February 27, 2007

Our family makes too much money to qualify for financial aid…

Posted in FAFSA, The Financial Aid Process at 9:01 AM by Joe From Boston

Here is a great article from the Orange County Register about whether you should fill out financial aid forms if you think you make too much money.

Apply for aid, even if you think you make too much


Q. Our family makes too much money to qualify for financial aid. Do we need to fill out any financial aid forms?

A. Every family should complete (minimally) the FAFSA (Free Application for Federal Student Aid) form in January of the student’s high school senior year. Regardless of family income and assets, there are federal entitlement programs for every student, the most common being the Stafford loan.

Additionally, many colleges require the FAFSA form in order for the student to qualify for merit awards and scholarships. These can be offered as a result of academic, athletic, artistic or even leadership excellence.

Along with the FAFSA form, some colleges require the CSS/PROFILE form, and many private schools require their own aid forms.

By the way, many families assume they make too much money to qualify for financial aid, but there are many factors that determine eligibility. The way to accurately determine your eligibility is to learn your EFC (Expected Family Contribution).You should do this when your student is a high school sophomore or, at the latest, a junior.

Q. I am a divorced mother and my daughter is a junior in high school. She has a 3.86 GPA and 1900 SAT score, and she wants to attend a private college. My annual income is $50,000. I don’t own a home and we have little savings. Do we have any alternative other than junior college and then a state school?

A. Your daughter definitely should apply to private schools. For families like yours it often costs less money out of pocket to attend a very expensive ($40,000 to $50,000) private university than a public school costing much less.

Schools such as Pepperdine and Chapman typically offer families like yours a large amount of financial aid with most of it being grants (free money), often called gift aid. When you submit the FAFSA form to the Department of Education, officials calculate your Expected Family Contribution. This EFC is subtracted from the college’s cost of attendance and the difference is your “need.”

Many private colleges will meet most, if not every penny, of your need. If your annual income is about $50,000, your EFC could be less than $5,000. This means that for a $45,000 school, you are eligible for $40,000 of financial aid with the vast majority of this being offered in grants with a small portion being deferred-payment student loans and perhaps a work-study program.