One of the major hurdles in the college application process is financial aid. With the cost of funding a college education high and getting higher, many families are understandably concerned about how to finance that expense for their children. However, do not eliminate a college strictly on cost alone until you have applied for assistance and been told how much financial aid you’ll be receiving. Your chance of receiving a grant, scholarship, or low-interest loan depends on a number of factors, chiefly: 1) your academic record; 2) the income of your household (generally, your chances are much improved if you come from a middle- to low-income family); and 3) how hard you’re looking. Most of the money that is available for higher education assistance is given out directly by the college.

The two most important documents for obtaining financial aid are the U.S. government’s Free Application for Federal Student Aid (FAFSA) and the College Scholarship Service’s Financial Aid PROFILE (CSS PROFILE) (for more information on these and other terms in financial aid, see below). All schools require the FAFSA because they use it to determine the distribution of federal funds. The PROFILE is required only by certain private universities looking for additional financial aid information in order to fairly distribute non-federal student aid funds.

FAFSA. The Free Application for Federal Student Aid is available online after January 1 of each year. The website for the FAFSA is www.fafsa.ed.gov. When you apply online, students and parents will need to sign up for a PIN number for the signature page beforehand. You can do this at www.pin.ed.gov. For help completing the form go to www.studentaid.ed.gov/completefafsa.

A few weeks after receiving the student’s application, the federal processing center will mail out a “Student Aid Report” (SAR) that will include: the student’s Expected Family Contribution (which is how much a student and her/his family will be expected to pay toward education costs). After students and parents verify that the information on the SAR is correct, it will be sent to the colleges and universities you designated on the application. There the financial aid officers will put together the student’s financial aid package, subtracting the EFC from the total cost of the institution to determine the family’s need.

Ideally, to ensure an accurate report on the FAFSA, parents and guardians would be able to complete their taxes early. If families have to estimate tax information, do so carefully. The federal processing center will often request a copy of your tax returns to verify application information. If your estimate is inaccurate, you may have to correct and re-submit your application, a time-consuming process. Try to submit the FAFSA as early as possible—government funds are distributed to students on a first-come, first-served basis.

CSS PROFILE. In addition to submitting the FAFSA, many private schools require the CSS Financial Aid PROFILE. This form’s purpose and structure are similar to the FAFSA. However, the PROFILE is administered by the financial aid division of the College Board and helps private schools in the distribution of non-federal student aid funds. The questions will differ from the FAFSA, and will vary from school to school. All seniors should read the financial aid section of their college applications to see if they will need to acquire a PROFILE application. Students and parents can register for the application on www.collegeboard.com.

TIPS ON APPLYING FOR FINANCIAL AID

Need-Based Financial Aid

In order to receive financial aid, you must apply each year that you are in college. If you don’t think you qualify, try anyway. You may have more options than you think. You will be ahead of the game if you collect your income tax information throughout the year so it can be compiled and ready right after January 1.

Step 1

Complete the FAFSA online at www.fafsa.ed.gov (this is your speediest alternative). The FAFSA will determine how much money you and your family must contribute each year for your education. Some schools require you to fill out their own application or the CSS PROFILE as well. Check with each school that you are considering to find out what they require.

Step 2

Check out as many sources as you can for scholarships. Check your colleges’ websites and the scholarships that come to the attention of the college counselor, listed on the Judge college counseling website or the Family Connection site. Register to receive notice of scholarships you might be eligible for on www.fastweb.com (.)

Step 3

Your FAFSA will be evaluated using a standard formula that takes into account you and your family’s income, assets, and other special circumstances. This need analysis will determine the amount you and your family will be expected to contribute for your education, which is called your Estimated Family Contribution (EFC). Your NEED is the difference between the cost of your education and your family’s contribution.

For example, say your Estimated Family Contribution (EFC) is $5,000. At a college with a total cost of $8,000, you’d be eligible for up to $3,000 in financial aid. At a college with a total cost of $25,000, you’d be eligible for up to $20,000 in aid. In other words, you’d be contributing the same amount at both colleges. Thus, it is a good idea not to eliminate any schools on your list based on cost without seeing the financial aid package you might receive from them.

Step 4

You will receive a Student Aid Report (SAR) that lists all the information you provided on the application. Be sure all information is correct; send corrections back to the processor.

Step 5

Your college or university’s financial aid office will receive the results of the FAFSA analysis. If you qualify for aid, you will receive an award package detailing the types and amounts of financial aid for which you are eligible.

When you receive your financial aid packages, consider your options carefully. The packages may meet all or part of the need as computed by the FAFSA and/or CSS PROFILE. While most colleges will try to meet a high percentage of your need, the packages from different schools may vary. When you have made your decision, reply to that school by their deadline. Don’t hesitate to call your colleges’ financial aid offices if you have questions.

