SECTION VI

FINANCIAL AID INFORMATION

A. Financial Aid Overview

B. Financial Aid Application Process – Step By Step

C. Financial Aid Process – Step by Step

D. Myths about Paying for College

E. Financial Aid Websites

FINANCIAL AID OVERVIEW

FINANCIAL AID DEFINED Financial aid opportunities range from large federally funded programs to small locally sponsored programs. The primary goal of financial aid is to assist students in paying for college. This goal is achieved by evaluating the family's ability to pay for educational costs, distributing limited resources in an equitable manner, and providing a balance of gift aid and self-help aid. Financial aid is money in the form of scholarships, grants, loans, and employment opportunities. Most financial aid is based on demonstrated financial need and is intended as a supplement to your educational costs. It is not intended to replace the financial resources of the family.

TYPES OF FINANCIAL AID

•GRANTS - student aid funds for college that do not have to be paid back.

•WORK STUDY – a part-time work program to earn money while you are in school.

•FEDERAL LOANS – student aid funds that must be repaid with interest. Types of federal loans include: Perkins, Direct Stafford, Direct PLUS,etc.

FINANCIAL AID – NEED VS. MERIT

•NEED BASED AID – This is aid (money) for a student who needs financial support in order to pay for college. The need of a student/family is solely determined by the family’s financial information.

•MERIT BASED AID – This is aid (money) for a student who receives financial support based on their academic performance. This can be based on a student’s GPA and/or it can be based on standardized tests scores such as the ACT/SAT.

EFC DEFINED The EFC, or the Expected Family Contribution, is the amount of money a family is deemed able to pay. This is a constant figure. This is important because it means that the student’s need changes as the cost of attendance changes. Since colleges and universities do everything they can to meet the “need” of the students applying to their institution, financial aid packages vary from school to school. Therefore, if College A is more expensive than College B you may receive more financial aid from College A than College B. Don’t assume a school is too expensive. Schools strive to meet the student’s financial need!!

THE FINANCIAL AID APPLICATION PROCESS STEP BY STEP – EXAMPLE #1

STEP 1 Get free information and help from a school counselor, the financial aid office at the college or trade school you plan to attend, or the U.S. Department of Education at www.studentaid.ed.gov.

STEP 2 Get a Federal Student Aid PIN, a personal identification number. This acts as your electronic signature. A PIN lets you apply, “sign” your online Free Application For Federal Student Aid (FAFSA), make corrections to your application information, and more – so keep it in a safe place. Go to www.pin.ed.gov to register for one.

STEP 3 Collect the documents needed to apply, including income tax returns and W-2 forms (and other records of income). A full list of what you need is at www.fafsa.ed.gov. If your tax return has not been completed at the time you apply, estimate the tax information, apply, and correct the information later.

STEP 4 Complete the FAFSA between January 1st and June 30th (no exceptions). Apply as soon as possible after January 1st to meet school and state aid deadlines. Apply online at www.fafsa.ed.gov This is the most efficient method of completing the FAFSA. If you did not get a PIN, you can get it when you complete the FAFSA online.

STEP 5 Within a few days, the U.S. Department of Education will send you your Student Aid Report (SAR) – the result of your FAFSA. Review your SAR and, if necessary, make any changes or corrections, and submit your SAR for reprocessing. Your complete, correct SAR will contain your Expected Family Contribution (EFC) – the number used to determine your federal student aid eligibility.

STEP 6 The college or trade school that you plan to attend might request additional information from you. Be sure to respond by any set deadlines, or you might not receive your federal student aid.

STEP 7 All applicants: The college or trade school will tell you how much aid you can get at that school. Contact the school’s financial aid office if you have any questions about the aid being offered.

First-time applicants: Review award letters from schools to compare amounts and types of aid being offered. Decide which school to attend based on a combination of (a) how well the school suits your needs and (b) its affordability after all aid is taken into account.

FINANCIAL AID PROCESS STEP BY STEP – EXAMPLE #2

1. Student applies for federal, state, and college student aid using the FAFSA.

2. FAFSA is processed by Federal Student Aid

3a. Student receives a Student Aid Report (SAR)

3b. The colleges listed on the FAFSA receive an Institutional Student Information Record (ISIR), which is a copy of the processed FAFSA data.

4a. The SAR indicates the FAFSA was processed successfully. Student only needs to review and make

changes if necessary. Student may be selected for verification. 4b. The SAR indicates that corrections are required. Student may be selected for verification.

4c. The college asks the student to make corrections or provide documentation for verification.

5. FAFSA corrections are made or verification is completed by the financial aid office.

6. Financial aid office reviews student’s record to develop the student’s financial aid award

package.

7. Student reviews award letter that includes the financial aid award package. Student compares to other award letters and makes decision about which college to attend.

TWELVE MYTHS ABOUT PAYING FOR COLLEGE

Billions and billions in financial aid are available for those who need help paying for college. Yet a lot of misinformation clouds the facts about what type of aid is available and who is eligible. Here are some myths dispelled for those confronting the process of securing financial aid.

1) COLLEGE IS JUST TOO EXPENSIVE FOR OUR FAMILY

Despite the media hype, a college education is more affordable than most people think, especially when you consider that college graduates earn an average of $1 million more over the span of their careers than high school graduates. There are some expensive schools, but high tuition is not a requirement for a good education.

2) THERE’S NOT A LOT OF FINANCIAL AID AVAILABLE

In fact, more than $106 billion in student financial aid is available for undergraduates. Most students receive some form of aid. Less of this aid now comes in the form of grants, however; most aid is awarded through low-interest loans or institutional and other grants. You should carefully consider the financial packages you’ve been offered by each college to determine which makes the most financial sense.

