Avoid this common FAFSA mistake

Any class of 2011 senior who wants to apply for college financial aid should now be completing the FAFSA form, availalbe here.  But here's a common mistake you can easily avoid. 

"You" and "Your" refers to the student, not the parent, unless the form specifically says otherwise. 

The FAFSA is written with the assumption that the student–not the parent–will be the one completing it.  But that's often not what happens.  Many parents fill out the FAFSA for their kids, which is fine, as financial aid is the one part of the college application process where I think it can be a good thing for parents to jump in and help or just take over completely.

So parents, if you're completing the FAFSA for your student, remember that the form wants your student's information (name, birth date, social security number, etc.) until you get to the section that specifically requests parent information. 

For senior families: This is the time to start the financial aid process

Most students will submit their applications for admission before applying for financial aid (so you actually apply to college without necessarily knowing exactly how much each college is going to cost).  And a lot of families fixate so much on the admissions deadlines that they aren't aware of what they'll need to do to apply for aid. 

If you're a senior (or the parent of one) who wants to apply for financial aid, here are a few things you should do now.

1.  Visit the financial aid sections of your colleges' websites.

2.  Find out exactly what forms (FAFSA, profile, or school-specific) are required and when they're due. 

3.  Look for information about other requirements, like submitting business statements or providing step-parent information.

You want to enter the new year knowing exactly what you'll need to do to apply for financial aid and when you'll need to do it.  Getting that information ahead of time will make the process of actually applying faster, easier, and less stressful.

 

Updates on financial aid resources

Former high school counselor and continuing fellow inhaler of college admissions information, Cyndy, sent me this site.

I haven't tried it myself, but Cyndy has found it to be an "amazing resource" that she wishes was available when she was still counseling kids.

And I've recommended the book Paying for College Without Going Broke here before.  The 2011 version has now been released and there are a few disappointed reviewers on amazon.com who noticed that the book no longer includes the worksheets for calculating your EFC (Expected Family Contribution) using the institutional methodology.  I suspect this was due to in part to the protracted publishing process–maybe the newest information wasn't available when the book went to print?I'd still recommend the book as one of the best guides to understanding how financial aid really works. 

And to calculate the EFC using the IM, just go here (finaid.org is my other favorite financial aid resource).

Start here with your financial aid questions

I've shared the site finaid.org here before as a treasure trove of great financial aid information.  But this is one of those sites with so much information that it would be easy to spend a lot of time there and still overlook a tool or article that might have been exactly what you needed. 

Thankfully, they offer a great site map here.  Spend five minutes scrolling through the list and you're guaranteed to find exactly what you're looking for. 

You know a financial aid site is comprehensive when they even include a specific section with jokes.  I can't say that I knew there was such a thing as jokes about financial aid. 

Should parents talk with your kids about college costs?

When I did one of our "Financial Aid and Scholarships" seminars for our Collegewise parents last weekend, I asked them to leave the kids at home.  I want parents to feel comfortable asking questions about financing their kids' educations without the added pressure of having the students in the room.  But that doesn't mean parents shouldn't talk with their kids about college costs.  

A lot of parents believe that they should shield their kids from the economic realities of attending college, that it's a student's job to get accepted and a parent's job to pay for it.  But I think that parents should have honest, open discussions with their kids about college costs.  High school kids should know what their family can afford to pay for college, and what colleges will be off the table if financial aid doesn't cover the rest.  Kids should know the efforts parents have made to save for college and the continued sacrifices you'll be making during the four years you have to write tuition checks.  Having that conversation now, however unpleasant it might be, is much better than having it later when a student has an offer of admission in hand but a family doesn't have the money to pay for it.   

High school students who understand the realities of college costs for their families are more likely to appreciate that a college education is a gift, no matter what school they end up attending.  And once those kids get to college, they'll understand the financial and emotional investment their parents are making.  They'll be more likely to drag themselves out of bed for that 8 a.m. psychology class.  They're more likely to appreciate all the opportunities for learning, growth and fun that are available to them during their college careers. 

So parents, consider having the college financing talk with your kids.  Invite them to participate in the discussion.  A student who's mature enough to attend college is mature enough to know what it's going to take for her family to pay for it. 

The truth about outside scholarships for college

I did a financial aid seminar for our Collegewise families last weekend and talked a little about "outside scholarships,"  which are little-known awards or scholarships from private companies and foundations.  Families are often given the impression that there is a lot of money available from these sources if you're able to find it.

But according to Paying for College Without Going Broke, the money from outside scholarships accounts for only about 5% of the aid that is available.  The author points out that the biggest chunk of scholarship money comes from funds provided by the federal and state governments, and from the colleges themselves. 

So, is applying for outside scholarships even worth a student's time?  It's not an easy question to answer.  Even if the amount of money available is comparatively small, free money for college is always a good thing.  So here's how I recommend families consider that question.

Applying for outside scholarships is a time consuming process.  Kids have to research and find the scholarships, fill out the applications, and often write essays, get additional letters of recommendation and maybe even interview. So, let's say your student took the time to find and apply for 20 outside scholarships and won $500 – $1000.  Would you think it was worth your student's time and effort? 

