• Sizable and unexpected medical bills
• Loss of employment
• Change in parental marital status

Note that special circumstances must be true hardships, not just overspending!  Buying a new, expensive car that depletes your savings, for example, isn’t a reason for a school to give you more financial aid.  Schools are not prone to bargaining for bargaining’s sake, but will exercise PJ if they are provided with a solid, non-emotional, and data-based appeal.  So, if your financial aid package falls short, be sure to contact the financial aid office at the college of your choice and see if they’ll review your personal circumstances more closely and exercise some professional judgement in your favor.
Andrea Aronson
College Admissions Advisor
Westfield, NJ

The post Financial Aid Primer: #10. When A Financial Aid Package Isn't Enough first appeared on College Admission Counseling.

• How much of the award is in grants versus loans?
• What is the ratio of grant aid to self-help aid?  Grant aid is aid that you do not have to repay.  Self-help aid would include loans, your expected family contribution from your own assets, and work-study.
• What are the terms of the loans in the package?  Are they subsidized (i.e. the government picks up interest payments until after you graduate)?  Unsubsidized? From private lending sources that are still to be determined by you?
• Has all your need been met or is there a gap?  If you have been “gapped,” how big is the unmet need?
• If your child has received a scholarship, is it just for one year, or is it renewable each year?

Like it or not, colleges will use their limited financial aid resources as a tool to entice those students that they want the most to enroll.  So, more “desirable” students will receive more favorable aid packages than other admitted students.  The “most wanted” students may have their full need met while others are gapped.  They also may have a better ratio of grants to loans to work-study with a much greater percentage of non-repayable grants in the mix than other students receiving aid.  That means that aid packages will vary tremendously from student to student just as they will from school to school.
One other important thing to know is that once any federal money is awarded in an aid package, the student cannot receive any more money beyond the calculated need.  So, for example, if your child receives outside scholarship money, and full need has been met by a financial aid award from a school, the amount of that outside scholarship will be deducted from the school’s original aid package.  The student is only allowed to receive enough aid to meet their calculated need irrespective of the sources of that aid.
Understanding what each financial aid award is offering can be a challenge, but it’s important to look closely and compare and contrast so that you can make the best possible decision when it comes to school choice and financing your child’s future.
Andrea Aronson
College Admissions Counselor
Westfield, NJ
 

The post Financial Aid Primer: #9. All Financial Aid Packages Are Not the Same first appeared on College Admission Counseling.

The post Financial Aid Primer: #8. Who Are The Parents? first appeared on College Admission Counseling.

• Adjusted gross income
• Income tax paid
• Exemptions
• Yearly earnings
• Money in Cash, Savings, Checking
• Value of investments
• Pension, IRA, etc. payments and deductions
• Child support paid or received

Although all of this data and more is requested, the formula that the FAFSA uses to calculate your EFC weighs earnings most heavily.  Why?  While the federal government wants you to sacrifice and pay your fair share to send your child to college, it doesn’t want you to go broke!  By weighing your recent income more heavily than your savings, investments or pension dollars, the government feels it is leaving you with a cushion for your future.
While some people may be tempted to manipulate their income so that the two years of information that they put into the FAFSA shows a much lower earning level than their true average earnings, be mindful that this kind of tactic often serves to little advantage. This move may provide a family with a lower EFC (Expected Family Contribution) for federal funds (money from the government), but it will generally not have much effect when applying for institutional funds (money allocated by the school) .  That is because institutional awards are often based on CSS PROFILE information, which is far more detailed and uses a different methodology.
Also, remember that federal grant aid is reserved for the most needy.  That means that even though the earnings that you note on the FAFSA may be low, if your other financial data does not show you to be particularly needy, your EFC may still turn out to be quite high (and thus your financial need low) making the machinations required to change your income level not worth the effort.
In the EFC calculation, student assets and earnings overall are weighted more heavily than those of the parents.  This fits with the idea that it is the student who is most directly benefiting from the college education, so it is the student who should provide the greatest relative contribution to fund it.
For more information about what information you’ll need to complete the FAFSA, visit www.fafsa.ed.gov to download a PDF of the FAFSA or get a list from the website’s Help section.
Andrea Aronson
College Admissions Consultant, Westfield, NJ

The post Financial Aid Primer: #7. Information Required For The FAFSA first appeared on College Admission Counseling.

The FAFSA

What will the FAFSA process look like? Remember that the FAFSA process determines your eligibility for federal financial aid, and in some cases institutional aid, too.

