By now you’ve probably heard a million different messages about financial aid for college. It’s available; it’s not available; apply early; don’t worry; don’t bother. The state of the economy has further complicated an already complicated process increasing paying-for-college anxiety.
According to the College Board’s most recent “Trends in College Pricing” report the average yearly cost of just tuition and fees at a four-year college or university can range from $6,585 (for in-state students at public schools) to $25,143 (for students at private institutions) up by about 6 percent from last year. Add room and board and the range jumps to $14,333 to $34,132. The total cost at many private schools can be in the $50,000-per-year range.
But the fact of the matter is despite the credit crisis increased costs and governmental changes currently in the works it’s still possible to fully finance your college education. It’s even still possible for you to do so at the college of your choice.
What can your family afford?
Before you start investigating your options given the current economic climate you should probably have a frank discussion with your family about money matters.
“The economy and your parents’ financial situation are both dynamic,” says Curt Eley, vice president for enrollment management at the University of Texas at Dallas. “You should have an ongoing dialogue with your parents about their expectations for college their ability to pay for college and their willingness to pay for college.”
Ann Walker, director of financial aid at Rice University agrees. “Even with our best efforts to create a package that is fair many families are still shocked at what the costs will be,” she says. “They need to start using financial aid estimators early on so they have a good idea [of] what their expected family contribution is.”
Talking to a financial aid professional may also help your family determine what it can or can’t afford. While “websites can be helpful to students in learning more about the financial aid and scholarship search process … a conversation with an experienced financial aid or admission professional can provide some quick insight,” says Bob Murray, dean of enrollment management at Illinois Wesleyan University.
The sooner you begin thinking about paying for college the easier it will be when the time comes to fill out an application for aid.
The basics
There are two different types of financial aid: merit-based and need-based.
Merit-Based Aid: Merit-based financial aid is what many people refer to as scholarships awarded to a student by either an individual college or outside organization without regard for financial need. Students typically receive merit-based scholarships for academic achievements though some can be awarded for special talents leadership skills or other personal characteristics. Athletic scholarships also fall under this category.
Need-Based Aid: Need-based financial aid is awarded to a student on the basis of financial need. The Free Application for Federal Student Aid (FAFSA) www.fafsa.ed.gov is generally used for determining federal state and institutional need-based aid eligibility. At private institutions a supplemental application may be necessary.
Use your merit
Before you delve into the world of need-based aid find out what merit can do for you since you don’t have to pay it back. Just as you should consult with your parents early in the process you should also start researching scholarship options during your junior year.
Merit-based scholarships usually require very high qualifications with regard to grades and test scores as well as excellent recommendations and extracurricular/community activities.
“Your biggest job during sophomore and junior year of high school is to prepare yourself academically for college by taking a rigorous college preparatory curriculum and performing well in those courses,” says Eley. This will increase your chances of getting merit based aid in college.
Colleges and universities typically list available merit scholarships for incoming freshmen on their websites. While an admission application will often enter you into the running for a school’s scholarships some colleges require a separate application. Be sure to find out what the requirements are at each school you apply to.
Another scholarship resource is your guidance counselors who will most likely have a list of local scholarships- you have a better chance of receiving a local less competitive scholarship award than a larger national one. Look into the merit scholarships offered by your community or state as well as those from local organizations such as clubs businesses churches synagogues and other associations.
Then move your search to the web. Many websites such as FastWeb’s “Find Scholarships” option (www. fastweb.com) and Scholarships.com’s “Search Scholarships” option (www.scholarships.com) can help you locate the types of scholarships you qualify for. While some scholarship requirements are super-specific (e.g. you must live on a farm in the South) others are open to all students.
A word of caution: As you search the web beware of scholarship scams. If a scholarship requires an application fee for instance don’t apply. Also make sure the scholarship information you find online is up-to-date and apply to as many scholarships as you qualify for-it can’t hurt and every little bit helps.
Applying is half the battle
While you’re applying for merit-based aid you should also fill out your FAFSA and submit it as early as possible.
“Too many families make assumptions about the availability of assistance for their children,” says Murray. “Each year we see families apply for assistance who never thought they would receive any … and who do qualify for [scholarships or grants] not just loans.”
