Tag Archive for: Scholarships

At some point, most of us say, I wish I knew then what I know now. That same sentiment holds true for some college students regarding the financial aid process. After learning about the financial aid process, some students look back and wish they made different decisions.  Being better informed from the start changes how students approach their financial aid and funding options.

Here are five things students wish they knew about the financial aid process while planning for college.

1. It’s Never Too Early to Start Planning and Saving for College

College-bound students and their families often wait to think about the admissions process and financial aid options. Many times, they wait until the student’s junior or senior year of high school. However, students should research schools and possible career options early. Getting started in high school or junior high gives them an idea of which schools are the best fit. Heather, a junior in college, said she drastically underestimated all the costs associated with her education. She didn’t know she needed to rely on student loans as much as she did. Even if you expect a scholarship, keep in mind the total costs you and your family may incur. These costs can have an impact on your long-term planning and financing.

2. Know Your Deadlines and Don’t Miss Them

Braxton is in his freshman year and says he missed out on some state grant money because he waited too long to complete his FAFSA (Free Application for Federal Student Aid). He said if he’d been more aware of his state deadline, he would have applied sooner and likely received money from his state grant program. He also said there were some scholarships that had very early deadlines that he missed. It takes some organization and research to be sure you know all the relevant deadlines for various scholarship and grant programs.

3. You Don’t Have to Figure It All Out on Your Own

The financial aid process can often be confusing to first-time students. Rather than trying to do it all on your own, you can find help. Your high school counselors are great resources. If you have a college or university nearby, they may offer free FAFSA workshops or presentations. They can also help you understand the financial aid process better. If you speak with your high school counselor or someone from a financial aid office, don’t be afraid to ask questions so you’ll be certain you know what you need to do. Although you’ll be doing your first FAFSA as early as October of your senior year, it’s never too early to begin learning everything you need to know. Federal Student Aid at the U.S. Department of Education has a FAFSA4caster that you can use to understand your options for paying for college.

4. You Don’t Have to Accept the Full Loan Amount on Your Award Letter

Once your financial aid application is finalized, your financial aid office sends you an award letter. Your award letter may show different types of financial aid, such as scholarships, grants, and student loans. Colleges usually provide award packages to cover your entire cost of attendance (COA). Your COA includes tuition, books, supplies, housing, etc. However, only borrow what you need, even if you were offered a higher amount. You don’t need to accept the full amount awarded.

Another college student said she assumed she should take the amount offered. At first, she thought the extra money could be a cushion if needed. She admitted she spent frivolously on things she really didn’t need. She forgot her loan was unsubsidized. That means interest accrued on her loan while she was in school. Student loans are a great resource to help pay for school as long as you understand the terms and conditions and only borrow what you need.

5. Don’t Assume You Won’t Qualify for Financial Aid and Skip Completing the FAFSA

Some students and families believe that their income may be too high to qualify for any type of financial aid and simply do not complete the FAFSA. Although you may not qualify for grants, you still need to complete the FAFSA to determine your eligibility for student loans and college work study. Some programs (such as unsubsidized student loans) are not need-based and do not have an income limitation. Also, the FAFSA is free to complete, and you could qualify for some other types of aid. One thing families forget is that if they happen to have a higher income, they may also have multiple children attending college, which is a big factor in determining financial aid eligibility. Factors such as your family income, household size, and the number in your family attending college all help determine your financial aid eligibility.

By planning ahead and thinking about the cost of college early, many of these common scenarios can be avoided. By starting your planning early, you can avoid the “I wish I knew then what I know now” feeling down the road.

Financial aid is awarded in many forms, and as a student, it is important to know all of your options before deciding which awards to accept. You’ll want to compare the aid and calculate the remaining costs of all the schools you are considering. Eligible students may receive an award letter or a financial aid package.

