Students receive financial aid from a variety of sources. You may be eligible for assistance from the federal or state government, civic or church groups, your parents’ employer or union, or colleges themselves.

The beginning of your senior year in high school is the best time to start inquiring about financial aid. Your best sources of information are the financial aid offices at the colleges you wish to attend.

As you research colleges, make sure to visit each college’s financial aid webpage. Make a note of all deadlines, and what financial aid forms are required.
Basic Types of Student Aid

Grants and scholarships are outright gifts of money that don’t have to be repaid.
Loans are borrowed funds that usually must be repaid with interest.
Part-time jobs are opportunities provided by colleges to work and earn money.
Student aid often is a combination of all three, known as a financial aid “package.” The amount of your package depends on your financial need. Most federal and state aid is awarded based on financial need rather than academic merit; your financial need is determined by the information contained on your Free Application For Federal Student Aid (FAFSA).

You can find out early if you qualify for federal aid by accessing www.StudentAid.ed.gov/fafsa/estimate, but you will still need to complete the actual FAFSA by accessing www.fafsa.ed.gov.

The federal government also assists college students through the Lifetime Learning Credit and American Opportunity Tax Credit — tax credit programs for which you and your family may be eligible when completing your federal tax return. For more information, go to: www.irs.gov/Individuals/Students.

Facts about the FAFSA

All colleges will ask you to file a FAFSA, and most students do so online at www.fafsa.ed.gov.

You must complete a FAFSA to apply for state and federal financial aid. The information contained in this application is used to determine your eligibility.

You can file your FAFSA as early as October 1 of each year. In order to complete your 2017-18 FAFSA you will use your, or your family’s 2015 Federal income tax information.

The needs analysis service will review your FAFSA. Based on this analysis, you will be assigned an “Expected Family Contribution” (EFC) which is the amount you and your family will be expected to pay toward college costs. The EFC is used to determine your need for financial aid.

Defining your Financial Need

The needs analysis considers your parents’ income, your earnings and your family’s net assets (cash, bank accounts, trusts, investments) to determine your EFC. Home equity is no longer considered in the needs analysis calculation for federal and state aid. Home equity may, however, be considered by the college in determining your eligibility for institutional aid.

The needs analysis also takes into account some family expenses. These include income taxes paid, number of family members, number of household members in college or vocational school, and your parents’ need to save for retirement.

The colleges to which you apply will review the results of the needs analysis to make a final determination on how much you and your family are expected to contribute toward your educational costs. Your financial need is determined by subtracting your expected EFC from the annual cost of your education.

To meet your determined financial need, the college may combine various types of aid into a financial aid package. This package may include grants, scholarships, a part-time job and loans. If your award includes a Federal Direct Loan, you will need to complete a separate Master Promissory Note.

Some colleges require you to complete forms in addition to the FAFSA, some of which carry a fee. Usually these colleges provide large amounts of institutional aid. They need added information for a more accurate picture of your family’s financial circumstances.

Within two weeks after completing your FAFSA online, you will receive a Student Aid Report (SAR). This report gives information on your eligibility for a Pell Grant. Read it carefully. The college will use the information on the SAR in deciding whether to include a Pell Grant in your financial aid award, if you are eligible.
FACTS about Loans

If you intend to borrow from a federal student loan program to finance your education, consult with your college aid officer to determine the application procedure at that particular college.

The most attractive educational loans are those targeted to financially needy students. These loans — federal Direct Loans and Perkins Loans — require no interest or repayment while the borrower is in school.

Students who do not qualify for need-based aid also have a borrowing opportunity available in the federal Direct Unsubsidized Loan Program.

Parents may borrow through the federal PLUS Loan Program and a variety of supplemental educational loan programs which your college aid officer can tell you about.

As with any loan, make sure you fully understand the interest rates, repayment terms and tax implications. Find out whether interest charges are variable or fixed, whether the loan has forgiveness or deferment provisions, whether you can consolidate the loan with other loans, and whether it carries prepayment penalties. Borrow only what you need. Remember that loans must be repaid even if you do not finish college.

Facts to Remember

Fact 1: The amount of financial aid for which you will qualify is determined by your financial need. Though your expected family contribution (EFC) will usually remain the same from college to college, your financial need will increase or decrease depending upon the costs of the college.

Fact 2: Your need for financial aid will be more at a higher cost college than at a lower cost school. However, this does not necessarily mean that either the higher cost college or the lower cost college will be able to provide you with financial aid that is sufficient to meet your financial need.

Fact 3: Colleges handle “outside scholarships” differently. In some cases, an outside scholarship will not impact your college aid package; some colleges will reduce your loan portion of the package by the amount of the outside scholarship and others will withdraw institutional grant aid by the amount of the scholarship.

Fact 4: You must apply for aid each year. Always check with your college to find out if they have an application deadline.

Fact 5: Contact all colleges to which you are applying to learn about financial aid deadlines.

Fact 6: College is a substantial investment, but it’s the most important one you can make in your future. Take time to learn all of your financial aid options before you make any college decision. College financial aid officers can help you find ways to pay for your education.

Important Steps

File your FAFSA early.
Missing your college’s FAFSA priority deadline could prevent you from receiving some types of federal, state, or institutional financial aid. Pay attention and follow deadlines.

Do your homework.
Find out about your college’s financial aid application process – make sure you get any and all forms and remember deadlines.

Open your mail.
Open everything that comes in the mail or by email from the colleges to which you are applying, especially information from financial aid offices. Don’t miss out on an important part of your aid package because you did not complete a form.

You are your best advocate!
Do your research, follow deadlines, and be in touch with your school’s financial aid office. Remember the phrase “The squeaky wheel gets the grease?” Stay on top of your financial aid needs.

Your best resource is the financial aid office at the college or university you wish to attend. Contact financial aid offices at the same time you submit your admission application.

Often a checklist can help with academic and financial planning. Checklists for elementary, middle and high school students and their parents, prepared by the U.S. Department of Education, are available at www.StudentAid.ed.gov.

National Information Sources

Federal Student Aid on the Web – www.StudentAid.ed.gov
… information from the U.S. Department of Education on planning, preparing and paying for postsecondary education.

Financial Aid Information Page – www.FinAid.org
… click on $Scholarships to access a wide selection of search databases. Click on Calculators for tools to determine college costs, savings goals, and how much financial aid you may need.

FastWeb – www.fastweb.com
… a highly popular, customized financial aid search site.

EFC Calculator – www.finaid.org/calculators/finaidestimate.phtml
… use this tool to estimate your Expected Family Contribution.

College Board – www.collegeboard.org
… information on the SAT and other testing, college planning.

College Navigator – www.nces.ed.gov/collegenavigator
… information on the SAT and other testing, college planning.

Federal Trade Commission – www.consumer.ftc.gov/articles/0082-scholarship-and-financial-aid-scams
… information on scholarship scams and how to avoid them.