I'm so confused about Financial Aid

<p>Can someone please tell me what financial aid is? How do I apply for it? When should I apply for it.</p>

<p>I come from a very low income family but my first choice school is an expensive private school that's out of state. Does this mean I can't attend that college? My parents claim that money is no problem since I can get a loan and pay it off. I don't think they're right at all. What if I have to a get a $200,000 loan for my 4 years in college?! Can someone please help me out?</p>

<p>Thanks in advance!</p>

<p>You apply for financial aid (FA) when you apply to colleges. Usually FA comes from the college you are admitted to. Top-tier privates (ivies and such) will meet all your need, if you’re low income they will make it so you can afford to go there. Not-top-tier privates may or may not meet your need. FA is usually grants (ie free money), work study, and loans (top tier=fewer loans). Don’t take out lots of loans. </p>

<p>If you could give specifics (what college you’re applying for etc.) and stats that would help. Some colleges do merit based scholarships. You can apply for outside scholarships (ie not sponsored by the school-- gates millenium and a host of others) in addition to FA.</p>

<p>There are two kinds of aid: Need-based (this is where your financial situation comes in; it’s offered by both the government and the college), and merit aid (this is offered by the colleges, and is based on your grades, test scores, and other achievements; it usually has nothing to do with your financial situation).</p>

<p>The gateway to all need-based aid is a thing called [FAFSA</a> on the Web-Federal Student Aid](<a href=“http://www.fafsa.ed.gov/]FAFSA”>http://www.fafsa.ed.gov/). It’s a government form which makes you eligible for federal aid, such as subsidized student loans, work study, and some federal grants. </p>

<p>The big need-based bucks come not from the government, but from the colleges, and they use that very same FAFSA to determine how much need-based school grant money they will offer you. (There’s another form called CSS which some colleges use; they will request it if they need it. But even these schools use FAFSA.) There is a huge variation in how much need-based aid that different colleges give. </p>

<p>Then there’s merit money, or scholarships. This is money colleges offer you because you’re so wonderful, not because you’re low income. Again, there’s a big variation between colleges.</p>

<p>So – strategy: First, look for schools which are known for being generous with aid. There are several threads at the top of this forum which will point you in the right direction. Also, you want to apply to schools where your stats would put you in the top 25% of their applicants; in other words, schools where you’d be a shining star and they’d pay you to come. Look at the stats for last year’s incoming freshman class to see how you stack up.</p>

<p>Second, submit FAFSA in early January of your senior year. FAFSA requires information from your parents’ tax return (and your own if you have to file one), so ask your parents ahead of time to get their taxes done as quickly as possible. But don’t wait till the taxes are done to do your initial FAFSA; you can put in estimates and then make corrections once you have the final figures. But don’t put it off.</p>

<p>Third – speaking of not putting it off – pay careful attention to all deadlines, and be sure you meet them! This is critical. If you miss a deadline, you’ve probably missed out on the money. </p>

<p>Fourth, whatever you do, do NOT borrow anything approaching $200K, or $100K, or even $40K. It’s probably inevitable that you’re going to end up borrowing the maximum in federal loans, which is around $27K for the four years, but that is offered by the government at advantageous terms, and should be manageable after you graduate. But don’t do much more borrowing than that. You will live to regret it. </p>

<p>Fifth, don’t fall in love with a specific school until you know for sure that you can afford to attend – and that doesn’t happen until spring of senior year when the aid offers come. That’s really hard, and it’s OK to dream a little. But keep an open mind, and know that there are plenty of wonderful colleges out there, some of which may be willing to make college affordable for you. </p>

<p>Sixth, seriously consider the smart way to get a degree for half the cost: Do two years at your community college, and then transfer to a 4-year school. Your diploma will be just as valid as if you’d taken all 4 years at the university. </p>

<p>You can go to college without crippling your future with debt. It takes willingness to do the research and fill out the forms, and open-mindedness about where you could see yourself going. But you can do that. ;)</p>

<p>And remember that FAFSA is based on last year’s finances. The first time you fill out FAFSA is January in the middle of your senior year. But it is based on the previous year’s finances. Even though college doesn’t start until the Fall, the money in FAFSA is based on the previous January through December. And you do it every year of college.</p>

<p>Lasmas has given you great information.</p>

<p>I want to correct some of your misinformation directly. When it comes to loans, the only ones you are guaranteed to be able to take are the DIrect Loans, also called Staffords. They are pretty much limited ot $5500 for your freshman year, an amount that can help cover costs of commuting to a local state school like a community college. Anything above that requires a cosigner with a decent credit history who will equally be on the hook for whatever you borrow with him. Your parents can apply for a parent Direct Loan called PLUS, but they have to pass the credit review and those would be exclusively a parent loan. If they cannot get PLUS after applying, you can get $4K more of Staffords yourself.</p>

<p>The interest rates on these loans are no real bargains, at around 7% and other than the small amount that is subsidized while you are in school.</p>

<p>The better the student you are, taking difficult courses and getting top grades in them, along with high test scores, the better your chances of getting into a selective college, of getting merit money, of getting a good financial aid award. The colleges themselves determine almost of all this.</p>

<p>Your most important college picks are the schools you know will take you AND that you can afford. From that point on, you can apply to your heart’s desire, knowing that your base is covered, because a lot of the rest of this is like playing the lottery.</p>

<p>come from a very low income family but my first choice school is an expensive private school that’s out of state. Does this mean I can’t attend that college? My parents claim that money is no problem since I can get a loan and pay it off. I don’t think they’re right at all. What if I have to a get a $200,000 loan for my 4 years in college?! Can someone please help me out?</p>

<p>NO, a young student CAN NOT borrow $200k. Your parents are very naive. Tell them that THEY would have to borrow/qualify/co-sign such loans AND the bank would consider THEM responsible for paying those loans. Since THEY are low income, no bank is going to lend them that much or let them co-sign that much. </p>

<p>I’m always surprised that low-income parents are so willing to encourage their kids to go into HUGE life-killing debt for college. They must think that new college grads are making a LOT of money upon graduation. NO THEY"RE NOT. $200k in debt means payments of over $2000 a month for 10 LONG years. </p>

<p>The good news is that IF your private school promises to “meet need” and you are low income, then the school will give you lots of aid. In your case, apply to a few schools that “meet need”, and a few financial safety schools.</p>

<p>How is your school’s guidance department? Does it have a college specialist? Our HS had some group seminars for jr and sr parents on FA, you might want to check and see what your school does. Regardless, call guidance right now (usually work all summer) and set up a time to go talk about college goals and what might work for your family (and take your parents).</p>