from organizations outside of the college; these are considered available resources and are applied against the self-help portion of the aid package.
In packaging financial aid, most colleges first award a SELF-HELP package based on the FAFSA and federal funds. This will include an opportunity to work on campus through a work-study program and federal (Perkins or Stafford) or other school loans. In most cases the first $4,000 to $6,000 of an aid package is made up of these awards. Schools will fill the remaining amount of need if they meet 100% of student need with GRANTS, made up of a combination of federal grants such as Pell or SEOG, or grants from the actual funds of the colleges. A MERIT AWARD may also be part of an academic, athletic or leadership award or scholarships and is often a grant which goes beyond the actual need of a student. It can even awarded to a student not applying for aid in the hope of attracting a top student to the school. Student and parents are encouraged to research the many federal, state and college sources for scholarships, grants, gifts and awards for academic achievement, merit or special needs.
Male students are required to register with the Selective Service System to receive federal aid funds. This can be done online at www.sss.gov.
International students applying for aid at American colleges are not eligible for awards given through the FAFSA program, unless they are resident aliens or US citizens. A limited group of colleges offer aid through scholarships and grants to international students.