BOSTON (CBS) – Over $150 billion is available in aid for the school year starting in September. That money will come from the Federal government, the state’s colleges and private organizations. Financial aid comes in several forms. Grants and scholarships (that don’t need to be repaid), jobs (so the kiddo can earn money), and a variety of low cost loans.
Where to find the aid is up to the student and her family. There are several resources for financial aid:
- State: High school counseling office; MEFA
- Federal: School’s financial aid office; U.S. Department of Education
- Institutional: School’s financial aid office
- Private: Check with your High School, Community Groups, religious organizations
Filling out the Free Application for Federal Student Aid (FAFSA) form is the first step. I found help if you need it, Completing the FAFSA. The FAFSA is used to apply for Federal programs such as Stafford and Perkins Loans, as well as Pell Grants.
Over 600 schools also use the CSS PROFILE Financial Aid Form, a profile produced by the College Board. “CSS” stands for College Scholarship Service.
The CSS PROFILE is used primarily by colleges for determining non-federal financial aid, such as institutional scholarships, grants, and loans. And there is a cost for filing the form.
The financial aid form needs to be filled out every year you are requesting aid. The information on the form determines what you can afford to pay as a family, your expected family contribution. The school’s financial aid departments also use the information in putting together the aid packages that comes in the award letter once the kiddo is accepted to their school.
Your income stream is what the schools are looking at as well as your assets. They expect you to pay a big chunk out of current income. If your income is over $100,000, it will be tough to qualify for grants unless you have more than one child attending college.
The formula looks at 3-6% of the parents’ assets to be used year for college expenses. As for the kids’ assets, they expect the kids to ante up to 25% or more. That can be a problem for some kids don’t want to part with their money; they think that their money is their money. Not so when it comes to aid!
Retirement assets, yours or the kids’ don’t count as assets when applying for financial aid. So invest in your retirement plan as well as save for college. What the schools will look at is how much you contribute to your retirement plan. When it comes time to pay for college they expect you to slow down those retirement contributions and use the cash flow for college.
Once that financial aid package comes if circumstances have changed such as a job loss or medical expenses connect with the school again and ask for a review. To compare different aid packages use the calculators at Finaid.
If your child is a junior this year when you start the college tours you should be stopping in to see the financial aid people as well as the soccer coach.
One more thing: A good resource would be the Peterson’s Guide. When my kids went to college we bought the book, now just go online.
How does Financial Aid work and where does it come from?
A couple more sites to help in your research:
Finaid.org – Offers an overview for applying for aid
FAFSA.ed.gov – Application for financial aid
FAFSA4caster.ed.gov – An estimate for your eligibility for aid
FastWeb.com – Lists of scholarships available