If your answer is, “Of course!", then you should consider having your student apply for outside scholarships. 

If, on the other hand, you'd feel like a $500-$1,000 return on your student's investment of time and energy just wouldn't be worth it, you might reconsider and have your student spend her time studying and playing on the soccer team.

Of course, my figure of $500-$1000 is an arbitrary one; your student might win more or less than that.  But our experience with our Collegewise students has been right in line with the logic in the aforementioned book; the biggest awards don't come from the outside scholarships.  In fact, I can't recall ever hearing that one of our students won a $15,000 scholarship from a private foundation or company, but we see it happen all the time from the other sources, particularly from the colleges themselves.  

If you do decide to search for outside scholarships, never pay someone to help you find them.  All the information is available to you for free if you're willing to look for it.  Two of the best places to search, and to do so for free, are here:

www.scholarships.com

www.fastweb.com

Thoughts for parents about college costs

One of the difficult parts about researching colleges is that kids have to apply without parents knowing what it is actually going to cost.  You know the listed price (tuition, room and board, etc.), but you don't know how much financial aid you receive until you are actually admitted to the school.  So how can parents assign any kind of financial guidelines to the kids' college search?

If your kids are starting to talk about colleges and you're starting to worry about the costs, here are three basic guidelines to keep in mind.

1. Don’t necessarily eliminate a college based on the cost.

Every financial aid talk I've heard emphasizes how much money is actually available for college.  And the amount of aid you can receive isn't dependent only on how much money you have (or don't have).  The academic strength of the student, her match with the school, and the college's desire to have her on campus can also influence a financial aid award. So while I wouldn't recommend applying to a list of schools that are all out of your price range, don't necessarily limit your list to colleges you're sure you can pay for. 

2. Talk with your kids about the cost of college.

I don't think parents should feel obligated to hide the economic realities of college from their kids.  It won't hurt kids to know how much money is being invested in their education; a student who knows how much his parents are sacrificing to send him to college is more likely to get up for that 8 a.m. calculus class every day during his freshman year.  Don't forget that while parents may be paying the tuition, student loans are taken out in the student's name.  And it will be the student–not the parent–who takes that on-campus job as part of a work study financial aid award.  That’s why college financing is often a family decision whether you want it to be or not. 

3.  Consider picking a financial safety school.

Consider encouraging your student to apply to at least one school where you're sure the student
can get in, you're sure he'd want to attend, and you're sure
you could pay for it even if you got no financial aid.   

How to compare financial aid awards

Comparing financial aid awards from colleges isn't as easy as asking, "Who's giving us the most money?"

We've met more than one family who admitted to being swept up by the total figure in the financial aid award letter they received along with an offer of admission from a college.  When a college says that you've been awarded, "$16,000 in financial aid a year for four years:" that doesn't necessarily mean that you're getting a $16,000 discount off the college's sticker price. 

Financial aid awards can be a combination of free money (scholarships), loans, and work study.  To figure out who's giving you the best offer, you need to consider the total cost of attendance for the college, the amount of free money, loans and their accompanying interest rates, etc. 

For senior parents, the award comparison tool available from Finaid.org is wonderful.  You plug in the numbers; they'll tell you who's giving you the best offer. 

Just remember that the "cost of attendance" (COA) is not just the tuition–it's tuition, room and board, personal expenses, etc.  Most schools list their estimated COA on the financial aid section of their websites.


A website with some merit

I learned about what looks to be a great resource for high school kids today, www.meritaid.com.  The vast majority of merit-based scholarships come from the colleges themselves (as opposed to outside scholarships that come from companies, organizations, private donors, etc.).  And this website seems to be culling that information together so that a student can search for schools and research the scholarships that are available.  You can even create a profile that will generate a list of colleges with potential merit aid that match your profile. 

I would still argue that visiting the schools' individual websites is the only way to be sure you know about all of the scholarships they offer, but you could use this site as a way to narrow down your search.

Thanks to Mary Beth Kravets, a high school counselor and author of this fantastic college guide for students with learning disabilities, for sharing this.   

Not-So-Shameless Plugging

PyforCollege

I did a financial aid seminar for families last weekend and as I revealed to them, I first learned a lot of the information I shared from "Paying for College Without Going Broke."  It helped me make sense of the financial aid process, and I was an English and history major in college who has never once successfully balanced my checkbook.

The 2010 version releases today, and I've already ordered my copy.

As with all previous versions of the book, the author describes exactly how the process of applying for financial aid works, with tips and strategies to increase aid and reduce costs.  But the description of the 2010 edition says that it has also been updated to reflect all of the current economic uncertainty, it will include the latest financial aid forms with guidelines to help you complete them, and it will explain recent changes to the tax laws and how they impact financial aid.    

Whether you're the parent of a senior who needs to apply for financial aid right now, or the parent of a freshman who wants tips on the best ways to save for college, I'd order a copy.