The Financial Aid Process

Submitting your Free Application for Federal Student Aid (FAFSA) is an important first step to ensure your financial aid eligibility is considered. Your program must first accept you for admission, you must complete your FAFSA, and submit any other information your school requires. To be in the best position, complete all steps on or before each school’s published deadlines. When schools receive your FAFSA information, they calculate your family’s Estimated Financial Contribution (EFC). Your family’s actual financial contribution and the composition of your award letter may differ among schools. Your EFC is deducted from the total Cost of Attendance (COA) to determine your financial need. If you are eligible for financial aid, your award letter will contain all of the aid programs you are eligible to receive, the steps you need to take, and the deadlines for responding to the award letter.

Note: Although you will see your EFC on the Student Aid Report you received after filing the FAFSA, it is probably not the amount you and your family will actually pay for college. For more information, review the article I Submitted My FAFSA – Is the Expected Family Contribution What I Have to Pay for College? When you review your award letter, read all information, understand each program, and know your obligations to ensure you receive the funds. You will need to select the awards you would like to accept and respond to your award letter by the date indicated.

Types of Financial Aid

There are several different types of financial aid including grants, scholarships, federal work-study, and loans. The terms of each type of aid vary, so it is important to understand the differences.

Grants are typically based on financial need and do not need to be repaid. They may include funds from federal, state, and institutional sources. Programs apply grants to your college bill.

Scholarships are based on academics or other performance criteria, financial need, or a combination of both and do not have to be repaid. Scholarships usually come from institutional or private sources who apply funds to your college bill.

Federal work-study may be listed on your award letter, but in order to receive the funds, you must obtain a qualifying job and work to earn this type of financial aid from federal and institutional sources. Your financial aid office will post eligible jobs that are open to qualifying students. Once you secure a job, you’ll receive paychecks throughout the year for your hours worked. Work study does not apply funds to your college bill.

Loans are funds you borrow now and pay back with interest after you finish or leave school. They may come from federal, institutional, or private sources. For most loans, you will be required to take additional steps to secure the funds. If you receive a loan, it is applied to your bill. Many loans also charge fees, which are deducted from your loan amount. Be sure to read all of the loan terms before you borrow.

Determining the Amount You Owe After Financial Aid

Remember, colleges bill you for some costs prior to the start of each semester. The bill typically includes tuition and fees plus room and board charges if you live on campus. You will also have additional expenses such as books, transportation, and personal expenses that will not be included in your bill. Schools factor in all of this criteria when determining your overall cost of education. Your award letter outlines the total for each type of expense.

To determine the amount you will pay at each school, first deduct your grants and scholarships, then loans (minus fees) from your estimated college bill. Your school evenly divides and credits most aid to each semester’s bill.

You will also need to consider the cost of books and supplies at the beginning each semester, and any personal and transportation expenses you may have throughout each semester. If you have financial aid left after your school applies funds to your bill, you can use it to help with these expenses. Obtaining a work-study job can also help with personal expenses. As a general rule, it’s best to have additional funds set aside to help with personal expenses as well.

To continue to receive aid, you will need to make satisfactory academic progress toward your degree. Scholarships may require that you achieve a certain grade point average or meet other performance criteria. Programs also include renewal information with your award letter.

Additional Funds to Help Cover College Costs

In addition to the financial aid listed above, there are alternate sources that can help cover the cost of college.

Private Scholarships

There are a number of private scholarships available, which you can search for with Peterson’s College Scholarship Search. Your guidance counselor can also be a great resource for private scholarship information. Private scholarships can help offset the amount you need to borrow.

Direct PLUS Loans

These are federal loans that some schools may include in an award letter. Direct PLUS Loans are subject to certain eligibility requirements. Typically graduate or professional degree students or parents of a dependent undergraduate student are eligible to receive these loans.

Private Loans

As an alternative, private loans can also assist with covering college expenses. Private student loans, sometimes known as alternative loans, are made by private lenders such as banks, credit unions, and financial institutions. Private student loans are based on credit and are most often used to fill the gap between the cost of attending college and family savings, grants, scholarships, and federal student loans.

Paying for school can feel like an overwhelming process. It’s crucial to meet all of your deadlines to be considered for eligibility. Mapping out your deadlines on a calendar can help keep these details organized. Make sure you consult the available resources and fully understand each step of the process to get the most out of financial aid.