1. Gather Financial Aid Information About Schools of Interest:

No, later than the fall of your child’s senior year in high school, determine what the deadlines and relevant forms are for the schools to which your child will be applying. Some schools will require only the FAFSA, while others will also have you fill out PROFILE.  Still others will use their own proprietary forms in addition to the FAFSA. Financial aid application requirements can generally be found on schools’ websites. Be sure to check each school individually for its requirements.

2. Apply for a FAFSA PIN:

A PIN is required before you can submit the FAFSA. You can get this PIN by going to www.pin.ed.gov.

3. Fill Out and Submit the FAFSA:

This can be done either on-line or as a hard copy. To fill one out on-line go to: www.fafsa.gov. The FAFSA becomes available in January of your child’s senior year. Fill it out as soon as you possibly can and well in advance of schools’ deadlines.

In addition to some other basic information, the FAFSA will require you to supply the two most recent years of tax information. Since you will be filling it out in January (hopefully), this means that you will have to project your tax filing for the most recently concluded year.

If you visit www.fafsa4caster.ed.gov, you will be able to get an early estimate of your Expected Family Contribution based on the information that you will input into the FAFSA form. Note that this tool will not tell you with certainty what your EFC will be, but it can give you a good ballpark number.

4. Receive Your SAR:

Several days after you submit your FAFSA (if you are filing on-line), you will receive your Student Aid Report (SAR). In the SAR will be the government’s determination of your Expected Family Contribution (EFC). This is a very important number since it will determine your need and eligibility for aid.

CSS PROFILE

What will the PROFILE process look like? The PROFILE establishes whether a student qualifies for additional aid from a college itself that is above and beyond what the federal government will provide. The form is available on-line from The College Board. PROFILE asks for similar types of information as the FAFSA, however, in far greater detail. Schools that use PROFILE will calculate a new, and most likely different, EFC than what the federal government has calculated on the FAFSA. They will then use this new EFC to award their institutional aid. To submit a PROFILE, you can visit profileonline.collegeboard.com.

1. Establish if Schools of Interest Require the PROFILE and What Deadlines Are:

The PROFILE is used by only 10% of all colleges in the U.S., so investigate whether any of your child’s schools use this form.

2. Do the PROFILE Pre-Application Worksheet:

Because of the more complex nature of the PROFILE, The College Board provides you with a worksheet that can be printed from their website which enables you to gather and put down on paper all of your information prior to your attempting to put it into the actual PROFILE form.

3. Fill Out and Submit the PROFILE:

The PROFILE form generally becomes available in October of your child’s senior year. Note that this is several months earlier than the FAFSA. To submit a PROFILE, you can visit www.profileonline.collegeboard.com.

4. Receive Your PROFILE Acknowledgement:

Immediately after you have submitted your form, you will receive an acknowledgement which contains a list of the schools that will be getting the information as well as a summary of the information that you input into the form.

Be Aware!!! Schools deplete their financial aid over time!

• Be Precise: Fill out your financial aid forms as correctly as possible! Carefully review your SAR and your PROFILE acknowledgement for errors. Mistakes in your forms can delay the process significantly and make you lose out on financial aid dollars.

• Be Quick: Complete your financial aid forms as early as you can. Students who apply immediately have a better chance of getting aid.

Andrea Aronson
College Admissions Advisor, Westfield, NJ

The post Financial Aid Primer: #6. FAFSA and CSS Profile – The Basics first appeared on College Admission Counseling.

Financial aid packages are generally made up of:

• Grants and Scholarships: These are funds that can be awarded by the federal government, state, college, or private organizations. They do not require repayment and are sometimes referred to as “gift aid” or “free money”. Grants can be based either on need or merit.

• Loans: Parents and students can borrow money to help pay for college costs. Loans can originate from the government, the college, or from private lenders and must be repaid with interest. Terms of loans vary depending upon the type.  Although a loan may be an integral part of a financial aid package. The decision on whether to take out a loan or not is completely at the discretion of the student. The maximum amount that a student is permitted to borrow in federal funds is currently $5,500 per year. There are two types of federally-funded loans available to students:

• • Subsidized Loans: These are loans that the student does not need to begin to repay until 6 months after graduation. The federal government pays the interest on the loan until that time. These are only offered to students who have need.

• • Unsubsidized Loans: These loans are available to any student regardless of their level of need. The government doesn’t pay the interest while the student is in school. But the student does have the option of deferring the interest payments until graduation.

• Work–Study: In exchange for on-campus work, colleges and the government fund student employment. These programs are generally aimed at providing students with assistance that funds their college costs beyond tuition and fees.

Let’s dig a little further into federal need-based aid that I’ve noted above. As was mentioned in an earlier communication, when parents and students aren’t able to fund the cost of a college education, the federal government wants to help.  Following are some of the financial aid offerings the federal government provides. Note that each has its own set of eligibility requirements, which are not completely specified here.

