HOW TO PAY FOR COLLEGE

The single most important step towards a financial plan to pay for college is to complete the “Free Application for Federal Student Aid” (FAFSA). All schools use the information from this form to develop their offers of financial aid. The only way to tell what kind of a financial aid offer a school will make you is to file the FAFSA. It’s free and does not commit you to any obligations. It is simply a way for schools to inform you of what sort of financial assistance they would be able to provide you if you attend. You can choose to accept any, all, or none of the assistance that is offered. Even if you have no plans at the present to attend school after high school graduation, go ahead and file the FAFSA. You may get an offer that looks better than the job market on your horizon. The FAFSA can be filed on or shortly after, January 1st of your senior year. It is in your best interests to get this done as soon as possible. The form asks for information from your tax return as well as that of your parents. Estimate this information if you have not got your taxes done yet. Schools have limited funding for what is called campus based federal aid and they all have different timelines for awarding it to students. Get the FAFSA done early to make sure you are considered for these funds. Even if you are eligible, if you file after the schools deadline you will miss out on some funding you deserved. You should consider the advantages of filing the FAFSA on the Internet. It’s clean and quick. Check out the web sites listed in this packet before this year’s application becomes active. When we receive the hard copies of the FAFSA sometime in November, the counselor will make sure all seniors receive a copy. Use it to get your information together before filing on the Internet. In order for men 18 years and older to be eligible for the maximum amount of federal financial aid, they must be registered with the Selective Service. This can be done electronically while filing the FAFSA on line. The only requirement for filing the FAFSA is that you finish a high school program, are an American citizen, and you need the money in order to be able to afford college.

Free Application For Federal Student Aid (FAFSA)

The FAFSA determines how 70% of all the financial aid students receive is allocated. All that is required of you is to complete the application. The US Department of Education suggest the following steps to complete the FAFSA:

a. Get a PIN. To sign your FAFSA electronically, you (and your parent, if you are dependent) need a PIN. You can apply for both PINs at www.pin.ed.gov. Your FAFSA will be processed faster if you sign using a PIN.

b. Print the Pre-Application Worksheet. The questions on the paper FAFSA are numbered differently from the online FAFSA, using the Pre-Application Worksheet will help you stay on track as you fill out the online application. Get a Worksheet at www.studentaid.ed.gov.

c. Save Your FAFSA. Use the “Save” button at the bottom of the screen often. If you lose your Internet connection, you can return to the FAFSA you saved. NOTE: If you click the “Exit” button, you'll not only close your application, but you’ll erase all the information you entered since the last time you saved it.

d. Get Help. The “Help” button at the top of every screen has a complete index of help topics. In addition, you can chat with a Customer Service Representative over the Internet by clicking the “Chat” button. If you still need more help, call 1-800-4-FED-AID.

e. Sign Your Application. If you have a PIN, use it. Otherwise, you’ll need to print the signature page and mail it. If you are a dependent, a parent will need to sign your FAFSA as well. Your parents can use a PIN or the signature page.

f. Submit Your Application. Click the “Submit” button located on the very last page of the online FAFSA form. After submitting your application, you’ll be taken to a new page that confirms your submission and gives you a confirmation number. Save a copy of your application to a disk and write the confirmation number on it.

If you would like to complete this process at school with some assistance, contact Jack Gribble at 775-3171 or jgribble@republic.wednet.edu to arrange an appointment. I am available Thursday evenings from 2:00 to 7:00 P.M.

The second most important source of funding for college comes directly from the schools you are considering attending. Each school has a different set of policies, procedures, and timelines, which govern accessing this assistance. You need to contact the schools in which you are interested early and often to make sure you understand what it is they expect from you and when they expect it.
The third major origin of financial aide for paying for school is the local scholarship packet. The school counselor will deliver one of these packets to every senior at least a month before spring break. Many of the local scholarships require you to provide information from the FAFSA. If you fail to file the FAFSA, you place yourself at a disadvantage when competing for local scholarships.
The last resource is doing a general scholarship search. There are various Internet resources to utilize in this process. Additionally, there are a limited number of scholarships in the counseling office for your consideration. You can find an index to these scholarships on the RHS web page and in the file cabinet in the counseling office marked Scholarships.

THE FINANCIAL AID PROCESS
(This is a general outline of how the financial aid process works.)

