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Published byAudrey McLean Modified over 9 years ago
An Overview of the Financial Aid Process Financing Your Childs College Education
The College Investment The responsibility for investing in college primarily rests with the family. However, colleges and universities assist by recognizing financial need and academic ability.
Just how much IS College? Direct Costs: Tuition, Room & Board, Fees – ASK what fees are included Indirect Costs: Books, Supplies, Personal, Transportation
What is Financial Aid? Gift Assistance –Grants – Need-based, are NOT repaid –Scholarships – Talent-based, are NOT repaid Academic, Athletic, Fine Art, Leadership, etc. Self-Help –Loans – MUST be repaid –Work Study – On-campus v. Off-campus jobs
Need Analysis Forms FAFSA - the Free Application for Federal Student Aid –Govt form used by 99% of colleges and universities –Determines eligibility for federal funds –Federal Methodology CSS Profile – the College Scholarship Service Profile –Private institutional form –Determines eligibility for funds from the schools endowment –Institutional Methodology (varies by the desirability of the student)
FAFSA (Free Application for Federal Student Aid) File after January 1 of students senior year Determines EFC (Expected Family Contribution) Resources available to the family –Standard allowance for living expenses, based on number of individuals living in household = Discretionary Income, of which a portion will be expected to be contributed towards college expenses EFC is the minimum you will be expected to contribute. EFC remains the same regardless of the college. The difference is the List Price of the institution.
Resources Available to Family Family Income Family Size Age of Parents Assets that generate income Students Income (Earnings - $2200 = x x/2 = contribution) Students Assets (35% of whats in childs SSN) # of family members enrolled in college (not parents) Other circumstances – medical, grandparent support, etc.
Beginning the Financial Aid Process Do a dry run NOW - get an idea of what your estimated need will be next year in order to prepare in advance. www.finaid.org/calculators www.collegeboard.orgwww.finaid.org/calculators www.collegeboard.org Your Financial Planner
Colleges should to the extent possible, within the institutions capabilities, meet the full need of accepted students. However, they often face a difficult balance between meeting the needs of the students and the demands of the administration.
How the EFC is Used Cost of Attendance$12,000 - EFC$ 5,000 ----------------------------------- Financial Need$ 7,000 If only 80% of need is met, then there is $1400 in unmet need + the EFC = $6400 your cost ASK! What % of financial need do you meet?
Private School V. Public School Cost PrivatePublic $30,000 Cost$12,000 Cost- 10,000 EFC----------------- $20,000 Fin Aid Eligibility$ 2,000 Fin Aid Eligibility $ 2,500 loan$ 2,500 loan + $17,500 grants & scholarships (not repaid)
Example of How EFC is Used Family Income:$100,000 # in Family:4 # in College:1 EFC:$ 20,000 Cost: $13,000 $24,000$32,000 - EFC: 20,000 20,000 20,000 ----------- ---------------------- Need: $ 0 $ 4,000$12,000
Breakdown of how need is met: Loan: $ 0$ 2,500 $ 3,500 Job: 0 1,500 2,100 Grant: 0 0 6,400 ----------------------- ----------- Total: $ 0 $ 4,000 $12,000
2 in College!! EFC does NOT double Approximately 55% of EFC will be contributed towards each child EFC per child will differ based on their income
Timeline Junior Year: Start College Search! –Spring & Summer – MAKE COLLEGE VISITS!! Ask about institutional scholarships, FA policies, Early Estimators, etc. Research outside scholarship opportunities –Religious, Community, Foundations, Political, Cultural, etc. Senior Year: Narrow Down College Choices –Fall – APPLY!! Be aware of deadlines, particularly for Early Decision / Action Fill out Early Estimators and Scholarship forms –Winter – File the FAFSA and CSS Profile –Spring – Make final decision by May 1st
Words of Advice….. File the FAFSA and Profile on time. BE CAREFUL OF SCHOLARSHIP SCAMS!! Dont let the financial aid package be the sole determinant in your students final decision. Compared to public institutions, private colleges typically offer more scholarship money. Assume one thing…. College costs will continue to rise every year.
Good Luck!! And check out these FREE scholarship search websites: www.fastweb.com www.isac-online.org Special thanks to the Office of Financial Assistance at Bradley University.
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