10 college finance tips for 2018
Whether you're sending your child to college for the 1st time in fall 2019, or are in the thick of determining how to pay for the next year of education, or you're getting a head start on the 2018 academic year, some tweaks to the system could make college financing easier, although not necessarily more affordable.
College finance advisers say the biggest changes this year are related to the Free Application for Federal Student Aid, or FAFSA.
Here are 10 college finance tips for 2018.
Read more: Bank Rates info
CSS Profile: How to maximize financial aid
Prepping for college? In addition to filling out the Free Application for Federal Student Aid, or FAFSA, the form that qualifies students for federal grants, loans and work-study jobs, some students will also have to file the College Scholarship Service, or CSS, Profile. Used by nearly 300 institutions throughout the U.S., the CSS Profile is much more extensive than the FAFSA and can qualify students for enormous nonfederal financial aid packages funded by their college. Here's what you need to know.
Read more: CSS Profile
REMINDER FOR SENIORS:
Seniors, if you have not already done so, please complete your FAFSA and FFAA registration forms. These are two financial aid forms that must be done and done now. If you have already completed your FAFSA, are you sure that you have checked tour SAR (Student Aid Report) to make sure that there are no mistakes or requirements that you need to do. If you are not sure about your SAR, please feel free to come to my office and ask me to check your SAT. Remember that any mistakes not corrected or any requirements not completed will hold up you receiving your college Financial Aid Award Letter.
Understanding Financial Aid Packages
I may be a little early, but from my conversations with several colleges, some have noted to me that they will start releasing award letters to “accepted students” as early as January.
So in summary to date….
1. You have applied to college
2. You have done your FAFSA and your FFAA registration (PLEASE make sure that there are no errors or issues with your Student Aid Report - SAR.
3. You are now waiting to be accepted OR have already been accepted.
1. You need to wait to receive your college “Financial Aid Award Letter” (See some sample Award Letter below)
2. Please read the short article below to understand how you should evaluate the award letter that you receive and then make the final decision on which college you will attend.
By: Rachel Fishman is a policy analyst for the Education Policy Program at the New America Foundation. (with some editing)
After you’ve been accepted to a college and completed the financial aid application (FAFSA) process, that college will send you a financial aid package. So if you are accepted to three different colleges, and applied for financial aid at all of them, you will receive three separate financial aid packages. The question is, which one is best for you?
Each package will look different. Most financial aid packages will detail the Cost of Attendance for that college. After that they will detail how much they will offer you in Scholarship $ (performance = grades/test scores/athletics/ etc…) andFinancial Aid $ (income/need based = grants, loans and work-study).
Here are some tips that will help you understand your financial aid awards:
Find the Full Cost of Attendance for the School
The Cost of Attendance will vary depending on your situation but usually contains tuition and fees, room and board,books and supplies, transportation, and personal expenses. These are all budgetary estimates by the college of how much you will spend for your time in college that academic year. Depending on your needs, there are some cases where you may need more money and some cases where you may need less.
Add up All the Free Money (grants and scholarships)
Remember, grants and scholarships are gift aid that you don’t have to pay back, so first you’ll want to add that money up. For example, if you see the word Pell, then that’s a federal grant that the government gives you that you won’t have to pay back. If you are unsure whether something is a grant, scholarship or loan, call the financial aid office.
Subtract the Free Money from Your Cost of Attendance
Before you even look at your loan options, make sure you do this step! This will give you a rough idea of what you will need to pay for the academic year. You may have loans to help you cover those upfront costs, but remember you’ll have to pay back those loans eventually so it really is an expense.
HINT: Now is a good time to review your Cost of Attendance and try to come up with your own budget. For example, are you staying at home while going to college? If so, will you be in charge of paying for your expenses at home? If not, you may not need to borrow as much money.
Consider All the Self-Help Aid (loans and work-study)
Self-help aid includes loans and work-study. Loans will help pay for your tuition bill right away, whereas with work-study you’ll have to work in specific jobs during the school year to earn that money (learn more about different types of aid). The federal loans available may include the Perkins loan, Federal Unsubsidized Stafford, Federal Subsidized Stafford or Parent PLUS loans. Now that you have a better idea of your budget and how much you may still need to pay, you should be more aware of how much in loans you may need to take out.
IMPORTANT: The amount of loans on your financial aid award package is the full amount you are eligible for. You do not need to take out these loans in full. If you think you need less money, follow the directions on the package to decline the full amount and indicate the lower amount you need instead.
HINT: Not all federal loans are created equal. Some have more flexible terms than others. It’s recommended that you exhaust your loans in this order: Perkins, Stafford Subsidized, Stafford Unsubsidized. Only as a last resort should you consider a private loan or a federal Parent PLUS loan. These loans have less generous terms, and your parents will most likely have to undergo a credit check to take one out. Be sure to read more about federal loans at the Federal Student Aid’s website.
Understand What You Will Owe
You already know that you’ll have to pay back any loans. But make sure you understand your budget and whether you are completely covered for the year. Most colleges won’t be able to meet the full amount you need so be aware if you need to seek out any other financing options.
IMPORTANT: You and your family can seek other financing options like private loans and Parent PLUS loans. Call your financial aid office for more details. Just remember, you will have to pay back those loans, so make sure you are comfortable taking on that debt.
Remember, if you have any questions about your financial aid or if your financial situation has changed, it’s important to talk to someone in the financial aid office. The Consumer Financial Protection Bureau also has a financial aid award comparison tool available on its website here.
SAMPLE AWARD LETTERS
Information on College Preparation and the Federal Student Aid Programs
See tips on getting ready for college. Learn about the federal student aid programs as well as other sources of financial aid to help you pay for college or career school. Also, learn about the process for applying for and receiving financial aid.
Get detailed information and help on completing the FAFSA®.
Learn about federal student loans—what they are, how to get them, and why to get them. Understand your options for repaying a
federal student loan.
Consumer Protection and Financial Literacy
Read important information about protecting yourself from scams and getting the most from your money.