Financial Aid 101

While it is generally considered the responsibility of the family to pay for college, most all students have need for assistance and will receive some type of financial aid upon acceptance to any college or university regardless of a family's economic standing.  The process may seem over-whelming and difficult but a few tips can help ease the tension of organizing documents, completing forms, waiting, choosing and responding.

Every student that wants financial aid must complete a Free Application for Federal Student Aid (FAFSA) online.  Some private or larger public schools may also require the CSS Profile form, which could include school-specific questions.  These applications help schools determine the amount of money that they feel the family can contribute toward costs.  This is called the Expected Family Contribution (EFC), but is not the actual figure to be paid.

Once the FAFSA/CSS Profile is processed, students will receive a confirmation that the information has been disseminated to each school listed on the forms.  Schools will then start to process applications once academic acceptance has been made.  Next, students receive correspondence notifying them of various awards.

There are several types of financial aid that can potentially appear on the Award Letter.  Gift aid includes grants and scholarships that are based on socio-economic status and do not have to be repaid.  Merit-based scholarships consider the student's resume and academic record and, generally, do not have to be repaid.  Federal loans are just that, but are often attractive to students and parents based on low interest rates and no credit checks.  Private loans may be offered but are not advised.

One tip is to request tax documents as soon after the New Year as possible.  They will be needed to accurately complete the applications.  If schools require them completed earlier, use the closest estimates possible and expect adjustments to the awards when the exact figures are used.

After students are notified of awards for each school, they can determine how what they are being offered in financial aid and what their family can actually contribute compares to the actual cost of attending each school.  This will allow each student and family to choose the best fit both academically and financially.

How to Avoid Student Debt

A recent article by CNBC shows that student debt is reaching unprecedented levels – almost 1 TRILLION dollars! During a recession, it can be hard for families to deal with the escalating cost of college for a student. How can you avoid your child coming out of college with a crushing student debt?

1) Start Early. Your child maybe a little one now, but college can come up faster than you think. Parents often say “Where has the time gone?” when they find themselves faced with a teenager on the way to college, so start saving early for your child’s education. Most states offer substantial tax rebate incentives for college planning funds.

2) Know the Financial Aid Process. There are millions of dollars available to support college dreams in the United States. Are you sure that your child has access to all of them? Work with a College Admission Consultant to understand the Financial Aid Process and meet all the requirements and deadlines to support your child’s college dream.

3) Apply for Scholarships and Grants.  Colleges invest heavily in attracting the best, not the most affluent, students to their institutions. Each achievement in a student’s high school career can be one more dollar towards college tuition or expenses, if you both apply for the right scholarships and grants, and support that application with stellar high school credentials.

College is expensive, but it doesn’t have to be crippling. Make sure you’re accessing the right resources and boosting your child’s college dream with the correct financial planning going into the college admissions process.

How to Avoid Financial Aid Scams

College is expensive, and becomes more so each year as the population of aspiring, high-achieving students graduating from high school grows. Its not surprising that a number of families rely on private, state or federal financial aid in order to achieve their college dreams.

In association with this, unfortunately, is a rise in financial aid scammers – individuals who prey on students and families overwhelmed by the costs and complexity of Financial Aid, and who frequently promise great results only to disappear with the wind.

Here are some tips to avoid Financial Aid scams:

1) If it sounds too good to be true.... A lot of financial aid scammers will guarantee results, regardless of the family’s financial situation or the student’s scholarship acumen. The simple fact is that most Financial Aid is awarded on based on those two factors, and guaranteeing funds blindly usually means that the provider is scamming you.

2) Being asked for banking information. Although college Financial Aid teams need to know your financial situation, they don’t need your specific banking details (account numbers, credit card numbers, etc) to qualify you. Being asked for this critical and confidential information is a red flag.

