Financial Aid!

Applying to College
1

<p>I thought FA was determined nationally, meaning it doesn't matter which school one applies to, since it is federal-based, but this is obviously not the case. Can someone clear this up for me?</p>

<p>Also, certain schools (such as Cornell) have their own type of FA (or so I've been told). How does this differ?</p>

<p>Is there a trend in FA granted between public schools and private schools? Is one type typically "stingier"?</p>

<p>Also, my sister applied for FA from a public school but received nothing. Next year, she will have graduated and I will be starting my first year at college. I didn't apply for any FA, especially since my parents told me that I shouldn't, but now I feel like I might want to (for some odd reason, I just feel uneasy about paying $50K per year, even though most of my schools are priced in that area!) By the way, my parents are self-employed and work together at their own store, so evidently they avoid W2 forms and don't have to pay 'extra' taxes, and ultimately have a greater net income than someone who is not self-employed? Someone correct me if I'm wrong there.</p>

<p>Thanks!</p>

2

<p>Financial aid comes from the colleges, not the federal government. I think you are confused about the FAFSA being a federal form. It is a federal form and they calculate a EFC (estimated family contribution), but they don't provide the aid (except possibly for federal loans).</p>

<p>To summarize and somewhat simplify: Each college has a COA (Cost of attendance) that includes tuition, room & board, books, and misc expenses. You and your parents fill out the FAFSA and specify your parents income and assets, and your income and assets. Based upon this, the federal govt will use an established method to come up with your EFC (estimated family contribution). This is approximately the amount of money that the college will expect you to provide. However, each college is free to adjust or recalculate the amount in whatever manner that they want. In calculating the EFC, equity in a family home is not used to increase your assets. Consumer debt such as credit cards and car loans are not used to decrease your assets. Depending on whether the income/assets are in your parents names or your affects the EFC. Assets in your name are taken at a much higher percentage than assets in your parent's name. In addition to the FAFSA which is typically completed online, some of the elite colleges also want you to complete the CSS/Profile from the College Board. This has basically the same info as the FAFSA. You will also have to mail copies of your taxes to the college.</p>

<p>Every college, of course, knows their COA. Once they decide on your EFC, they calculate your NEED. Your NEED is the COA minus the EFC. They can do whatever they want here. They may or may not meet your NEED, but they will probably try. They will do so with a combination of grants (free money), loans, and jobs. The combination is important. If you have a $25K need, they may give you $20K in grants and $5K in loans, or they may give you $15K in grants and $10K in loans. You want the grants to be high and the loans to be small.</p>

<p>The system is set up so that the rich pay full price and the poor pay little. However, there is a problem with who they consider to be rich. A family with a combined income of $70K per year is going to get a decent package, but once the income goes towards $100K or $120K, the EFC gets large and the NEED gets small. Another problem is the even if the COA is $45K per year and you get a FA package of $30K per year, you still have to come up with $15K per year. This is a lot. However, it is possible for people to sometimes pay less to go to a $45K per year college than they would pay to go to the local state university. Your sister may not have gotten any money from the state university because the COA of the state university was too low. If your EFC is $20K and you apply to a college with a COA of $15K, you will not get any FA. However, if the same person applys to a college with a COA of $45K, then they have a NEED of $45K - $20K = $25K.</p>

<p>There are free EFC estimators available on the web. For example, there is one at the College Board site.</p>

<p>If there is any doubt about applying for financial aid, you should do so. Sometimes families decide that they are making too much money to qualify. This is, of course, possible; but the threshold for getting something may be lower than they think. Definitely try one of the EFC estimators.</p>

3

<p>Thank you very much for the comprehensive yet concise overview.</p>

<p>Is the federal form necessary to confirm numbers written on the FAFSA forms or is there another purpose for them? I'm under the impression that they are only good for calculating EFC (and fed. loans if necessary).</p>

<p>My sister's tuition (today) is about $17,000 but was slightly less when she first applied. Along with other expenses, I think the estimated cost of attendance is closer to $28,000. Now that I've seen these numbers, I think what you stated before holds true here: her tuition, while still substantial, is not back-breaking and very possible for my parents to pay.</p>

<p>Thank you very much for the excellent summary of the FA mumbo jumbo!</p>

<p>P.S.- Do students have to reapply for FA each year? I think I may have missed the deadline for a handful if not all my schools when it comes to FA materials, so can I apply for it in my 2nd year, or is it possible for me to apply earlier (perhaps the 2nd semester)? Thank you again!</p>

4

<p>This is personal opinion, but I think the govt does the FAFSA form basically as a service for the colleges. All of the financial information on the FAFSA basically comes from the IRS tax form which the govt is, of course, familiar with. Also, the govt does audit a certain number of the FAFSA applicants each year in order to keep everybody honest. Colleges typically also want to see copies of the IRS tax forms. It is hard to hide assets since everything shows up on the tax form somehow. If you have a savings acct, it goes on the tax form because of interest income.</p>

<p>Filling out the FAFSA is really your parent's job since it is their finances. They may be familiar with the whole FAFSA and EFC stuff because of your sister.</p>

<p>You do have to reapply each year. There is no guarantee that colleges maintain the same level of financial aid, but they do seem to. It probably isn't too late to apply yet. They stress applying early, but nobody can apply until around Jan 1st because you need the finan info from 2005. If you do it now, I'm pretty sure you'd be okay.</p>

<p>When you do the FAFSA online, you "sign" it using a PIN. Both you and your parents have to have separate PIN's and it takes a day or so to get that done so do that early. (You apply for the PIN's online, too.) The FAFSA website is <a href="http://www.fafsa.ed.gov%5B/url%5D"&gt;www.fafsa.ed.gov&lt;/a>. </p>

<p>Hopefully, you are poor enough to get something. The EFC estimator at CB is at:
<a href="http://apps.collegeboard.com/fincalc/efc_welcome.jsp%5B/url%5D"&gt;http://apps.collegeboard.com/fincalc/efc_welcome.jsp&lt;/a>
Good luck.</p>