It now costs about $32,000 a year on average to attend a private university, and about $13,000-$15,000 to attend a public university. Where is a middle class family supposed to get all that money? That is what this report is about.
Surprisingly, there are many sources of financial aid for students. But you have to be smart about how you apply.
The first steps
In some households, parents take on most of the work involved in applying for student financial aid; in others, the high school student does everything himself. In what follows, I’ll address the high school student directly to make things easier, recognizing that most readers of this Guide will be parents, not students (email this Guide to your teen though!)
As a college-bound student, one of the first things you should do, preferably in your junior year, is talk to your high school guidance counselor about available financial aid. He/she can recommend many scholarships, loans, and work-study programs that you would never find on your own. Remember: There are thousands of sources of student help available, not just the few you know about. It’s your guidance counselor’s job to know about virtually all of them.
One thing your counselor will tell you to do right away is fill out the FAFSA form. FAFSA stands for Free Application for Federal Student Aid. This basic form will be used to determine your financial aid requirements by almost all schools and institutions that provide financial aid. Therefore, you must fill it out carefully and accurately.
You can access the form online at fafsa.ed.gov. Or you can get it by calling 1-800-FED-AID.
FAFSA is administered by the US Department of Education. You must file it early in the second semester of your senior year, as soon as her family has prepared their tax return (you’ll need information from that return to use on the form).
It takes 1-2 months to retrieve your evaluation, which will be called a Student Aid Report. Based on the financial information you provide about yourself and your family, the US Department of Education will estimate how much money you can contribute from your own resources toward your college expenses.
So, for example, if that figure is $9,000 and your total expected expenses at a college you plan to attend will be $13,000 for the first year, your “Financial Need” is $4,000. Many colleges, as part of their acceptance process, will offer financial aid packages that cover most or all of the Financial Need amount.
Also, some schools require so-called PROFILE forms. These are administered by the College Board and are used primarily by private colleges to estimate your eligibility for non-government loans (such as college-provided loans). The PROFILE is somewhat similar to the FAFSA but more detailed. You can obtain and submit the PROFILE at: Collegeboard.com.
Be sure to check with your guidance counselor and/or the colleges you’re applying to to see if there are any other forms you need to complete.
Keep in mind that scholarships, not loans, should be your primary goal. There are many specialized scholarships out there. Maybe you’re an inventor, or maybe you have a family member in the military, or maybe you speak an in-demand language for which the government or some other institution needs translators, like Hungarian or Korean. You’ll be surprised how many specialized scholarships you qualify for. Check with your guidance counselor and also visit Collegeboard.com to research this topic.
Beware of paid scholarship search services on the Web. Some of them are scams. At a minimum, check with the Better Business Bureau and your guidance counselor before paying someone a fee to search for scholarships for you.
Many scholarships require you to write a “scholarship essay.” If so, experts say, focus on answering the question the essay poses. The most common reason for rejection is that the student wanders and wanders off topic in the essay. Also: be sure to review before submitting!
As for student loans, there are two types: those provided by the government and those that are simply guaranteed by the government. The former usually has a lower interest rate.
The most sought after student loans today are these two: the Stafford Loan and the Perkins Loan. You can only borrow about $3,000 for your first year under the Stafford Loan (higher amounts for later years), and you must demonstrate at least moderate financial need to qualify. The Perkins Loan provides up to $4,000 for the first year but requires a demonstration of exceptional financial need. The Perkins is considered a very good loan for students because no interest accrues while you attend college.
If you can’t raise enough financial aid through scholarships and loans, your parents can get a PLUS loan (Parent Loan for College Students) or borrow from a private lender, such as a bank or other financial institution. .
Don’t be afraid to apply to the school you really want based on cost. The availability of student aid varies considerably between colleges, and the one you want to attend may have a sizable scholarship endowment, in which case it could be much less expensive than you think.
When estimating financial requirements, don’t focus entirely on tuition and room and board. You will also need money for books, transportation, and personal expenses (entertainment, clothing, etc.)
If a college accepts you and then offers you a financial aid package that you think is inadequate, and if this is a college you’ve proposed to attend, write a letter and request more financial aid, most experts say. Address the letter to the Director of the Financial Aid Office (get his name from the school switchboard). In his letter, try to provide a specific good reason why you need more help, such as “Our family has had a medical emergency” or “My father recently lost his job.” If you don’t have a good reason, you can try, “We have a large family and all four of my sisters are going to college soon.” That probably won’t work. However, if you’ve received a larger financial aid offer from another college, you should definitely mention that fact, experts say. It’s even a good idea to include the letter offering the financial aid. This may seem harsh, but it often pays off, as long as you’re a student the university really wants to have.
Check out the college ranking edition of US News & World Report. Includes the average amount of student financial aid received by students at each college. This should give you a pretty good idea of whether a given college is likely to give you the amount of help you need.
Be very careful not to get trapped by a college that offers a large financial aid package for the first year and then reduces it in subsequent years. Some colleges do this so that the best students or athletes attend. One way to verify this is to talk to current college students who are receiving aid. Also check with your guidance counselor, who may know of colleges in your area that have reputations for this type of tactic.
To-Do List: Junior Year and Summer Before Senior Year: Research colleges and all sources of student financial aid; Senior Year Fall: Talk to Guidance Counselor; apply to select colleges; apply for scholarships; Senior Year, January — File the FAFSA; Archive the PROFILE; apply for more scholarships and grants; Senior year, early spring: Review acceptance/rejection letters and financial aid offers from colleges, make your decision.