3) Being offered the “inside track”. Similar to the first point, if a financial aid advisor says that they have exclusive access to the Financial Aid department of a college, or they have information that only they can give you, you should be cautious. Financial Aid information is generally very publically and prominently made available by institutions. Although advisors and consultants may have good relationships with Financial Aid departments, that doesn’t imply that they have exclusive access to any financial opportunities.

4) Check third party credentials. If the advisor or consultant does not offer any credible associations with certifying organizations, be warned. The best Financial Aid consultants are active members of associations that have strict guidelines for their members, including the Higher Education Consultants Association and the Independent Educational Consultants Association

The Financial Aid process for college admissions can be daunting, but it should always be transparent and, if laborious, at least risk-free for applicants. Having an experienced guide for the Financial Aid process can make the process easier and less stressful. Be sure to work with a consultant who has a proven track record and promises only what is ethical and reasonable to deliver –  experience, guidance, and hands-on advice to achieve your college dreams!

Financial Aid - Answers To Your Questions

Please join us for our “From High School To College Made Simple” Teleseminar Series on Tuesday, December 14, 2010 at 7:00 PM EST for “Financial Aid-Answers To Your Questions.”

With over 100 colleges in the United States now reporting annual costs of over $50,000 for the first year, it’s a very important topic to a lot of students and their families! You may be asking yourself if you can afford to send your child to a top college, or wondering if your savings will hold out past the first or second year.

This Teleseminar will focus on helping students and families understand the Financial Aid process. The topics covered are:

• How to qualify for financial aid, and how to define the Expected Family Contribution (EFC)
• Which forms are required by colleges to determine the EFC?
• Different types of financial aid and how you can avoid leaving free money on the table.
• The 3 biggest mistakes families make and how to avoid them.

All you need is a phone! Call in and listen to the call OR listen to the recordings at your convenience.
You can join monthly calls at anytime for just $29.95 a month.
To join, click here http://www.a2zcollegeplanning.com/basic-college-planning.html

As always, your  questions are welcome on this topic.  At the conclusion of the teleconference, we will answer pre-submitted questions.  Please send your questions to: info@a2zcollegeplanning.com.

Should You Plan to Work While In College?

To decide whether or not you should hold down a job while you're attending college (or, for that matter, in high school as you work towards getting into your dream college) you first need to budget your school year.

First, add up the total amount of money you have to work with – not just what you've got yourself, but what you can expect from your family, from education saving accounts, bursaries, grants, and student loans. Then add up your projected expenses – tuition, residence or rent, books, supplies, food, and don't forget transportation; flying home for Thanksgiving and Christmas can make a big dent. Then add twenty percent to all your living expenses. Budget for the unexpected!

If your expenses exceed your available money and loans, consider a job. While a job can distract you from your studies, being in financial trouble will distract you more. The last thing you need come spring and exam time is to have money problems on your mind.

If you want to hold down a job, ask three questions:

1. Is it compatible with my studies? The best jobs are those related to your field of study, even if the relationship's a distant one. Taking economics or business? Try to find temp work in a small or medium business. Taking drama? Work for a theater, even if it's the ticket booth. Planning on a career in medicine? Find work at the student clinic. No matter how modest the work, future employers and school evaluators will be impressed that you worked in your field.
2. What's the real wage? Holding down a job means added trouble and expenses. A three hour shift at $10 an hour is really $7.50 an hour if it takes you an hour to get to work and back, and if you're out transportation costs, it's lower still. On the other hand, if you work enough hours, you might qualify for benefits, and avoiding debt means you're saving interest. Add up all the benefits and drawbacks, not just the hourly wage.
3. Can I handle the workload? This you might not know until you get to college and start to juggle your time. If you're not sure how many hours your college of choice will ask of you, don't be afraid to call them up and ask. Department offices will be able to tell you what your course schedule will look like. Don't forget to add time for studying!

It might seem obvious that the decision to hold a job is the trade-off between money and time, but the key is to ensure that you have an accurate picture of exactly what the trade-offs are. Start your budget and planning now... and get your resume ready!