10 Steps to Help You Navigate the Financial Aid Maze

10 Steps to Help You Navigate the Financial Aid Maze

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Getting into a college of your choice can be competitive, but paying for your degree can be equally difficult. As the cost of tuition and room and board rise, many family incomes are not able to keep up. This may leave a huge gap between what college costs and what today’s students and their families can afford to pay. That’s why it’s crucial for families to apply for financial aid to help bridge the gap.

The process to apply for financial aid can be long and confusing. But successfully navigating it will net you as much money for college as possible to keep up with rising costs.

Financial planning, talking to experts, applying for federal aid and searching for scholarships are all ways to help you secure the funds you need. But what else can you do? Here are 10 steps to consider as you begin navigating the maze of financial aid for college.

10 steps to help you apply for financial aid

The complexity of the process of applying for financial aid for college may keep many students and families from getting the college aid they need. Still, the potential payoff of applying for financial aid makes it worth it.

For prospective students and their families, it may take time and effort to apply for financial aid for college. But if you follow the steps below, they could help you understand how to make the most of your financial aid.

1. Start researching, planning and learning now
2. Focus on your FAFSA
3. Forecast your potential financial aid
4. File your FAFSA correctly
5. Beat financial aid deadlines
6. Apply for state student aid programs and school scholarships
7. Treat applying for scholarships like a job
8. Prioritize free financial aid first
9. Borrow strategically through student loans
10. Appeal your school for more financial aid

1. Start researching, planning and learning now

Ideally, students and their families should start planning for college costs years in advance. “Students and their parents can educate themselves on the process before diving in,” said Fastweb contributing editor Kathryn Knight Randolph. “The college admissions process takes some students months — even years — to complete; it should be the same with financial aid.”

Starting early could also give you time to plan and avoid costly mistakes. You’ll have plenty of time to apply for financial aid ahead of deadlines and employ strategies that can help you receive more aid.

“Research the process, apply and then figure out which type of financial aid package is right for you through further research and seeking counsel,” Randolph said.

Reach out to experts and utilize online resources

As you’re wrapping your head around the process involved for financial aid, it helps to know what resources are at your disposal.

One of the first places to start is with experts. High school guidance counselors and college aid officers are there to help students plan for a successful future and find financial aid. They provide individualized advice based on a student’s academic and financial situation. A counselor will also be aware of scholarships, financial aid or tuition-assistance programs specific to a student’s school, community or state.

There is also a wealth of online information available to students and parents on how to apply for financial aid. For instance, these awesome resources can help you started:

  • The non-profit educational group Khan Academy offers “Paying for College,” a free online course with in-depth information on the financial aid process.
  • The help section of the FAFSA.ed.gov site answers many tricky questions parents and students might have.
  • The College Financing Plan from the U.S. Department of Education (ED) helps students quickly understand and compare financial aid offers from different colleges.

2. Focus on your FAFSA

So where can you start learning about federal and other kinds of financial aid? With the Free Application for Federal Student Aid (FAFSA). You fill out the FAFSA at FAFSA.ed.gov to provide the information about you and your family’s financial circumstances, and the federal government uses that information to determine how much student aid you need.

Completing a FAFSA can be a time-consuming process that some students or parents might be tempted to skip. However, filling out a FAFSA is the only way college students can access all forms of federal financial aid, from Pell Grants to Direct Subsidized Loans — thus, taking the time to file your FAFSA is a must.

3. Forecast your potential financial aid

You don’t have to wait until your FAFSA is filed and processed to get an idea of what kind of financial aid and assistance you can expect. You can use the FAFSA4caster tool on the official FAFSA site to project the amount of financial aid for which you’d be eligible.

It can also be helpful to understand how the Department of Education’s office of Federal Student Aid uses the information on the FAFSA to decide how much aid each student gets.

The financial details are used to calculate your Expected Family Contribution (EFC). This is the Federal Student Aid office estimate of what your family should reasonably be able to pay toward college costs, based on these factors:

  • The family’s taxed and untaxed income and benefits
  • Financial assets, including college savings
  • Family size
  • Number of family members attending college concurrently

You can use this tool to estimate your own EFC.

