Financial Aid
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With college admissions season coming to a close, I’m getting a lot of questions about financial aid from my students. Although the demographic of students I work with is not particularly needy, many families want to know where they stand and exactly what they are eligible to receive. College costs are higher than ever, and, with the exception of some stellar Ivy League colleges that can reduce or even alleviate tuition for most students, financial aid is hard to come by.

What follows are some tips and explanations from someone who ran the gamut of financial aid quite a few years ago for my students who have been asking.

There are a few different types of financial aid. This was the most confusing thing to me when I was applying, so let me break it down for y’all.

1. Loan
A student loan is granted by a government body or by a private financial institution (like Sallie Mae) to anyone who wants to apply (with a few conditions to be met, of course). A loan usually collects interest (although some loans are subsidized, and the interest is not billed until after a student graduates from college) and must be paid back in full within a specified length of time. Loans are the easiest type of aid to get, but the least beneficial, as they are the only type that must be repaid. In fact, I and the majority of my classmates are still paying off our debt! The most popular type of federal student loan is called a Stafford Loan.

2. Grant
An educational grant is free money (woohoo!), usually provided on the basis of financial need. Grants can come from the government, from private institutions and, sometimes, colleges themselves. The majority of my own funding came through a need-based grant from USC, a college with a generous reputation for student aid. The most popular type of federal grant is called a Pell Grant.

3. Scholarship
A scholarship is usually awarded on a merit basis by a campus organization or a private donor/company. Scholarships, like grants, do not need to be paid back. Scholarships usually have very specific criteria. For example, the person donating the money might only want to fund the education of a first-generation, female student with aspirations to become an engineer. Sometimes, a student has to maintain certain conditions to renew his or her funding for each academic year, like a 3.0 GPA or a full course load.

4. Work-Study
For very ambitious students, work-study is a great option. Students are provided a job on campus to help fund various expenses, such as books or housing. Students enrolled in work-study are more likely to get an on-campus job than those who are not, as work-study is federally subsidized and the university will only have to pay a small percentage of their wage.

Now that you know the different types of funding available, you might ask what you need to do to apply! Please see my post, Financial Aid Part Two, for more information.
Alrighty then, folks. So now that you know a little bit about the different types of financial aid that are available to you as college students, here is some specific information about how to apply.

Step One: FAFSA
Everyone has heard of FAFSA. That’s because every college requires you to go through FAFSA if you want financial aid. Some of you might be saying FASFA by mistake, so stop it. It bothers me. FAFSA stands for Free Application for Federal Student Aid. Federal means it comes from the government and, therefore, the information you enter must be completely accurate. The application for 2013-2014 is now available, along with a handy dandy worksheet that explains every document and piece of information you’ll need to fill out the form.

One of the main components of FAFSA is your parents’ tax information. Taxes aren’t due until April, so your parents might not be planning to complete their forms in time for you to submit FAFSA by your college’s deadline (usually in February). Yell at them! Make them finish by February, and make them get used to it, because they’re gonna have to fill one of these babies out every year until you graduate!

Many people don’t really understand what FAFSA provides. FAFSA in itself will not award you any money. What it will do is disperse your EFC to all of your chosen colleges. “What the heck is EFC?” you might be asking. EFC stands for Estimated Family Contribution. The EFC is how much your family should be able to contribute to your college expenses based on their income and assets. Colleges will subtract this number from the cost of attending and, voila! they know how much more money you’re going to need in order to enroll at their fine institution.
When a college sends you your acceptance letter, you will also receive a proposed financial aid package. This package could include loans, grants, scholarships, and/or work study. You can choose to take the package, request changes to the package, or reject the package entirely. Boom, financial aided.

Step Two: CSS Profile
The CSS Profile is a glorified, expensive version of the FAFSA that is run through CollegeBoard, the lovely people who brought you the SAT and the AP tests (be sure to thank them). Many private colleges require the submission of the CSS profile in addition to the FAFSA. The information needed is very similar. The FAFSA only makes you eligible for government funding; the CSS Profile will make you eligible for scholarships and awards from private donors and programs. CSS is usually due in February.

In addition to FAFSA and CSS, you’ll have to complete each university’s financial aid application. DON”T FORGET THIS CRUCIAL STEP. These applications are generally straightforward, and if you marked “YES” on the Common Application when asked whether or not you planned to apply for financial aid, then you should have received the information on applying via email.

The UCs, which are very popular colleges among ThinkTank Learning students, have a section on their application where you simply check some boxes and are immediately in the running for what limited scholarships our state’s public university system can offer. The CSU campuses offer a program called EOP (Educational Opportunity Program) for disadvantaged students. Cal Grant, which depends only on your GPA, is a must for California residents. Counselors often apply for Cal Grant on your behalf, but you might want to check in with your high school for their policy.

As you’re considering your best options in terms of $$$, keep in mind that out-of-state public schools are not going to offer much financial aid; they are, however, more likely to admit you because you will end up paying the full tuition amount. It’s a vicious cycle.

Luckily, there are some awesome programs like ScholarMatch that connect people willing to give to students in need of some help to reach their dreams. At scholarships.com and other similar if not less reputable search engines like fastweb.com, you’ll find a database of scholarships that you can search based on your location, need, or special characteristics. There are also large nonprofits, like the Bill and Melinda Gates Foundation, that are very generous when it comes to college funding.

In any case, the families that get jilted in the financial aid process are usually middle-class, making too much money to be eligible for need-based aid, but too little to fully finance their child’s education (especially families with multiple children). If this is you, two years at a community college isn’t a bad option! My fellow consultant, Maria Anceney, did just that, saving a ton of cash and ending up with a degree from the prestigious UC Berkeley with hardly any debt to speak of. Right, Maria?

Anyway, this concludes my advice about financial aid. Good luck, and keep sending out good vibes to the college admissions folks!