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Blog #35: PAYING FOR COLLEGE - Prepare now to apply for Federal Financial Aid

Updated: Aug 16, 2022

As high school seniors excitedly prepare to apply for college this fall, parents are probably anxious at the sticker shock of college tuitions. We know that the admissions process and paying for college can be quite intimidating, especially if you are going through it for the first time. Paying for college is a significant commitment for most families. While many families save over a period of years to pay for their children's college, the reality is that tuition costs have far outpaced family earnings. As a result, when it's time to apply, most families must look for aid to cover their student's additional financial need. As 2 Black Moms (with 6 kids between us who have attended college), we want to share some tips that can maximize your access to financial resources for your student and reduce the burden of college debt.

Start now to gather documents needed to apply for financial aid. If your student will be applying Early Action or Early Decision, you should plan to have your financial aid documents and completed forms ready early so that the aid forms can be submitted with the applications.

Free Application for Federal Student Aid. Each year, the federal government sets aside around $150 billion in federal aid for college students. The aid comes in many forms: grants, scholarships, federal student loans and work study (see below). In order to qualify for that aid, students must fill out a standardized need analysis form called the Free Application for Federal Student Aid (FAFSA). The FAFSA is used to determine a student's financial need.

Check these links to access the FAFSA form and instructions:

The FAFSA form opens each year on October 1. This is the first day that students and parents can access the form electronically and begin submitting all of the required information to be considered for federal financial aid. You should complete and submit the form as early as possible because colleges have limited financial aid and some aid is awarded on a first-come, first-served basis. Before starting the form, be sure to have your and your student's social security numbers, driver's license information, bank statements, tax returns, and W-2 Form. This information is used to determine an Expected Family Contribution (EFC), which is a measure of your family's financial strength generated by the information provided on the FAFSA. It is used to determine a student's financial need. The FAFSA is submitted annually for the duration of your student's college enrollment.

College Scholarship Service (CSS) Profile/Financial Aid Form. Many private colleges and some state-supported institutions may require you to electronically complete the CSS/Financial Aid Profile form in addition to the FAFSA. The CSS Profile is developed and processed by the College Board, the same organization that brings you the SAT. This financial aid source makes available nonfederal scholarships and other institutional aid and offers families the opportunity to describe any unique or extenuating circumstances affecting their ability to pay for college.

Check here to access the CSS Profile and instructions:

Some colleges and universities will require other forms as well. To find out which forms are required by a particular college, you should research the college's financial aid office website. All of the forms ask the same types of questions. While you may find some questions invasive (for instance, the FAFSA asks about family assets and other factors, such as the number of children in the family), be mindful that colleges use this data to determine your student's eligibility for aid.

Total cost of attendance. In determining your student's financial need, a college weighs the "total cost of attendance" at the college. The total cost will include:

  • Tuition and fees

  • Room and Board

  • Personal expenses

  • Books and Supplies

In addition, as a parent of a college student, you should factor in "hidden costs" which are expenses that colleges don’t factor into the "total cost of attendance" analysis, but that may be incurred during your student's college years. For instance, if your child becomes sick and is attending college out of state, you may need to visit and take care of them for a few days (a cost you may have not planned for), or the cost of setting up a dorm room, or consuming meals off campus, or traveling home for the holidays and the summer. The point is that there could be many hidden costs to attending college and those costs vary depending on where your child attends college. So, remember to plan for hidden costs.

Financial Aid Package. After your financial aid materials are submitted, and your student learns of their acceptance, you can expect a financial aid package that generally consists of three types of aid:

  • Grants and Scholarships. This is the best kind of aid because you don’t have to pay it back. Grant money could come from the federal government, some from the state and some from the individual college. Scholarships are also free money, although there may be some conditions attached (academic performance, for example).

  • Federal Work Study. The federal government subsidizes this program, which provides part-time jobs to students. The money earned is put toward either tuition or living expenses.

  • Student Loans. These loans, usually taken out by students, are typically subsided (and guaranteed) by state or federal governments. The interest rates are usually much lower than regular unsecured loans.

You should also evaluate your family's financial capabilities to support the cost of your student attending the colleges they intend to apply to. Financial aid can help, but it is possible that even after receiving an aid package, you may not be able to fully finance your child’s first-choice college. Sometimes the aid offered by a college may not cover the total cost of attendance. Usually this means you will need to take on additional debt - possibly private student loans with higher or fluctuating interest rates. That said, be sure to discuss your financial boundaries with your child now since this may weigh into your student's college application strategy.

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