Generally, the FAFSA compares your EFC to the costs you’ll face in college — your cost of attendance — and offers financial aid to help bridge that gap. Here’s the general formula to illustrate:

Cost of attendance (COA) – EFC = Financial need

The higher your EFC, the less financial aid you will receive. Unfortunately, according to Randolph, “there isn’t too much a student can do to change their financial circumstances.” However, Randolph noted it is possible to “maximize aid eligibility” and lessen your EFC if you plan well in advance.

4. File your FAFSA correctly

The information you provide on your FAFSA directly determines how much aid you can receive, so according to Randolph, “the best way to get the most out of the financial aid process is by providing the biggest, most accurate picture of your financial circumstances on the FAFSA.”

On top of simply filing a FAFSA, making sure you do it correctly will smooth the process and could even help you qualify for more aid. Randolph gave her tips for avoiding common FAFSA mistakes:

  • Go through the FAFSA “slowly, and don’t leave anything blank,” she said. “If the answer to a question is zero, or it doesn’t apply to you, write in ‘0’.”
  • Make sure you get your family size right. Don’t forget to “include the student in the household size,” Randolph said. “Step-parents’ information must be on the form, too.”
  • “The biggest mistake students make is actually forgetting to sign the form,” she added. “So sign the form!”

If this is the first time as a parent or student that you have filed a FAFSA, you might need some extra help — and it’s often out there. “Many communities will host free FAFSA workshop days, where professionals will help you through the application,” Randolph said.

Lastly, you should never lie or purposely misrepresent any information on the FAFSA. Not only can this jeopardize your chance of getting financial aid, it’s illegal.

5. Beat financial aid deadlines

FAFSA submissions open on Oct. 1 every year, and they remain open until the end of June a year and a half later — but you shouldn’t wait to file. “File [FAFSA] before the deadline, and if you can, file as soon after October 1 as possible,” Randolph advised.

But if you have a whole 21 months to submit a FAFSA, what’s the rush? Well, filing early can have a few benefits:

  • Your FAFSA will be received and processed well before the school year when you will need it.
  • Find out earlier what aid you qualify for. This can help you plan ahead, budget for college costs and even compare colleges to choose the most affordable option.
  • If there are any errors in your FAFSA, you’ll have time to correct or amend the application so you can receive the correct amount of aid.
  • You could get more non-federal aid: “Schools and states have a limited amount of aid, and a bunch of states have a FAFSA deadline of ‘as soon as possible after October 1,’ (meaning they actually could run out of financial aid) so it’s good to be at the front of the line!” according to a Department of Education blog post. If you apply early, you’ll have a better chance to qualify for these non-federal financial aid programs.

6. Apply for state student aid programs and school scholarships

Another reason to submit a FAFSA early is that many state- and school-level aid programs rely on this information to assess need and grant assistance. “States also have individual deadlines for when the FAFSA must be submitted in order to be considered for state aid,” Randolph said — and these are often earlier than FAFSA deadlines.

You should also do your own legwork to find state-sponsored grant or scholarship programs. This State Financial Aid Programs locator tool from the National Association of Student Financial Aid Administrators (NASFAA) is a great place to start.
These carry the same high costs as

Merit aid

As well as more need-based aid, according to Randolph, “schools will also offer students ‘merit aid,’ which is just a fancy term for scholarships.” This is institutional aid offered by your specific college; ask your college for a comprehensive list of the institutional aid it offers, including scholarships and grants.

If it’s unclear how to apply for each grant or scholarship, follow up and keep asking questions to understand which awards you could get. Persistence and initiative could pay off when it comes to getting financial aid from your school.

Check if your state or college needs additional paperwork or information from you. “Some colleges have a supplemental form that they require students and parents fill out for a bigger, better picture,” Randolph said. One common form that nearly 400 colleges require is the CSS Profile, for example.

7. Treat applying for scholarships like a job

“Students should make applying for scholarships a part-time job,” Randolph said. There are many college scholarships out there, and you might have a better chance at qualifying than you think.

While many are granted based on academic performance, not all are. Many simply have a minimum GPA requirement or have other eligibility considerations that can be relatively easy to meet.

Here are a few top scholarship search sites to get you started:

Because there are so many opportunities, you should “set a goal to apply to one or two scholarships a week,” Randolph said — “it’s a numbers game,” and the more scholarships students find and apply for, “the better their chance of winning,” she added.

