Financial Aid Experts Offer Advice

Faced with layoffs and investment losses, many families that thought they could handle college costs are finding themselves needy, while those who anticipated seeking help find their need even greater.

As of mid-February, the U.S. Department of Education had already received more than 2.2 million federal applications for student aid, 20 percent more than at that time last year.

As more seek help, the average price of college is going up. The annual cost for a year at a traditional four-year university increased by about 6 percent in 2008-2009 to $25,143 for private colleges and $6,585 for public schools, according to The College Board.

Against such odds, how can families foot the bill for higher education? We consulted with two financial aid experts — Cyndy McDonald, an educational consultant at McDonald & Associates in Visalia, Calif., and Maureen McRae, director of financial aid at Occidental College in Los Angeles, