Tuesday, October 6, 2015

Financial Aid FAQs, Updates, and Need-To-Know Info!

Mrs. Mullen and Ms. Lovelace recently attended a College Board workshop and, in that workshop, was given some information that may be helpful to students and parents needing information on financial aid. We know this is a lot of info, but it's all stuff you need to know or info that can definitely help you. Let us know if you have any questions after reviewing it.


Financial Aid Universal Philosophy:

  • Students and their family(ies) have the primary responsibility to pay for college.
  • Sacrifice is assumed.
  • Financial aid assessment is NOT a cash flow analysis but rather an evaluation of an individual family's economic strength.
  • The contribution is determined by a standard formula that assesses a family's ability to pay.
  • Willingness to pay is NOT a factor.
Direct costs typically charged by the college includes: tuition and fees, cost of living on campus, cost of on-campus meal plans.
There are some indirect costs that may NOT be charged by the college, that you must also consider: allowances for books and supplies, allowances for personal expenses and off-campus meals, and allowances for transportation. 



Have you heard of the CSS/Financial Aid PROFILE? 
  • This is an application developed by the College Board, overseen by practicing financial aid officers, and used by over 260 colleges and 125 scholarship agencies to award non-federal aid. 
    • The FAFSA is a must to receive federal financial aid.
    • PROFILE is a plus and may be required to receive institutional financial aid at many colleges.
  • The 2016-17 application will be available October 2015.
  • Students with  College Board fee waivers (for the SAT) get access to a fee waiver for the PROFILE. 
  • Students will use their same login for the PROFILE as they did for the SAT


Financial Aid MYTHS (meaning not necessarily true):
  1. The published cost represents the true cost of a college or university.
    • The Larger Story: What really matters to the student is the amount the student will pay for college. This is called the "net price." Some colleges have Net Price Calculators on their websites.
  2. Students borrow over $100,000.
    • The Larger Story: Only 4% of individuals with outstanding student debt owe $100,000 or more, and most of these individuals have advanced degrees (Masters degrees or above.)
  3. Student debt is at a crisis level.
    • The Larger Story: More students are going to college and therefore, more students are borrowing money to go to college. 
  4. Only low-income families qualify for financial aid.
    • Truth: The EFC should be less than the cost of attendance for a student to qualify for need or merit-based aid. 
      • Once you complete your FAFSA, you will be given your EFC. Your EFC (Expected Family Contribution) is a quotient, not an actual number or amount of money. The quotient is used in a formula to determine need. 
      • Cost of attendance - EFC = Financial Need ... so it is not necessarily based on income
      • If a family has more than one members enrolled in college that year, their EFC would be divided by the number of college students, and that would be the EFC per student. 
  5. Saving for college hurts the chances of getting aid.
    • Truth: If you save, you won't need to borrow or borrow as much. The EFC includes only 5.64% of the net worth of assets (after allowances for retirement and emergencies are removed.) 
  6. The FAFSA is too complex and takes too long to complete.
    • Truth: For more first-time filers, the FAFSA takes less than 30 minutes to complete. Repeat filers spend less than 20 minutes completing their FAFSA.
  7. Students borrow more because college costs more.
    • Truth: College DOES cost more, but families are also less prepared to pay for college. Only 51% of college-bound families saved for college.
    • Truth: College costs increased due to the cost of labor and other expenses. The college has to pay highly educated individuals to teach and work at the school, and they also pay for expenses that are outside of the inflation rate, such as medical insurance, retirement, and utility bills. 
    • Truth: The length of time for students to graduate college is increasing. 40% of undergraduates graduate in 4 years. 58% of undergraduates graduate in 5 years. You now have to pay for an extra year of school and that prevents you from earning money for a year. -- This is why it is so important to know what you want to go to college for & to start and end at the right college for you!! 
  8. There is less aid available.
    • Truth: In 2013-14, over $184 billion was awarded in financial aid to undergraduates. Grants represented 57% of the total resources awarded to the student. Another 8% are given to the family in tax credits. 
  9. Loans are too hard to pay back.
    • Truth: Income contingent payment plans are available. PAYE (Pay As You Earn) only asks for payments of 10% of a borrower's net income. This allows borrowers to opt into other payment plans without a penalty.
  10. The return on a college degree is less because of the increase in the cost of an education.
    • Truth: The college degree is at its highest premium. College graduate salaries decreased by 5% during the Great Recession, while those without a degree had a 10-12% decline. The number of college graduates getting jobs remain steady throughout the Great Recession. Those without a degree experienced 8-10% unemployment. 
  11. Colleges will offer grants in the first years but only offer loans in the later years.
    • Truth: If the family's economy remains similar from year to year and the student makes satisfactory progress towards a degree, then the financial aid offered in the first year will be renewed annually.


NEEDING COLLEGE FINANCIAL AID 2016-17 SCHOOL YEAR (CURRENT SENIORS)??:
  • The FAFSA may be filed at any time during an academic year, but no earlier than January 1, 2016. Visit fafsa.gov to file. Reminder: NEVER pay to complete your FAFSA. It is FREE! 
  • There ARE changes coming to this for the FOLLOWING year, but we won't bombard you with that info just yet. 
  • While most colleges set FAFSA deadlines, do not forget to check for STATE filing deadlines. 
  • If you have ever completed a FAFSA, you know about PIN #s. NEW: There is no more PIN numbers to sign your FAFSA!!! Students will now create a FSA ID. Yes, parents will also create their own FSA ID. Both the student and at least one parent will use their individual FSA ID to electronically sign the student's FAFSA. 
  • Parents, file your federal tax return as soon as possible. Some school's offer their financial aid first come, first serve, and only offer financial aid to those with completed FAFSAs. 
  • It is best to wait approximately two weeks after filing your taxes to complete your FAFSA if you are using the Data Retrieval Tool (DRT). Please know if you do NOT use the DRT, your file is more likely to be audited. 
  • Notify the school if you end up having to file an extension. 
  • Use the Data Retrieval Tool (DRT) to update any estimates. 
  • Be aware of the school's deadlines. Better to provide estimated information than miss the deadline.

 Financial Aid Best Practices: 
  • Get your FSA ID as soon as possible.
  • Attend financial aid presentations as early as the freshman year in high school.
  • Always ask tough questions of all offices. Such as, "WHy does your college cost $___?"
  • Ask about medians. Averages are influenced by the outliers. 
  • Complete applications before the earliest deadline and know all the deadlines. 
  • Know requirements to complete awarding and dispersing. There's more to financial aid than getting the award letter!!
  • When in doubt, ask your school's financial aid officer.
  • Keep all tax records up to date. File as early as possible. 
  • When possible, use the Data Retrieval Tool (DRT). 
  • Review the Student Aid Report (SAR), which are your results after you file your FAFSA.
  • Compare your award letters!!! Make sure you are comparing apples to apples. Some award letters look like they're giving you more financial aid, but the total includes loans while some schools' letters do not.

 Top 5 Things Counselors Should Tell Students About Financial Aid:
  1. Never rule out a college because of cost alone.
  2. Compare costs before applying. Net price calculators can provide an estimate of financial aid eligibility and remaining college costs. Net price calculators should be available on every college's website. 
  3. Remember to apply. FAFSA deadlines are available online at fafsa.ed.gov/deadlines.htm. Many colleges also provide funds through an institutional application, the CSS/Financial Aid PROFILE, and/or a state application. 
  4. Get advice. The financial aid office at local colleges often provide workshops or can give advice.
  5. Compare awards. Look at grants, loans, and parental contributions before making a final decision on a college.

 Additional Financial Aid Tools & Resources:

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