8. Prioritize free financial aid first

Once your FAFSA is completed, processed and used to determine your financial need, you’ll get a financial aid award letter from the colleges you applied to. Each letter outlines the financial aid package you’ll receive if you accept their offer of admission.

However, they don’t often explain in detail what each type of federal financial aid is. You should do your own research to understand how each kind of financial aid works — whether it’s a gift with no financial obligation or a loan that you’ll have to repay.

Among the types of financial aid that take the form of gifts are:

  • Grants: These are gift awards that can include Pell Grants from the federal government and Federal Supplemental Educational Opportunity Grants awarded by the college. “Students should prioritize merit aid [such as scholarships] and grants in their financial aid package,” Randolph said. “Neither of these have to be paid back.”
  • Scholarships: These, too, are gifted awards to help cover college costs. Unlike grants, scholarships are usually offered by private entities and granted based on merit as well as need.
  • Work-Study: “Work-study will require that you work a campus job,” Randolph said, “and you can either use the paycheck for personal expenses or put it toward your tuition bill. If you qualify for work-study, take that over any loans in your package.”

9. Borrow strategically through student loans

For some students, financial aid is the only reason they can complete a degree rather than dropping out of college. For others, financial aid helps them leave school with some student loans — but limits the debt to a manageable amount.

If you still have a gap between financial aid and the total cost of attending college, student loans can be an option to make up the difference.

Listed below are the types of loans you might see on a financial aid award letter, in order of which is best to prioritize in choosing the loan portion of your aid (all listed interest rates are for loans disbursed after July 1, 2019 and before July 1, 2020):

  • Direct Subsidized Loans: These loans for undergraduate students are the best way to finance college costs. They carry low interest rates — 4.53%. And due to a student loan interest subsidy, interest charges on these loans are also partially paid for by the government.
  • Direct Unsubsidized Loans: Unsubsidized loans have the same low rates as the subsidized loans, but the student borrower is responsible for paying all interest on these. Thus, borrowing through unsubsidized loans will cost you more.
  • Direct Graduate Unsubsidized loans: These are unsubsidized loans available to graduate students, and they carry a higher interest rate of 6.08%.
  • Grad PLUS loans: Also available to graduate students, Grad PLUS loans are some of the most expensive, with an interest rate of 7.08% and a loan fee of 4.236%.
  • Parent PLUS loans: These carry the same high costs as Grad PLUS loans, but they can only be used by parents of dependent undergraduate students.
  • Private student loans: Financing from private lenders might also be listed in your financial award letter, or you can find it on your own. Using federal student loans first is often the best move, noted Randolph said — however, “if you still need money to bridge the gap between financial aid and the cost of attendance, you’ll have to look at private student loans.”

Be smart and strategic about how you use student loans. Borrow only what you need to cover college costs after using all other aid. Project your future student loan payments with a tool like a prepayment calculator and start learning about different student loan options to understand what it will take to repay this debt after graduation.

10. Appeal your school for more financial aid

Even after you get your financial aid award letter, there still might be hope to get more aid. If you feel you did not receive enough funding, or it was less than you expected, you might consider appealing for more financial aid. Most schools have their own appeal processes.

“You can call the school’s financial aid office and begin talks about a professional judgment case, which will enable the school to potentially offer you more financial aid based on your circumstance,” Randolph said. However, nearly all schools require you to write a formal appeal in letter or email form.

You’ll need a good reason to appeal your financial aid — for instance, if your circumstances changed between when you received your financial aid package and the time school starts. Maybe your sibling decided to enroll in college at the last minute, one of your parents lost a job or there’s been a family financial emergency. You might also be able to appeal for more financial aid if you’re in an abusive family situation.

In these cases, financial aid administrators can often adjust your financial need and find additional aid sources.

Apply for financial aid to afford college

Financial aid can clear the path to a college degree and helps you minimize student loans to lessen your debt burden after graduation. It’s about more than just covering college costs. The arduous process of applying for financial aid, from researching your economic options and applying for scholarships and loans to setting future repayment goals, is a useful experience as you build a healthy, post-college financial life.

Whatever your family’s money situation, financial aid is there to help students surmount college costs. Following the steps above will point you to the best strategies and resources to help you apply for financial aid, qualify for more assistance and receive all the help to which you’re entitled.

Maya Dollarhide contributed to this report.

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