Complete the FAFSA and file it, preferably on the Internet. Once the federal processor receives it, the information you provided will be used to determine how much and what kinds of financial aid you are eligible for.
Shortly there after, you will receive in the mail a “Student Aid Report” (SAR), which will confirm the information you provided on your FAFSA and let you know about the level of aid you can expect. If you need to change any of this information, FIRST CONTACT THE FINANCIAL AID OFFICES OF THE SCHOOLS YOU ARE INTERESTED IN ATTENDING! Do not make any changes with the federal processor unless directed to do so by a college financial aid officer.
On the SAR you will find an “Expected Family Contribution” (EFC). This is the amount the amount of money the processor has determined that your family should be able to contribute towards your educational expenses during your first year in school. If you feel this amount is unreasonable because of family and financial circumstances which were not adequately addressed in the FAFSA, you can meet with the financial aid officer at one of the colleges you are interested in attending and explain your situation. This school officer has considerable latitude to change your award offer based on the information you provide.
Schools to which you have applied will use this EFC to put together a financial aid offer proposal for you to consider. It works like this. Every school comes up with an approximate cost of yearly attendance, which includes tuition, room & board on campus, books & supplies, and other basic living expenses while you are a college student. The college financial aid office takes this yearly cost of attendance and subtracts your EFC from it. What is left over is your “need.” Your financial aid offer from a school will typically cover almost 100% of your need in the form of grants, work-study, and loans. The amount of financial aid offered will differ depending on the yearly cost of attendance at the school to which you are applying.

in the examples below you can see how possible aid offers could differ at three different schools for a student who has and EFC of $500.

SCHOOL
LOANS
GRANT
WORK STUDY
EFC
COST OF ATTENDENCE $

A
$3,000
$1,000
$5,500
$500
$10,000

B
$2,500
$1,000
$3,500
$500
$7,500

C
$1,500
$1,000
0
$500
$3,000

If you are eligible for a federal grant, that grant amount will be available to you at any school you attend. The other components of financial aid will be somewhat similar from school to school, but can differ as illustrated in the example above. Note that the difference between the cost of attendance between schools A & C is $7,000, but the actual out of pocket increase to the student is a loan increase of $1,500.

The vast majority of students who attend college will end up having to take out some kind of student loan in the process of completing school. Students graduating from four-year colleges in the year 2000 did so owing about $20,000 in student loans. That is roughly the same amount by which they increased their yearly income over that of their classmates who graduated from high school and went straight to work.

In general, when you apply for financial aid, the schools to which you have applied for admissions will inform you of what sort of loans you will be able to apply for while attending school. There are several different types of loans offered. Some are applied for directly from the school and supplied from the Department of Education, while others are secured from more traditional lending institutions. You are strongly advised to seek the help and advise from your parents or any other family members in whom you have confidence about the management of financial affairs. It is also advisable to have someone like this assist you in budgeting out any loan disbursements to make sure that the priorities of your educational expenses are taken care of. The only way to make a limited income work while attending school is to work within the limits of a financial budget.

Taking out a loan is a serious decision and a long-term commitment. You need to make sure you understand all of the details of any loan you become obligated by. Get the advice and assistance of someone whose ability to manage finances you trust and respect. Consider having this person assist you in budgeting any loan money left over after paying for your books, tuition, room & board. Temper this perspective with an understanding to, that an education is a sound investment in the most valuable asset you will ever have, you!

Play the Financial Aid Game To Win

Many financial planners are advising parents with college bound children to begin saving when children are born and to start serious financial planning during the student’s sophomore year. Financial aid applications are submitted in January of the student’s senior year, but eligibility is based on the previous year’s tax returns of parents and students. To ensure students are eligible for maximum consideration for federal financial aid (which makes up 70% of all the assistance students receive to attend school after high school), here are a few tips financial planners suggest.

Parents’ assets: Schools consider 35% of student assets into the family contribution towards paying for the costs of college. Less than 6% of parental assets are considered. For every dollar a college bound student has in savings, 35 cents of federal financial aid eligibility lost.

Parents’ income: If your employment allows for the flexibility, try to avoid any financial activities during the financial aid considered tax year that will spike your income. Defer bonuses, avoid incurring capital gains. Maximize contributions to retirement funds.

Children’s assets: Any funds in the student’s name should be used for college related expenses prior to submitting the financial aid application. Things like cars, clothes and computers are not reportable assets on the application.

Children’s income: Most analysts advise against children working during their junior year of high school. As much as 85% of every dollar earned will be deducted from aid eligibility. High school students should spend their time and energy especially during their junior and senior years, doing their absolute best academically to maximize their eligibility for merit based financial aid.

Knowing the rules of the game helps to ensure you get a fair shot at financial assistance. For more general information, please contact me, Jack Gribble, Republic School counselor at 775-3171 or jgribble@republic.wednet.edu. Professional tax consultants or accountants can give you specific advise on your personal financial questions.