Eley adds, “The greatest thing you can do to improve your chances of finding aid is to apply early with a complete application … submitted entirely correctly. Apply for financial aid well before each institution’s priority deadline.”
If you’re planning to attend college in the fall you should fill out the FAFSA in January. (It won’t be accepted before January 1 but get it in as soon as you can after the first.)
Loans grants and work-study
Along with your acceptance letter most schools will send you an “award package” or a list of the types of merit- and need-based aid you qualify for. The need-based aid you’re awarded will fall into one or more of the following three categories:
- Grants:Typically awarded on the basis of financial need grants do not require repayment.
- Federal Loans: Based on need federal loans are financial aid awards that require repayment. They offer the opportunity to defer the cost of your educational expenses by borrowing now and repaying later (after you graduate). Unlike private loans federal loans offer low-interest rates- your best option. Some of the more popular federal loans include Stafford Loans for students and PLUS Loans for parents of students.
- Work-Study: The Federal Work- Study program provides part-time employment to students to help with college expenses. Non-federal work-study on the other hand is not based on financial need. So if you don’t qualify for Federal Work-Study you should inquire about non-federal student employment opportunities at your school.
Unfortunately the FAFSA may reveal that you don’t qualify for as much federal financial aid as you actually need. Don’t despair! Private loans although not as ideal can help cover your expenses. While the poor economy has led to a decline in the number of private loan lenders there is still money available for those who need it. Check with the financial aid office at your school for more information about its private loan providers as well as providers’ terms and conditions.
Colleges want to help
Financial aid officers understand that times are tough and many schools are working hard to accommodate all financial situations.
“Because we are extremely cognizant of how the economy impacts college choices we have actually offered additional gift aid for 2009-2010 to help reduce the reliance on loans,” says Eric Nemoto, associate dean of enrollment management at Chaminade University. He says that merit aid for students with higher GPAs has also been increased.
Other colleges as well have either maintained or increased scholarship money. According to Eley at the University of Texas at Dallas the economy hasn’t affected the availability of scholarships or need-based grants funded by the university. Murray reports that Illinois Wesleyan increased its financial aid and scholarship budget more than in the previous year in order to “be prepared for the increase in the number of families that would apply and qualify for assistance.”
Colleges are also reaching out in other ways. “This year we offered several financial aid seminars for admitted students and parents [which] allowed us to meet with families individually to ensure all their questions were answered,” says Murray.
To make the process easier for students many colleges send out award letters as soon as possible or make the information available online. “Students’ awards are immediately posted to their web portals for their review as soon as we evaluate and package their aid,” says Nemoto “and through this web portal is where students can also apply for their Stafford (and parents their PLUS) Loans since we have our lenders’ sites linked.” Many colleges offer this online service to students and most college websites include links to their student loan lenders’ websites.
Is that their final offer?
Because the economy continues to fluctuate your financial situation may change. Before you assume the worst (that your dreams are dashed) consult with an aid representative at your college of choice.
According to Walker her office makes adjustments to the financial aid formula on a case-by-case basis (though most often these adjustments occur when a family has lost a job or income). John Nemetz, director of financial aid at the University of Arizona echoes this encouraging students to contact the financial aid office if their situation changes. “We are receptive to individual circumstances that do not get [considered] on the FAFSA,” he says.
Even if your financial situation hasn’t changed Eley advises, “Once each university offers you financial aid ask the university what forms of other financial aid options are available to you that they did not put in your financial aid award letter.”
A simple inquiry could make a big difference and hey it never hurts to ask.
Make sure it’s right for you
Money concerns aside choosing a college is an important decision-one that you should make by weighing many different factors.
“This is a big investment and one that should pay off for you for the rest of your life,” says Sandra Bartholomew, dean of enrollment management at Green Mountain College. “[F]ind the college that’s the best fit. Yes you may graduate with some loans but education loans are the best investment you can make.”
Despite the economy paying for college-even the college of your dreams-is entirely doable. Talk to your parents research your options understand what you’re getting yourself into and choose what’s best for you and your family.
Joan Mead is a freelance writer in St. Louis MO.