3) MY FAMILY’S INCOME IS TOO HIGH TO QUALIFY FOR AID

Aid is intended to make a college education available for students and their families in many financial situations. College financial aid administrators often take into account not only income but also other family members in college, home mortgage costs and other factors. Aid is awarded to many families with income they thought would disqualify them.

4) MY PARENTS SAVED FOR COLLEGE SO WE WON’T QUALIFY FOR AID

Saving for college is always a good idea. Since most financial aid comes in the form of loans, the aid you are likely to receive will need to be repaid. Tucking away money could mean that you have fewer loans to repay, and it won’t make you ineligible for aid if you need it. A family’s share of college costs is based mostly on income, not entirely on assets such as savings.

5) I’M NOT A STRAIGHT-A STUDENT, SO I WON’T GET AID

It’s true that many scholarships reward merit, but most federal aid is based on financial need and does not even consider grades.

6) IF I APPLY FOR A LOAN DO I HAVE TO TAKE IT

Families are not obligated to accept a low income loan if it is awarded to them. One financial aid administrator recommends applying for aid and comparing the loan awards to determine the best financial deal.

7) WORKING WILL HURT MY ACADEMIC SUCCESS

Students who attempt to juggle full-time work and full-time studies may struggle. But research shows that students who work a moderate amount often do better academically. Securing an on-campus job related to career goals is a good way for you to help pay college costs, get experience and create ties with the university.

8) MILLIONS OF DOLLARS IN SCHOLARSHIPS GO UNUSED EVERY YEAR

Professional scholarship search services often tout this statistic. In fact, most unclaimed money is slated for a few eligible candidates, such as employers of a specific corporation or members of a certain organization. Most financial aid comes from the federal government, although it is a good idea to research nonfederal sources of aid.

9) MY FOLKS WILL HAVE TO SELL THEIR HOUSE TO PAY FOR COLLEGE

Home value is not considered in calculations for federal aid. Colleges may take home equity into account when determining how much you are expected to contribute to college costs, but income is a far greater factor in this determination. No college will expect your parents to sell their house to pay for college.

10) I SHOULD LIVE AT HOME TO CUT COSTS

It’s wise to study every avenue for reducing college costs, but living at home may not be the best way. Be sure to consider commuting and parking costs when you do this calculation. Living on campus may create more opportunities for work and other benefits.

11) PRIVATE SCHOOLS ARE OUT OF REACH FOR MY FAMILY

Experts recommend deferring cost considerations until late in the college selection process. Your most important consideration is to find a school that meets your academic, career and personal needs. In fact, you might have a better chance of receiving aid from a private school. Private colleges offer more financial aid to attract students from every income level. Higher college expenses also mean a better chance of demonstrating financial need.

12) WE CAN NEGOTIATE A BETTER DEAL

Many colleges will be sensitive to a family’s specific financial situation, especially if certain nondiscretionary costs, such as unusually high medical bills, have been overlooked. But most colleges adhere to specific financial aid award guidelines and will not adjust an award for a family that feels it got a better deal at another school.

FINANCIAL AID AND SCHOLARSHIP WEBSITES

fafsa.ed.gov- this U.S. Department of Education website will walk you through the process of preparing for, filling out and following up on submission of the Federal Free Application for Financial Aid. Make sure to check out the heading topics for additional student aid information.

fafsa4caster.ed.gov- By using FAFSA4caster, you and your family will receive an early estimate of eligibility for federal student aid. This Web site provides you with an opportunity to increase your knowledge of the financial aid process; become familiar with the various types of federal student aid that are available; and investigate other sources of aid, such as grants and scholarships. When you're ready to apply for aid, you can easily transition from FAFSA4caster to FAFSA on the Web. Much of the information that you enter in the FAFSA4caster will populate your FAFSA on the Web application, making the experience of applying for federal student aid a lot easier.

fastweb.com - this site is an amazing resource for any college bound student. Users fill out a profile of themselves and FastWeb matches their data to the criteria of over 600,000 scholarships. Students establish a mailbox that scholarship notices are sent to and they can also receive an e-mail when a new award has been posted that they may be interested in. This site is not restricted to just high school seniors and it often contains links to scholarship organization pages so that students can apply for the award online.

meritaid.com- this brand-new comprehensive website is dedicated to helping students and parents discover merit aid scholarship opportunities nationwide.

petersons.com - This site gives you access to the Peterson's database of 800,000 scholarships and helps assess your best college deal. It also contains tips for finding money for college and has links to every undergraduate institution accredited in the United States. This page is the all-around college and financial aid information site.

finaid.org- This site contains excellent information about financial aid scams. It serves to educate financial aid candidates as to how they can obtain the best aid package possible. This site, among many other things, offers great strategies on how parents can maximize their student's aid eligibility and information on military aid (ROTC) programs. An electronic newsletter is available by subscription.

A Final Note... When searching for scholarships, most students use the Internet to save time. When you utilize the Internet to search for scholarships, there are both fee-based and free services. If you decide to use a free service, be aware of their privacy policy and what they plan on doing with your personal information. If you decide to use a fee-based service, many offer risk-free sites, a strict privacy policy, and ongoing customer support for their paying members. In general, free and fee-based services offer the same information often in different formats; it is up to you to determine your individual comfort level and expectation from internet search sites. Use caution with a fee-based service and be aware of financial aid scams which are often presented as Scholarship

Search Services. Although there are reputable, fee-based companies; you should investigate them thoroughly many of the websites above can help you do this.