Seven Tips for College Financial Aid

When learning about financial aid and its associated lingo – the FAFSA, 529 plans and more – it can feel like you’re drowning in alphabet soup. Here are seven tips that will keep you on the financial fast track and ensure that your bank account isn’t empty when you cross the stage at college graduation:

1. Know where financial aid comes from.

The federal government is the biggest source of financial aid for all students. When you fill out the FAFSA, you’re applying for need-based aid from Uncle Sam (although all students who file a FAFSA are eligible for federal unsubsidized student loans, so it’s a good idea to file regardless of whether you feel you’ll qualify for need-based aid).

Who provides the second most financial aid? Colleges. Apply to a balanced list of colleges, including schools that are safe bets for you academically (and thus more likely to give you merit-based aid) and ones that have generous need-based aid programs.

If you’re still scratching your head when you come across terms like “FAFSA” and “federal unsubsidized student loans,” learn the basics now so that you’re not struggling as you head into senior year.

2. Assess where you stand in relation to the rest of the applicant pool.

Colleges that offer merit aid are discounting tuition to encourage high-achieving students to choose them over other universities. If you want merit aid, apply to at least four “likely” colleges that, based on your grades and standardized test scores, you have a very high chance of being admitted. Those are the colleges that most likely to entice you to attend with an attractive scholarship offer. How should you find these schools? Starting junior year, develop a sense of where you fall academically within the applicant pool at your colleges of choice. Look up and record the average score ranges and GPAs of the incoming class at all of the colleges you’re interested in. Every college in the county has a profile on the College Board’s website that includes average score ranges and GPAs.

3. Use net price calculators.

Net price calculators are a useful tool for forecasting what your aid package might look like at a specific college. Federal law requires every college to have a net price calculator on their website. Enter information about your income, taxes, and sometimes about the value of your other assets – like your home and investments – and the calculator gives you a general idea of what level of aid you might qualify for and what you’ll end up paying out of pocket.

4. Look locally for outside scholarships.

There’s a lot of buzz about all of the unclaimed scholarship money out there, and there are national and international websites where you can dizzy yourself writing 500-word essays in hopes of earning a small scholarship. Somebody probably wins those contests, but there are so many thousands of applicants that you aren’t likely to get the best return on your efforts. Instead, focus on small, local scholarships. Because they tend to have fewer applicants, your chances of winning are greater. Most high school guidance offices have a good sense of what local scholarships might be available.

5. Consider universities that offer automatic scholarships.

Some universities, typically larger public intuitions like Michigan State University and the University of Alabama, publish their merit-based aid criteria on their websites so applicants know what they qualify for in advance. These are often places that are actively trying to recruit more out-of-state students and will discount tuition to reach that goal. I don’t advise applying to a college just because it offers automatic scholarships, but I do like the transparency, and if one of the universities that offers these awards happens to be a good fit for you, go for it!

6. Know what’s required and stay on top of deadlines.

A lot of seniors are so stressed out by application deadlines that they aren’t thinking about financial aid deadlines. As you are building your college list, keep track of which forms are required and their filing deadlines. Complete the financial aid forms soon after they become available, and that means submitting the FAFSA during October of your senior year. Submitting your financial aid documents as soon as possible allows colleges to process them earlier, so there’s a better chance of hearing about your award sooner if you tackle these forms early.

7. If all else fails, appeal politely.

Are colleges willing to negotiate financial aid offers? There isn’t a straightforward answer to this question. Even so, it is possible to discuss with colleges about your financial aid award. Here are some pointers:

• Compare apples to apples. Instead of asking the college to match the amount that another college has awarded you, work backward from the total cost of attendance and subtract the award amount. Then, you can politely ask the college to match the out-of-pocket cost, even if it means you’ll receive a smaller award.
• Colleges are more likely to match the offer of a school that competes for the same applicants. No matter how convincing your argument, Princeton University won’t match the award you received from a college with a 90 percent acceptance rate.
• Your appeal will be more effective if you are able to say some version of the following (and actually mean it): “I’m very interested in your institution and would love to attend if we are able to make it work for our family financially.”
• Keep in mind that it’s much more difficult to make the case that a college is not affordable for your family if you have failed to file necessary financial aid forms.

For more helpful tips, check out collegewise.com.