Some of the financial aid offerings the federal government provides

Grants:

• Pell Grants: Depending upon the amount of need displayed by the family, a student can be awarded up to $5,500. Since this is a grant, the student does not need to repay the money. Pell grants are considered to be an entitlement, which means that if a student qualifies based on the criteria set by the government, the student will receive the money (i.e., the government can’t run out). That said, once the student’s Expected Family Contribution (EFC) exceeds $5,500, he or she becomes ineligible for any Pell Grant money.

• Supplemental Educational Opportunity Grants (SEOG): While the federal government funds these grants, colleges are responsible for awarding the money. These are need-based grants and currently range up to $4,000 per year. Because schools are provided with a finite amount of money each year for these grants. The pot can be depleted, and students who would otherwise qualify might not receive the funds if they apply too late.

• TEACH Grants: This grant is provided to students who commit to teach at the elementary level in underserved, low-income neighborhoods upon graduation. Grants range up to $4,000 per year.

Loans:

• Stafford Loans: These come both subsidized and unsubsidized depending upon the student’s level of need. Stafford Loan rates and terms are often the best compared to other student loan programs. The interest rates for the current 2011-2012 academic year are 3.4% for undergraduate subsidized loans and 6.80% for undergraduate unsubsidized loans. Note that interest rates do change from year to year.

• Plus Loans: These loans can be taken out by parents of eligible students to pay for college costs and are not need-based. There is no limit on the amount that can be borrowed up to the full cost of the college education less any financial aid.

• Perkins Loans: Although the federal government funds these, colleges and universities are responsible for allotting the limited pool of money. The Perkins Loan is awarded to students with exceptional financial need and is a subsidized loan that does not need to be repaid until the student is out of school. Students may be able to borrow up to $5,500 per year. There are no origination or default fees, and the current interest rate is 5%. There is a 10-year repayment period.   Because the money given to the school is limited, these funds can run out. This means that even if your student qualifies, if he or she is too late in the financial aid process, these loans may not be available.

Work-Study:

As noted above, students who have need may be enrolled in a work-study program. The government provides funds to the school to employ the student. Note that having work-study as part of the aid package is not a guarantee of employment, however, it does make the student eligible for selected on and off-campus jobs.

Institutional Funds:

Let’s touch briefly on institutional funds. In the last Financial Aid Primer blog post, I talked about students receiving merit money using institutional funds. In addition to merit scholarships, colleges and universities may also use their in-house funds to round out a student’s financial aid package with institutional grants.

Some schools use a form called PROFILE to further assess a student’s need level, and then determine whether or not institutional money will be provided. These institutional grants can be a significant source of additional financial aid when federal funds aren’t enough.

Ultimately, it all begins with the FAFSA. To receive any of these federal or need-based institutional dollars, you must first apply and have your Expected Family Contribution (EFC) and need established. No FAFSA, no funds.
In our next installment, we’ll delve much more deeply into FAFSA and PROFILE. Stay tuned!

Andrea Aronson
College Admissions Advisor, Westfield, NJ

The post Financial Aid Primer: #5. Different Kinds of Financial Aid Defined first appeared on College Admission Counseling.

In the previous financial aid post, we defined COA (Cost of Attendance). This is the dollar figure that college financial aid offices use to help calculate your need by figuring out the approximate cost to attend for a single school year (remember: COA-EFC=Need).

What do schools consider in this COA calculation?

• Tuition
• Room
• Board
• School Fees
• Books
• School Supplies
• Travel
• Personal Expenses

This list includes both direct costs and indirect costs.

Direct Costs:

Costs that the institution bills directly to families (e.g., tuition). These are sometimes called Billable Costs.

Indirect Costs:

Costs that the student will have while at college but that will not be paid directly to the institution (e.g., books, travel, personal expenses, etc.)

When you are calculating how expensive college may be for your child. You should include all of these direct and indirect costs, too, and potentially even more. Before your student applies to a school, it’s important to understand what your actual outlay is likely to be based on your own individual circumstances. Schools use an average number to figure costs like travel and personal expenses, but you should try to be more exact.

For example, if your student will be bringing a car to campus, the school will not put car-related expenses into their financial aid calculation, but you should put it into yours. Will your student be traveling to and from campus multiple times per semester? Figure the cost per trip and include the number of estimated trips in your cost calculation. In short, project how your student will be living while attending college and tally up all the costs associated with that lifestyle.

Where do you find information on school costs? Schools will generally provide tuition information on their websites, and many schools will include an estimated cost of attendance, too. Visit each school’s website that your child is interested in, and if the school provides an estimated COA, use it as a starting point to calculate your costs.

