15 Things To Know About Financial Aid For College

1. Once you have started collecting financial-aid information.
Call or visit the Web site of each prospective college in order to obtain the
school’s estimated total cost of attendance. This fi gure is commonly referred
to as the Cost of Attendance, or COA. The COA includes tuition, room, board
(meals), books, personal expenses, and travel. Infl ate the COA for each college
by 5 percent for each year until the year you will enroll. Once you have done so,
add the COA numbers, as appropriate, to the other information you have collected
regarding the colleges on your list.

2. Check with the prospective colleges to see which financial aid
applications they require.Most college Web sites have admission and fi nancial aid sections that are designed to assist visitors who are interested in learning about how to apply for
financial aid. If the Web site of a particular college does not specify the financial
aid-application required, call the school to inquire. As you begin your research, it
is useful to note that all colleges require the federal aid form, commonly known
as the FAFSA, and that some colleges require additional financial-aid forms.
In fact, many private colleges will request that you complete the CSS/Financial
Aid Profile, which you can learn more about on The College Board’s Web site at
www.collegeboard.com.

3. Estimate whether you will qualify for need-based aid at each of the
colleges on your list. In the 2005-06 academic year, about 77 percent of the $61 billion doled out by colleges in the form of need-based or “gift” awards was based on the ability (or
lack thereof) of families to pay college costs. Thus, it is advisable to determine
whether you and your family will qualify for such funding when the time comes for
you to enroll in college.

4. To determine whether you are likely to qualify for need-based aid, use
one of the many free Web-based estimators to determine your Expected
Family Contribution.Your Expected Family Contribution (EFC) is the amount of money that colleges will expect you and your family to contribute toward your annual Cost of Attendance
(COA). Note that the EFC calculation considers the fi nancial resources of
both parents and students. EFC estimators are available at free Web sites like
www.finaid.org, www.collegeboard.com, and www.petersons.com.

5. You should obtain an EFC estimate during the spring or summer of
junior year. Spring or summer of junior year is a good time to obtain an EFC estimate because
the calendar year that starts when you are halfway through your junior in
high school is the same calendar year that will be used to calculate your EFC
when you apply for aid for your freshman year in college. Thus, the EFC estimate
obtained during the winter/spring of your junior year should be a reasonably
accurate one.

6. Enter your family financial information in one of the free Web-based
estimators to obtain your EFC estimate.Once you have obtained an EFC estimate, record it someplace on your college list. Note: If a college on your list requires the CSS/Financial Aid PROFILE application in addition to the FAFSA, you will have to run two estimators, one for the
federal need system and one for the PROFILE’s institutional system. The Websites
mentioned in paragraph six above provide access to both estimators.
Once you have run the estimator(s), as appropriate, record the federal EFC (and
the PROFILE EFC, if it is different) alongside the Cost of Attendance for each of
the colleges on your list.

7. For each college on your list, subtract the EFC(s) from the Cost of
Attendance to determine whether you are likely to qualify for needbased
aid in the event you ultimately enroll in such college.
COA–EFC = need-based award estimate
If the EFC is signifi cantly higher than the COA (i.e., you get a negative answer),
write “FA unlikely” next to the college name.
If the EFC is close to the COA—either slightly higher or lower (i.e., you get an
answer close to zero)—write “FA maybe” next to the college name.
If the EFC is signifi cantly less than the COA (i.e., you get an answer that is positive
and well above zero), write “FA likely” next to the college name.
This will be your shorthand for noting the likelihood of qualifying for need-based
fi nancial aid at each of the colleges on your list.
Note: The EFC estimate (whether federal or institutional) does not change based
on the cost of attending the various colleges on your list. (In other words, EFC
and COA are independent variables.) Depending on the diversity of colleges on
your list, it is very likely that your calculations will indicate that you are likely to
receive need-based aid at some schools but not others. To confuse matters even
more, your calculations may indicate that, in some cases, you have federal need
but not institutional need at the same college. Unfortunately, this is the way the
system works. That’s why it is so important to get organized and stay organized.

8. You are not likely to receive need-based aid at any of the colleges on
your list that carry the notation “FA unlikely.” Before you give up hope,
however, you should continue reading this paragraph nine. When you
have fi nished, read paragraph ten as well. Even if you have determined that you are not likely to receive need-based fi nancialaid at all or some of the colleges on your list, you may qualify for fi nancial assistance in the way of merit-based awards or scholarships at some or all of the
colleges on your list.

9. Your junior-year, need-based aid award estimates are not set in stone;
they are estimates.
Remember, your need-based award estimates depend on two variables–the Cost
of Attendance and the Estimated Family Contribution. If you make changes to
your college list by including schools with higher costs of attendance, for example,
you may qualify for need-based awards in the event you ultimately enroll in
one of such higher-priced institutions. Likewise, if your family’s fi nancial situation
changes (through decreased income, increased expenses, or both) by the time
you actually apply for fi nancial aid during your senior year in high school, the expected
family contribution estimators may yield lower numbers. This may in-turn
change your need-based award status.
Note: If your family’s fi nancial situation changes signifi cantly anytime after you
apply for aid, you should consult with aid counselors at the colleges you are seriously
considering and to which you are likely to be admitted. If a college makes
an allowance for your “special” or “changed” fi nancial circumstances, you may
move from “FA unlikely” to the “FA maybe” or “FA likely” category.

10. The next step is to learn more about the specifi c fi nancial aid policies at
each of the “FA likely” or “FA maybe” colleges on your list.
Acquire and read the fi nancial aid material for each college with either the “FA
likely” or “FA maybe” designation. Make notes for yourself that include things like
which applications are required, when they are due, and whether there are scholarships
that require a separate application.
Careful reading may also uncover other important facts about a given college’s
aid program. For example, a college may mention the percent of need that it typically
meets or whether it considers the value of the family home in its aid calculations.
A college’s “internal” aid policies can affect your EFC in a major way.