Need-based aid packages may include a combination of three types of federally-funded financial aid:

Loans: These may be federal, state, or institutional, and interest rates are usually low. Repayment may not start until after graduation depending on whether it is a student loan or a parent loan.

Grants: These are usually gifts or aid in the form of tuition and/or fee reduction.

Work Study: The college will provide the student with a job on campus to earn money to help defray costs. These jobs usually pay better than minimum wage, have limitations on working hours, and require that the student apply and be accepted for a particular work-study placement.

Several pointers:

• If you are curious about your level of possible need, you can utilize an EFC estimator at www.finaid.org or www.collegeboard.com.

• Apply early. Most aid is awarded on a first-come, first-served basis.

• Keep a copy of every form you complete.

• If there is no way your taxes can be filed right after January 1, you are allowed to send an estimate as long as you can verify those figures, if asked, at a later date.

• Families who cannot qualify for financial aid based on the FAFSA usually get loans.

• Putting savings in your student’s name can affect need. If that is the case in your family, ask your college what happens after the money is spent.

• Judge Memorial offers a workshop on financial aid every December given by the Financial Aid Administrator from Westminster College. Watch the Bulldog News bulletins for dates and times.

Appeal Process

The appeal process is your opportunity to present additional information that may not have shown up in the FAFSA. For example, you may have experienced recent changes in your finances related to the economy. You must work with each college’s financial aid office individually if you are appealing your financial aid package.

Non-Need-Based Financial Aid/Merit Scholarships

Colleges typically list any merit scholarships they have available in the Financial Aid sections of their website. Some scholarships require separate applications and/or auditions. Others are given automatically as the admissions office is considering the application for admission. Checking the colleges’ Financial Aid sections should be an important step in the application process, and should be included on any organizational list of application deadlines and requirements.

Types of Financial Aid

PRIVATE SCHOLARSHIPS. There are still a number of private organizations (employers, American Legion, ethnic clubs, labor unions, associations or organizations connected to undergraduate majors, religious organizations, fraternal organizations like the Knights of Columbus, etc.) providing educational assistance. Discovering the private scholarships that apply to you involves intensive research. Students should peruse the list of scholarships on the Judge college counseling website and/or the Family Connection website, the Internet sites described in the List of Resources, as well as the impressive collection of scholarship reference materials at the public library. Be wary of scholarship scams. You should never have to pay for scholarship information; the best free resource that helps you identify which scholarships might apply to you is www.fastweb.com.

CAMPUS-BASED MERIT AWARDS. These awards are provided by the college itself on the basis of talent or excellence. The college admissions packets and websites provide information about merit awards and the necessary applications or auditions. Usually, if students meet certain academic or performance requirements, they are automatically entered into the school’s merit scholarship competition upon receipt of their application.

PART-TIME EMPLOYMENT. Many colleges have offices to assist students in finding employment on and off-campus.

GOVERNMENT AID PROGRAMS. Federal and state governments provide nearly two-thirds of all student aid for postsecondary education. However, not all colleges take part in the same type of federal aid; you will have to check the catalogues to find out which do. To become eligible for federal assistance, you must fill out the FAFSA (see above). For more detailed information on federal aid programs and eligibility requirements, see the Department of Education’s Student Guide to Financial Assistance, available in the Counseling Center next to the FAFSA forms.

The following are the most common types of state and federal aid. The definitions are taken from the Federal Student Aid department’s annual publication, Funding Your Education. The same information and further details can be found on their website at www.studentaid.ed.gov.

Pell Grant: Unlike a loan this does not have to be repaid. The award amount will depend on program funding; the maximum grant for the 2003-2004 year was $4050. These grants are mainly given to those with low EFCs (Expected Family Contribution), which translates to high need.

Federal Supplemental Educational Opportunity Grants (FSEOGs): These grants are for undergraduates with exceptional financial need. Pell Grant recipients with the lowest EFCs will be the first to get FSEOGs, which don’t have to be paid back. The award amount varies between $100 and $4,000 a year, depending on when you apply, your financial need, and the funding at the school you’re attending.

Federal Work-Study: This federally-funded program provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay educational expenses. If you work on campus you’ll usually work for your school. If you work off campus, your employer will usually be a private nonprofit organization or a public agency and the work you perform there must be in the public interest. Your job might have to be relevant to your course of study, based on the agreements your college has with private for-profit employers for Federal Work-Study jobs. Your college will pay you directly for the work. The amount you earn can’t exceed your total FWS award.

