Monday, January 24, 2011

4 Misconceptions About College Financial Aid

The exterior main entrance of Old Scona Academ...Image via Wikipedia
It's that time of year again when dreaded FASFA forms have to be filled out. The form that strikes fear in first year college students parents. FASFA is the Free Application for Federal Student Aid. It's a form that must be filled out so your student can apply for financial aid. It's quite a large multi page form that can be filled out online. We have 3 college students in the house so 3 forms must be filled out. 

At first it was a scary proposition to to enter your data concerning income, savings, and a variety of information at first. But we got through it and are receiving a helpful amount of money to help pay for college, now. We couldn't put 3 through college without it. This aid consists of grants paid to the school directly. It is not a loan, its a flat out grant. which is good because there will be no debt after graduation.

A lot of parents have mistaken preconceived notions about this process. Some of the misconceptions are:

1. I make too much money to qualify for financial aid. You shouldn't automatically assume that you won't qualify for need-based assistance. How much income you earn is only one part of the equation. What also matters is the price of a particular college. For example, some families that don't qualify for aid at moderately priced state schools may be in line for considerable help at pricey universities.

You can obtain an early assessment of whether your family might qualify for aid by using a free financial aid calculator. A calculator will produce an estimated Expected Family Contribution, which is what colleges would expect you to pay, at a minimum, for one year of school.

2. My home equity will kill my chances for aid. Most colleges won't care if you own a house and won't count home equity against you if you do. That's because the majority of schools rely on the federal aid application, the Free Application for Federal Student Aid (FAFSA), which doesn't ask parents if they own a home.

3. I have saved to much in my child's college fund. In reality, less than 4% of families are penalized for their savings. Even if you have state pre-paid college plans you don't have to worry because they won't be held against you.

 4. Don't think filling out financial forms are a waste of time or your odds of receiving aid is low. You will receive nothing if you don't apply. If you try you may be pleasantly surprised.

The FAFSA will be available beginning Jan. 1 for the 2011-2012 school year. The application should not take long if you gather the necessary documents before you begin. You can find out what information you'll need to complete the FAFSA by checking out the FAFSA on the Web Worksheet.

Also, the FAFSA on the Web Application has undergone dramatic changes for 2011-12, so be prepared for a new look. The changes are positive and the FAFSA Worksheet for 2011-12 can be accessed by using the "Browse Help" button in the header area of the FAFSA.gov website.

You can find College Cost calculators at the College Board and at TuitionCoach



Other posts related to College Finance:

Here are few videos to check out from US News & World Reports





6 comments:

  1. I hate these forms, but you have to fill them out to even get a student loan, if I am not mistaken.

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  2. They say the FASFA will be getting a makeover to reduce its length. But when does the government ever make things easier?

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  3. Wow, Dave, 3 in college? Ouch. I just wrote out the last check for my daughter's last semester in college. That's two down and two to go. My older two were lucky, they went to state schools, less than 2 hours away. We were able to pay monthly out of pocket for both of them. However, my younger two are a year a part, and I'm getting a bit nervous about footing this bill. I am reading a great book by Zac Bissonnette, called Debt-Free U. My younger two may be going local at least for the first two years.

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  4. Sharon, the Zac Bissonnette book is great. It puts a lot of the financial burden on the student. I'm not complaining. Our kids college money comes from grants, prepaid college and some out of pocket. The one kid that goes away to college works all summer and vacations to pay for his apartment at school. Renting books helps a lot, too.

    If it wasn't for the prepaid college and grants we would be up the creek.

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  5. Really helpful tips! Many families believe that a financial aid award letter from a college is their final offer. In reality, this may be their first in a series of offers. Most award letters are used to show how the college will meet the expected cost of attendance for the college in question.

    ReplyDelete
  6. @Samantha, Thanks for the comment. I have 3 in college now. So with the FASFA's its a busy time. The first time you apply it's a little overwhelming. But with time it gets easier.

    ReplyDelete

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