It’s no secret that college costs a lot. Yet, families still experience sticker shock when the reality of attending college and all of its related expenses hits. Know what to expect before your child goes. Set your budget, do your research on college costs, and estimate your child’s expenses based on his or her circumstances. Having this information will help you to make a more informed decision about which college to attend once the time comes to make that choice.

Andrea Aronson
College Admissions Counselor, Westfield, NJ

The post Financial Aid Primer: #3. The Real Cost of College first appeared on College Admission Counseling.

So, following is a brief “cheat sheet” with key acronyms along with their explanations.

FAFSA (Free Application for Federal Student Aid) 

As mentioned in the previous financial aid blog post, the FAFSA is the first step in applying for financial aid. The application requires basic financial information that helps college financial aid offices decide what your need is and how much federal aid you should receive. The on-line application can be found at www.fafsa.gov and becomes available on January 1^st of the year of matriculation.

FAFSA PIN

Before filling out your FAFSA application, the student and parent must first get a personal identification number (PIN). You can get this PIN by going to www.pin.ed.gov.

CSS PROFILE

A form required by selected colleges and universities which requests more detailed financial information to supplement the data provided on the FAFSA. While the FAFSA is used to determine the awarding of federal aid. The PROFILE is used to assess the allocation of institutional aid (funds from the school itself). The PROFILE is administered by The College Board, and can be accessed by going to www.profileonline.collegeboard.com. Note that not all schools ask for submission of the PROFILE. Many simply rely on the FAFSA for their information, and in some cases, schools will ask you to fill out their own proprietary form in place of the PROFILE.

SAR (Student Aid Report) 

All students who file a FAFSA will receive a SAR. The SAR reflects the information that the family provided on the FAFSA as well as what the government believes the family should provide to fund the student’s college education (EFC – see below).

ISIR (Institutional Student Information Record)

ISIRs are electronically transmitted to colleges and contain processed student information reported on the FAFSA. This is the equivalent of the SAR, but for colleges instead of students.

IDOC (Institutional Documentation Service)

IDOC is a service provided by The College Board that collects, scans, and bundles students’ financial aid supporting documentation and submits that information to participating colleges. Students will be notified by the institution to which they are applying if they should use the IDOC service.

EFC (Expected Family Contribution)

Using the financial information that is provided in the FAFSA by the family and employing a set federal methodology. The government determines the amount of money it feels the family can contribute to the student’s education. Based on this number, financial aid offices will then establish a student’s level of need and allocate (or not) additional federal funds to help pay for the student’s education. Institutions that use PROFILE, may determine a different EFC based on their own methodology for the awarding of institutional dollars.

COA or COE (Cost of Attendance or Cost of Education)

This is used by financial aid offices and represents the fully-loaded cost of attending college for one school year. It includes: tuition, room, board, books, supplies, travel, and personal expenses. The COA/COE is different at each institution and for each student, since individual student circumstances vary.

How do colleges establish the baseline for what your need is to attend their institution? Using the acronyms we just learned, it’s a very simple equation:

COA-EFC = NEED

Need-Based Aid:

This is aid awarded to students and families based on estimated need as established by information given either on the FAFSA or PROFILE.

Merit Aid

Colleges want to build their classes around certain types of students. Merit aid is awarded by colleges to students who they would like to have on campus because of their special abilities and characteristics. Colleges can decide to award merit aid for any number of reasons including academic, scholastic, and arts achievement. Some schools have clear guidelines about what it takes to earn a merit scholarships, but the awarding of merit aid is mostly unpredictable.

Gap

Not all schools are able to meet the full need of students as established by the FAFSA or PROFILE process. The “gap” is the amount of unmet need in the aid package between the Cost of Attendance and the Expected Family Contribution. If full need is met by a school, then the “gap” is zero.

NEED – AID PACKAGE = GAP

Professional Judgment

This refers to the authority of a school’s financial aid administrator to make adjustments to the data elements on the FAFSA and to override a student’s dependency status. The net affect of Professional Judgment may be an adjustment to the EFC which can ultimately alter the make-up of the financial aid award.

This list is a good start as we begin to dig a little further into the world of financial aid. Use it when you file for financial aid, and reference it as you read through future blog posts about financial aid.

Andrea Aronson
College Admissions Advisor, Westfield, NJ

The post Financial Aid Primer: #2. Financial Aid Acronyms and Terms first appeared on College Admission Counseling.

The post Financial Aid Primer: #1. Whose Responsibility Is It To Pay for College? first appeared on College Admission Counseling.