With the cost of college on the rise — in-state tuition and fees at public National Universities jumped 211% over the last 20 years — many students and families are relying on external sources to help pay for postsecondary education and are seeking financial aid tips.
Financial aid falls under two categories: merit-based and need-based.
Universities and colleges distribute merit aid based on academic and talent achievements rather than a family’s household income. Counselors at the University of South Dakota, for example, look at ACT scores and high school credentials during the admissions process to determine eligibility, says Lindsay Miller, the school’s interim director of financial aid.
The federal government, state government and colleges award need-based aid through grants, scholarships, work-study and loans. A student’s level of financial need is determined by the Free Application for Federal Student Aid, or FAFSA. For a smaller number of schools, mostly private colleges, filling out the CSS Profile may also be necessary.
Private scholarships are typically the only source of aid that require an additional or separate application, says Shannon Vasconcelos, director of college finance for Bright Horizons College Coach.
The process of figuring out how to pay for college can be daunting and time-consuming, so here are 10 financial aid tips from experts.
1. Don’t make assumptions about financial aid eligibility.
Deciding not to apply for financial aid can be a mistake, Vasconcelos says.
“There’s a likely chance that you are, in fact, eligible,” she adds. “Don’t assume that because your neighbor, who you think has about the same amount of money as you do, didn’t qualify, you won’t qualify. You have no idea what’s going on in other peoples’ household finances.”
2. Don’t shop based on sticker price.
It can be tempting to disregard a college based on its high price tag. But in almost all cases, the sticker price is not what a student is actually going to pay, says Melissa Yakabouski, director of undergraduate admissions at the University of Mary Washington in Virginia.
Families should pay attention to the net cost, which is the sticker price minus grants and scholarships. This can be determined through the net price calculator on most colleges’ websites.
A student answers questions about household finances, GPA, test scores and extracurricular activities. Those responses are used to estimate the amount of grants and scholarships a college might award the student. Financial aid numbers are then subtracted from the full cost of attendance to predict what a family might pay.
3. Avoid paying third parties for scholarship searches.
Many outside scholarships are available, including through churches, employers, local businesses and philanthropic organizations. Miller recommends that a student should start researching scholarships a year before the funds are needed.
But she warns against paying someone to search for scholarships and against giving out personal information such as a Social Security number. There are free resources to use, including the College Board, FastWeb.com and the U.S. News Scholarship Finder.
4. Use the IRS Data Retrieval Tool.
It can be easy to make a mistake on the FAFSA, but using the Internal Revenue Service’s Data Retrieval Tool can reduce filing time and error rates, experts say.
Instead of manual input, the virtual tool automatically transfers federal tax return information from the IRS to a student’s online FAFSA form.
“Estimating income information or making input errors on the FAFSA application can complicate the process when it is time for financial aid to be offered,” Courtney Henderson, director of the student financial center at the University of Oklahoma, wrote in an email.
Those who filed a U.S. tax return with the IRS typically qualify to use the tool, but there are exceptions.
5. Be aware of deadlines.
The FAFSA opens every Oct. 1, but the federal deadline to apply isn’t until June 30 of the following year. State and college deadlines can be sooner.
Missing a deadline can result in money being left on the table.
“Generally speaking, the forms are submitted once online to all of your colleges that require them,” says Jeff Levy, co-founder of Big J Educational Consulting in California. “What that means is if you’re submitting the FAFSA, let’s say, one time to all of the colleges, you have to submit before the college with the earliest deadline.”
6. Apply early.
Students should not only meet deadlines but apply early, as some financial aid is awarded on a first-come, first-served basis. Pay attention to priority deadlines, experts advise.
States such as Alaska, Georgia, Illinois, Indiana, Kentucky, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Vermont and Washington have “as soon as possible after Oct. 1” deadlines because “awards are made until funds are depleted,” according to the Department of Education’s Federal Student Aid Information Center, or FSAIC.
“Depending on the state you live in, it can matter (when you file) as well as the school’s own priority deadlines for the FAFSA and if they have a separate deadline for the CSS Profile,” says Timothy Saulnier, director of financial aid at UMW.
7. Check email regularly.
After completing the FAFSA, a Student Aid Report, which includes an expected family contribution to determine financial aid eligibility, is usually sent to an applicant’s email address. Colleges may request additional information over email.
“Make sure you are paying attention to your email so that you are complying with any requests,” Vasconcelos says.
8. Look at out-of-pocket costs.
At first glance, a financial aid package from one college may seem larger than an offer from another school. But pay attention to out-of-pocket costs.
“You can look at a private school that costs $50,000 and they give you $30,000 of aid, for example,” Saulnier says. “The out-of-pocket cost is $20,000. And then say UMW is only giving you $11,000 but the cost (of attendance) is $30,000. The net is $19,000, as an example. Even if one school is giving you a lot more aid, it may not necessarily be a better financial aid package.”
9. A school’s first offer is not always the final offer.
The FAFSA requires tax information from the “prior prior” year, which may not reflect a student or parents’ current income or job status. If family finances have changed for the worse, a student should alert his or her college’s financial aid office to explain circumstance changes and ask for a financial aid package reconsideration, which is called an appeal.
But changes to financial aid packages are not limited to special circumstances. A student with a merit scholarship, for instance, can try to negotiate for a higher offer, Vasconcelos says.
“There’s no real downside to doing it,” she adds. “The worst they would do is say ‘no.’ Families are often surprised how often they say ‘yes’ and throw a few more thousand dollars your way.”
10. Contact college financial aid offices with any questions.
Additional details around specific financial aid requirements or deadlines are available on many colleges’ websites. But if the information is still unclear, call or email the financial aid office.
FSAIC also serves as a resource. Questions about federal aid can be answered by email, phone or web chat.
“It’s never too early to be thinking about paying for college,” Miller says. “You definitely want to educate yourself and be proactive. Admission counselors at universities are going to be a great resource for asking about scholarship opportunities, and financial aid offices are going to be helpful during the entire financial aid process for students.”
Trying to fund your education? Get tips and more in the U.S. News Paying for College center.
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