There can be a lot of confusion and misinformation about college financial aid. We gathered information from Sandra Moore, Independent Educational Consultant and the Affordability Subcommittee of the Independent Educational Consultants Association (IECA). Here are some questions and answers that may help clear up the confusion.
Question: We make too much money to qualify for need-based aid, so should we still fill out the FAFSA?
Answer: Yes, you don’t know how much you will or won’t qualify for unless you apply! You can get a good estimate of college costs specific to your financial situation by estimating your expected family contribution (EFC). You can search for a free online EFC calculator, such as this one provided by the College Board. The calculator might indicate that your family isn’t eligible for any or much federal financial aid, but you should still complete the FAFSA, because the university or college may be offering institutional aid. In addition, completing the FAFSA allows the student the option of taking out a federal direct loan – regardless of need.
Question: My son or daughter is probably going to receive an athletic scholarship. Do I still need to apply for financial aid?
Answer: According to the IECA, “only 2% of high school athletes play sports at the college level. If you’re not already familiar with ScholarshipStats.com, it’s a rich compendium of everything you might ever want to know about college athletics and scholarships.” It is a good idea for the student to also focus on getting strong grades and for families to understand other forms of financial aid to cover all their bases.
Question: Should my son or daughter focus on applying for “outside” scholarships? I’ve heard that thousands go unclaimed every year.
Answer: Families should understand that the majority of all merit aid is distributed directly by the colleges and universities themselves. These scholarships are generally given after completion of the FAFSA – no separate application required. There are online subscription databases, such as FastWeb.com and MeritAid.comthat list merit awards, but they are smaller (i.e. $100-500). Also, they often require an essay and an application, and are open to students worldwide - making the competition tough. Students are better off searching for local scholarships (through school counselors, parents’ employers, churches, or local organizations) for those outside scholarships.
Question: Should I really be saving for college when it just means my student will receive less financial aid?
Answer: Yes, you should still save for your student’s college education, if you plan to help them with education costs. According to Sandra Moore, “Students and their parents are primarily responsible for meeting college costs. That could mean that the less a family saves, the more they may have to borrow. Sure, need-based aid decisions do consider family assets, such as 529 plans, but parent assets are assessed at only about 5.6% of their value.” The application for financial aid (i.e. FAFSA) is more income-driven than asset-driven. And they also weigh other factors, such as the number of students in college at the same time and the age of the parents. Moore also explains, “FAFSA’s asset protection allowance, for example, can significantly reduce the percentage of a family’s savings that is actually assessed as a contribution toward educational expenses, especially in the case of near-retirement parents.”
Question: Do only top students receive merit scholarships?
Answer: Not necessarily. Many colleges and universities have policies of “tuition discounting” for students that are B+ or A- students that have demonstrated no financial need, but otherwise are solid applicants with potential to benefit the school. The schools often calls these discounts merit scholarships, and they help lure students to their institutions. Families should research the financial aid options at all the schools that their student may be interested in attending, as these scholarships might be a valuable option.
If you need assistance regarding financial aid or college selection, contact us at Christianson Tutorials. We have resources to help guide you and your students.