07.27.06
You are not alone
I’ve noticed that while going through the financial aid process, many parents feel confused and isolated. They’re stuck with a lot of confusing paperwork, in the middle of a process they don’t really understand all that well.
I want to let you know, nothing could be farther from the truth. Most parents in this country are going through the exact same ordeal. Indeed, the same is happening in many other countries. I though you might be interested with this article about parents in the UK. I should note that today £1 (1 British pound) is worth about $1.70 US.
Back to more regular topics next week.
07.24.06
Grants
There was a question in our comments section today about Grants. I’d planned on talking about grants later on, but since it’s come up, I’ll address it now.
Grants are an award of money, normally from the government or a large philanthropic organization. Grant money is usually designated for certain subjects, for example the National Science Foundation offers grants to help fund important scientific research. You tend not to see many grants in undergraduate school, unless you are working on a research program through your school. Grants are much more prevalent in graduate and post-graduate school and research.
The question asked was “what is the maximum income a person can make before qualifying for a grant?”
Grants actually fall outside the focus of normal financial aid. You do not normally need to file a FAFSA to obtain a grant. Instead, each grant has its own specific qualification and application process that you must follow. You will often have to fill out the Standard Form 424 to get U.S. federal grant money if you reside in the U.S. This form, along with other documentation required by the individual grant, determine your eligibility, not your household income.
That being said, a specific grant may ask your household income to determine if you are eligible to meet the grants’ stated requirements. The only way you can determine what the maximum household income for a specific grant is, is by looking through the application information or contacting the grant-awarding company/group directly.
To search for available grants, you might want to check out Grants.gov – http://www.grants.gov/ You can search for U.S. federal grants with their easy-to-use search, and you can also browse by category.
If you have a question you’d like answered, don’t hesitate to ask. If I don’t know the answer, I’ll try and point you in the right direction so you can find the answer.
07.17.06
The FAFSA
FAFSA – the Free Application for Federal Student Aid is a bit of a beast, and is not well understood. Let’s take a brief look into the FAFSA and clear up some of the mystery.
Is the FAFSA required? YES! The FAFSA is what your school uses to determine what financial aid you are eligible through that school. It affects federal aid such as Stafford and Perkins, and scholarships and grants from your school.
The FAFSA is crucial to your financial aid package. You must get it in, and you want to get it in early. The earlier the better, actually, as much financial aid is first-come first-served. The FAFSA also must be accurate to the best of your knowledge. It’s like your taxes, an honest mistake is one thing, but deliberately hiding your assets is a big no-no.
There are a lot of confusing questions on the FAFSA. Here are a few small tips to keep things straight –
- When the FAFSA refers to “I”, “You”, “Your”, etc. it is referring to the student! (not the parent, family, or FAFSA preparer)
- Always double check even basic things like your address and ZIP code.
- Nothing will kill a FAFSA faster than errors or omissions! Check everything!
- Colors matter on the 2006-2007 FAFSA. Items pertaining to the student are in BLUE, while items pertaining to the parent(s) are in PURPLE.
- The blank space answer is your enemy. If you’re uncertain, put a 0 (zero) don’t leave it blank.
While the deadline for the FAFSA for the 2006-2007 school year has passed, visit the FAFSA Tutorial on FafsaOnline.com and prepare yourself for nex year’s onslaught.
07.12.06
Financial Aid 101
Let’s start this with a quick introduction to the world of Financial Aid.
The Financial Aid Process for any given year begins with the FAFSA. You need to submit it every year. The FAFSA is CRITICAL. You want to get this in as early as possible, because the school’s financial aid office uses the FAFSA to determine the EFC, or expected family contribution. This is the amount the family is expected to pay to cover the cost of attendance. The FAFSA will ultimately determine the need for assistance from the following types of federal student financial assistance: Federal Pell Grants, subsidized Stafford Loans (though the William D. Ford Federal Direct Loan [DL] Program or through the Federal Family Education Loan Program [FFEL]), and assistance from the “campus-based” programs—Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Perkins Loans, and Federal Work-Study (FWS).
So get that FAFSA in early! Why early? Schools have a limited amount of federal funding to allocate, and if you get yours in late, you might just get less of an award.
Next comes an award letter from the school to the student, offering a combination of loans, grants, scholarships and work study opportunities. If you are awarded a Stafford loan, you can now apply for it (yes it seems an odd order to do it in, but it’s run by the government, so we just nod and smile).
If you still need to find more funding, PLUS Loans and Alternative Loans are available. PLUS Loans are for parents or guardians to take out to fund their children’s higher education. They are not need-based, but credit based, so you’ll need to pass a credit check to get this type of loan. They have relatively low interest rates as they are federally guaranteed. Alternative student loans are not federally-backed, and so have a higher interest rate because of the risk. They are also credit-based.
And of course scholarships – apply early, apply often, apply even after you’re a freshman. I’m living proof that scholarships can change your life – financially at least. During my sophomore year I was awarded a full-ride scholarship for women in the sciences that allowed me to graduate debt free. It’s not impossible; it just takes a bit of effort.
So that’s a quick view of what you need to do as a parent, and what you need to get your children to do. (If they’re anything like I was, they’ll be lethargic and want you to do it all!)
In the next couple of posts, we’ll be taking a closer look at these steps so you’re comfortable with what’s coming up. And feel free to submit any questions you might have in the comments on this blog, and I’ll try to answer them for you.
07.11.06
Welcome!
Today I’m starting a new blog with the goal of helping parents understand the crazy world of Financial Aid. It’s a jungle out there, literally. As a recent graduate and someone who now works in the industry, I want to give you an insight into what goes on, what the process for Financial Aid is, where you can find help, and how to keep your sanity amidst all the paperwork that your child will probably hand off to you.
So stay tuned, learn a little and we’ll get you through it.
