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Applying for aid doesn't have to be complicated - just make sure you cover each step to avoid surprises later.
Module Transcript
The aid process can seem overwhelming at times, but there are only three major steps.
Step 1
The first and most important step is to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is an online form that every student seeking aid must complete. The form determines your official Estimated Family Contribution to the cost of college - the amount you will be expected to pay from savings and/or income. This application is used by all schools and state agencies to award funds, and not just Federal funds.
On the FAFSA you specify which schools you are considering so the school gets your information. Despite what you may have heard, the application does not take hours to complete. In fact, many students report being able to finish the whole thing in 20 to 30 minutes. If your family has complex financial holdings then yes, it will take longer. But even so, if you and your family have the financial information available, it's just a matter of filling in the answers.
The application asks demographic information about you and your family, about income for the previous year, and about the assets you and your family have at the time of application. For many people, most of the questions are not relevant, so don't believe all the hype that it's difficult or complex to apply for aid. It really is quite simple for most families. Be sure to check on school- or state agency-imposed deadlines for priority. Most schools and states require the FAFSA to be completed in the winter prior to the fall school year, and some deadlines are as early as mid-February (although most are later). The FAFSA cannot be completed until after January 1 of the year preceding enrollment in the fall and as we just pointed out, some deadlines come soon after that. But you do not have to rush out and complete it January 2. There is no benefit to doing that. In fact, it's advisable to wait until early February so you have all the financial information from the preceding year. That way you won't need to rely on estimates.
If you need help, the FAFSA website offers help via online chat, phone, and email. Your school's financial aid office may also be able to help. If you are confused or unsure about the FAFSA, we urge you to seek help - mistakes will delay the aid process or even cause you to receive the wrong amount of aid.
Experience tells us that there are a few concerns students and families have regarding completion of the FAFSA. First there is what some call "forms anxiety." That's the idea that looking at the whole application appears overwhelming. But since almost everyone now completes the FAFSA online, and questions are presented one at a time not all at once, this should not be an issue. The second issue is the fear that you are doing it wrong which will hurt you. True, how you answer questions determines your eligibility so answering incorrectly may end up costing you. But you will have ample opportunity to correct wrong answers. You needn't fear that you're doing it wrong. And the application nowadays gets much of the data directly from the Internal Revenue Service (IRS). So assuming you and/or your parents have filed or will file a tax return, your application will be completed accurately. Also, about a third of applications are "verified" by schools so if the school sees a discrepancy between your application and the tax return, they will work with you to correct it.
Step 2
The second step is to check to see if the school you will be attending requires an additional application. Hundreds of schools require students to complete the CSS PROFILE, for example, an online application that is more extensive than the FAFSA. Here is a link to the list of schools that require the form.
The CSS PROFILE application will take a bit longer than the FAFSA because it asks more financial questions. But it too is easy to complete and you should not be worried about it. On the CSS PROFILE you specify which schools you want to get the data and there is a small charge for this application.
Step 3
Finally, once the schools (and/or state agency) receive the data from the forms, they will issue an award based on your Expected Family Contribution (EFC) and cost of attendance. Usually you are awarded a combination of aid types, hence the term "financial aid package." In some instances your entire financial need may be met with this package. In many schools that is not possible, so you or your family have to come up with additional funds to meet the gap. This money could come from savings, additional student loans, working while in school, an outside scholarship, or a combination of these. To minimize your need to raid your savings or take on greater debt, you should look for outside scholarships if possible. There are several free scholarship search services online. Keep in mind that you should never have to pay to apply for a scholarship. And no one can guarantee you will receive one so be sure to avoid any service that charges to apply or guarantees you will receive a scholarship.
I filed the FAFSA. What Next?
After submitting the FAFSA, you will receive your Student Aid Report by mail in a few weeks. At this point you will know your official Expected Family Contribution. The results will also be sent to the schools you listed on the FAFSA.
The first thing you should do when the Student Aid Report arrives is to check it for errors. If an error was made, it may be more difficult to qualify for aid. On the other hand, if the errors are in your favor, you could be penalized later for not correcting them.
Please keep in mind that schools have formulas for calculating financial aid that may yield different expected family contributions. Other schools may require additional documentation of income or assets.
Schools then create financial aid packages trying to fill your financial need from the various grants, scholarships, loan programs and work programs available. You then factor that into making your decision about which school to attend based on how much of your need is being met and how much of that aid is in the form of loans. While it sounds like a simple arithmetic decision, it's not as easy as it looks. Certainly you should look beyond how much grant or scholarship aid is being awarded to you. Comparing financial aid awards requires that you calculate how much of the cost will be from your family's pocket. Loans should be considered out-of-pocket since ultimately you will have to pay back that money with interest.
On the other hand, major decisions such as which college to attend should not be based strictly on how much or which type of financial aid you receive. That can be one factor, certainly. But if you're not very challenged at a school that gives you a little more grant aid than your first choice, was that be best decision? Only you and your family can say.
Your choice of college has a lifelong effect. Money, or rather, the lack of money is important factor when choosing a college. But money is not the only factor, especially if the difference in amount is relatively small.
On the other hand, if you have a high financial need and choose a college that requires you to borrow a great deal more than your second or third choice, you should consider the ramifications of having a large debt when you graduate. As a general rule of thumb, if your total education debt, including all loans and credit card debt, is more than your likely starting salary, you should probably consider a less expensive school.
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