Paying For College: Getting Started

Alabama School of Fine Arts

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Financial Aid Myths

Financial Aid isn’t available Aid is only available at certain colleges Aid is only for the best students Our income is too high to qualify We should pick the school that offers the

most aid Financial aid is the only source of money

available Financial aid will only cover tuition costs Costs are the best way to compare colleges

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Who Pays for College?

Student Aid39%

Family Resources

61%

From: “Don’t Miss Out: The Ambitious Student’s Guide To Financial Aid”

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Undergraduate Student Aid (in Billions) by Source, 2006-07

Source: Trends in Student Aid, 2007

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Two Major Types of Aid

Merit Based on talent

or other special qualities

Need-Based Must show

eligibility through pre-determined formula

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Sources of Aid

Gift “Free money”

(grants or scholarships) – Do not need to

be paid back

Self-Help You earn it

(work)

or You pay it back

(loans)

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To the extent they are able, parents have primary responsibility to pay for their dependent children’s education

Students have a responsibility to contribute to their educational costs

Families should be evaluated in their present financial condition

A family’s ability to pay for educational costs must be evaluated in an equitable and consistent manner, recognizing that special circumstances can and do affect its ability to pay

Principles of Need Analysis

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Free Application for Federal Student Aid (FAFSA)

Family’s personal and financial information required to perform need analysis is collected on FAFSA

www.fafsa.ed.gov

Completed after January 1 during senior year

Typical deadline is Feb. 1 –March 1

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CSS PROFILE

Like the FAFSA on steroids Requires a nonrefundable registration

fee of $9, plus $16 for each college or scholarship program to which you want information sent.

Limited number of fee waivers are granted to first-time applicants based on the financial information provided on the PROFILE

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How Financial Need is DeterminedCost of Attendance

- Expected Family Contribution= Financial Need

Tuition and Fees

Books and Supplies

Room and Board

Transportation+ Miscellaneous Expenses

= Cost of Attendance

Expected

Family Contribution

Parent’s Contribution from Income

Parent’s Contribution from Assets

Student’s Contribution from Income

Student’s Contribution from Assets

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Need Varies Based on Cost

X

Y

Z

Cost of Expected Family NeedAttendance Contribution (Va ria b le ) (Va ria b le ) (Co ns ta n t)

1

2

3

EFC EFC

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Sources of Gift Aid

Institutional – Majority of financial aid

awarded through the college

– Could be need or merit based

– Many types, varieties, and amounts

– Pay close attention to application procedures/deadlines

– Understand terms/conditions of award and renewal

Private

– Affiliations• Churches• Civic

Organizations• Unions• Ancestry• Employers

– Special Interests• Corporations• Foundations

– Local Scholarships

– Military

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Where to Look for Scholarships

You and your family’s employers, place of worship, civic clubs, etc.

ASFA Scholarship Opportunities list Linked off Naviance and Sharepoint Local, state and national

Guidance Office at the high school you are zoned for Local scholarships not likely to be sent to ASFA

Collegenet.com/mach25 MeritAid.com

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Case Studies: Nikki @ U. Penn

Educational Expense Budget $49,080

Less family contribution 11,480

FINANCIAL NEED $37,600

Penn Grant $28,300

Federal Work 2,650

Federal Stafford Loan 3,500

Federal Perkins Loan 3,150

TOTAL AID PACKAGE $37,600

Family of 4 makes $78,000 and owns $107,000 home with $10,000 savings. N has $2,500 savings in her name. EFC of $11,480.

Financial Aid Package

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Case Studies: Nikki @ UA

Educational Expense Budget $14,000

Less family contribution 11,986

FINANCIAL NEED $2,015

UA Merit Scholarship $1,500

Federal Stafford Loan 2,650

Part-time job 3,500

TOTAL AID PACKAGE $4,150

Family of 4 makes $78,000 and owns $107,000 home with $10,000 savings. N has $2,500 savings in her name. EFC of $11,986.

Financial Aid Package

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Case Studies: Darius @ U Penn

Educational Expense Budget $49,080

Less family contribution 600

FINANCIAL NEED $48,480

Penn Grant $46,130

Federal Work 2,350

TOTAL AID PACKAGE $48,480

Father deceased. Family of 4 makes $37,400 with minimal savings. EFC of $0. Penn expects mother to contribute $300 in savings and D. to save $300 from summer job.

Financial Aid Package

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Case Studies: Darius @ UAB

Educational Expense Budget $14,000

Less family contribution 1,958

FINANCIAL NEED $12,042

Father deceased. Family of 4 makes $37,400 with minimal savings. EFC of $1,958.

Financial Aid PackageUAB Merit Scholarship $4,000

Federal Work 2,650

Federal Stafford Loan 3,500

Pell Grant 2,360

TOTAL AID PACKAGE $12,510

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Scams If it sounds too good to be true… Signs something is fishy:

You’re a winner! (of something you never applied for)

For a small fee, we’ll send you a list of scholarships.

We’ll do the work for you Guaranteed results or very high success rates We need a bank account or credit card number

to verify your information. High pressure of any sort

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Information Sources FinAid.org

• Comprehensive financial aid information• Free scholarship search• Various calculators, including need analysis

College Gold by Mark Katrowicz Don’t Miss Out: The Ambitious Student’s Guide to

Financial Aid. Octameron Press The Scholarship Book: The Complete Guide to

Private-Sector Scholarships, Grants and Loans for Undergraduates. Daniel Cassidy, National Scholarship Research Service

Payscale.com/college-education-value College ranking based on graduates’ long-term earnings