Federal Perkins Loan: This is a low-interest (5%) loan for both undergraduate and graduate students with financial need. Your school is your lender, though the loan is made with government funds, and you must repay this loan to the college you’re attending. You can borrow up to $4000 for each year of undergraduate study, depending on when you apply, your financial need, and the funding level at the school. You don’t need to start paying it back until nine months after you graduate, leave school, or drop below half-time status. Under certain circumstances you can receive a deferment or forbearance on your loan. If you receive a deferment, no payments are required and interest does not accumulate. During a forbearance, your payments are postponed or reduced, and interest continues to accumulate, which you are responsible for paying eventually.

Subsidized Federal Stafford Loan: If your EFC shows you demonstrate financial need, you can borrow a “subsidized” loan to cover some or all of that need. The government pays the interest while you’re in school at least half time, for the first six months after you leave school, and during a period of deferment (but not during forbearance).

Unsubsidized Federal Stafford Loan: Students could get this kind of loan if they want to borrow money beyond their subsidized loan limit or if they don’t have any demonstrated need. For this loan type, you’re responsible for the interest from the time the loan is disbursed until it’s paid in full. You can pay the interest while you’re in school or you can allow the interest to accumulate and be added to the principal amount of your loan. You can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as the loans don’t exceed the annual loan limit.

How much can I borrow? If you’re a dependent undergraduate student (your parents claim you on their taxes), each year you can borrow up to the following amounts if your period of study is at least an academic year in length. $2625 if you’re a first-year student; $3500 for the second year of study; $5500 for the third and fourth years of study (each). This varies if you are an independent undergrad or if you’re a dependent whose parents applied for a PLUS loan. For more information, see the website at www.studentaid.ed.gov.

Guaranteed Student Loans (GSL): The funds come from a local bank, credit union, or some corporations, with the federal government insuring the loan. You can obtain a GSL from a participating lending institution. Check with one for terms and conditions of repayment.

Parent Loans for Undergraduate Students (PLUS): Parents who have an acceptable credit history can borrow a PLUS loan to pay the education expenses of a child who is a dependent student enrolled at least half time in an eligible program at an eligible school. Parents must complete a PLUS Loan application, either fort the Direct PLUS Loan or the FFEL PLUS Loan (different sources of money), available from your college’s financial aid office. Parents can borrow an amount equal to the student’s cost of attendance minus any other financial aid the student receives. For example, if your cost of attendance is $6000, and you receive $4000 in other financial aid, your parents may borrow up to $2000. The interest rate is variable (adjusted annually) but does not exceed 9 percent. For the 2003-2004 award year the interest rate for PLUS Loans in repayment was 4.22 percent. Your parents will be notified of interest rate changes throughout the life of their loan. Interest is charged on the loan from the date of the first disbursement until the loan is paid.

Hope Credit: This is a tax credit. The Hope Credit allows taxpayers to claim a maximum annual credit of $1500 per student (must be at least half-time) for tuition expenses paid on behalf of the taxpayer, the taxpayer’s spouse, or a dependent for the first two years of college; 100% of the first $1,000 of tuition, and 50% of the next $1,000. That $1,000 figure will be indexed for inflation.

Lifetime Learning Credit: This tax credit allows taxpayers to claim an annual credit equal to 20% of up to $10,000 in total tuition expenses. Unlike the Hope Credit, this is a “per taxpayer” maximum rather than a “per student” minimum. Also, part-timers are eligible, as are working adults taking classes to improve their job skills. There’s no limit to the number of years you may claim this credit.

Other Possibilities

Western Undergraduate Exchange (WUE): WUE is a program through which a student may enroll in designated two-year and four-year institutions and programs in participating states at a special, reduced tuition level. Tuition for WUE students is the regular in-state tuition plus 50 percent of that amount. In all programs, the cost to WUE students is substantially less than non-resident tuition. Check the website (www.wiche.edu, under Programs) for participating states and schools; some states that participate are Alaska, Arizona, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.

There are many restrictions and limitations in the WUE program. For example, some programs treat it as a scholarship and the requirements can be highly competitive. Most programs restrict the majors available for WUE students. Only incoming freshmen are eligible for WUE scholarships. Be sure to check the WUE requirements at each college to which you might apply.

Reserve Officers’ Training Corps (ROTC): These scholarships pay for part of the total cost of attending the schools that participate, though they restrict a student’s major and require four years of military service (as an officer) after graduation. They are highly competitive and students who are interested should begin preparing to apply by the end of their junior year or very early in the senior year. Students will take required military science courses in addition to their regular college courses. For further information, check the following websites:

Air Force ROTC: www.afrotc.com Navy ROTC: www.nrotc.com Army ROTC: www.armyrotc.com

If you are interested in attending a military academy, see “Military Options.”