11. Visit college campuses during the spring of junior year and the summer
before senior year. (Visiting campuses during the fall of senior year is
acceptable as well.) It is recommended that during visits to colleges
that have the “FA likely” or “FA maybe” designation, you should make
an effort to visit the fi nancial aid offi ce in person.
Before any campus visits, rerun the estimator(s) with current income and savings.
Also check to make sure you have the latest college costs when you subtract
the EFC from the COA to determine your need-based award estimate. If
necessary and as appropriate, revise the prior “FA unlikely,” “FA likely” or “FA
maybe” designations on your list. Call the aid offi ce and ask for an appointment
with an aid counselor. (If you are unable to schedule an in-person meeting, don’t
worry. The following steps can be completed over the phone or via e-mail.)

12. The purpose of the visit is to help make you a truly well-educated financial
aid consumer. While your knowledge of terms like EFC and COA
and your careful research into the aid policies of specifi c colleges
already make you an above average consumer, it is recommended that
you take things a step further.
An in-person conversation with an aid counselor at a particular college is likely
to give you helpful insights on how the aid policies of that college match up with
your family’s unique fi nancial situation. If you have to, skip the campus tour. In
the long run, time spent in the aid offi ce will be much more valuable than time
spent learning more about a college’s buildings and traditions. Besides, most colleges
offer video tours on their Web sites.

13. Bring copies of all documents that verify the data you used when run
ning the Web-based estimator, and the resulting EFC, to each and every
in-person meeting with an aid counselor. You may also want to bring
with you copies of any other documents that shed light on your particular
financial situation.
During your in-person meeting, show the counselor your current EFC estimate
and any supporting documentation. Then ask whether (assuming no change in
your fi nancial situation prior to senior year when you submit your data on the actual
FAFSA and PROFILE, as appropriate) it is reasonable for you to assume that
the college’s calculation will be substantially similar to your current EFC estimate.
Many colleges, especially private schools, have their own set of aid policies that
they use to adjust standard EFC calculations. The counselor should offer to explain
any and all policies that may affect your current calculation.
If you have special circumstances that were not factored into your Web-based
EFC estimate, explain them and ask if they can be considered. For example, will
the aid offi ce consider family resources that are allocated, annually, to help pay
the nursing home expenses of your grandparents?

14. After you have gotten a better sense of what your actual EFC might be
at a particular college, ask about how the college might meet your fi nancial
need. (Remember, COA–EFC = fi nancial need.) In other words, ask
about the likely combination of scholarship/grant, student loan, and
work-study?
In financial-aid terms, the determination of the composition of an award is called
“packaging.” The fi rst thing you want to know about a college’s packaging policy
is what percent of your demonstrated need the college will meet with aid.
You should realize that if a college does not meet 100 percent of your fi nancial
need, you will be responsible for the amount of the shortfall (called the “gap”) between
your calculated aid eligibility and the amount you actually receive. In other
words, you will be responsible for contributing both your calculated EFC and the
gap. This is a very important concept to understand. While it may not seem fair,
it’s simply the way the system works. Again, this is a very important concept and
you should discuss it with an aid counselor as necessary.
Remember, during junior year (before senior year when admission and aid applications
are due), you are merely attempting to get an idea of what your bottom
line fi nancial responsibility will be. This may be important because, again, if the
colleges on your list are colleges that will not meet your full need, you will ultimately
have to contribute sums greater than the Estimated Family Contribution.
Since there are only about 75 colleges out of the roughly 2,000 four-year institutions
in the United States that will meet 100 percent of the need of all qualifi ed
applicants, you will likely be responsible for more that just the EFC; you will have
to contribute an amount equal to the “gap” as well.
The next part of the packaging discussion centers around how much of your
need-based award is likely to be met with gift aid (i.e., scholarship or grant) and
how much will you likely be required to meet through student loans and a workstudy
job. Obviously, the larger the amount of scholarship and/or grant money
awarded, the better the package. As you go through this process with various
colleges, you should understand that you are not likely to get exact answers to all
of your questions. Don’t worry. Even if some of the answers are vague, you will
slowly but surely become a more educated fi nancial-aid consumer. After getting
through just a few aid-counselor interviews, you will know tons more about how
the aid system works than you did when you got started. This knowledge will be
of considerable value as the admission process gets underway in earnest during
senior year.

15. When you have gone through the procedure outlined above for each of
the colleges on your list (whether in-person, by phone or by e-mail), sit
down at home and sort out where you stand in relation to paying the
yearly costs of college.
With a general idea of your fi nancial “bottom line” for each college, evaluate
which of the colleges are affordable. Understand that affordability in this sense
means more than simply determining whether paying for college is within your
monthly budget.
A college can be affordable if, by any reasonable means, you can come up with
your bottom line expectation. This includes adjusting current spending habits,
drawing down on savings, taking out a parental loan, having the student borrow
more or earn more from a job, receiving assistance from relatives, and so forth.
Based on your assessment of which colleges are affordable, your college list may
have to be adjusted.
Ideally, a college list that considers paying issues will include one or two colleges
that are not a fi nancial problem, three or four that aid will make possible, and one
or two that might really be worth the stretch.
If, rather than follow the above advice, you push fi nancial matters into the background
and enter the aid process with little knowledge about how it might work
for you, you risk encountering major fi nancial problems somewhere along the
way. The money crunch may show up early–by not being able to attend a fi rst
choice college–or later, after enrollment when the tuition bill cannot be paid and
the student must leave school. With a combination of good fi nancial planning and
a desire to make it work, any college can become affordable.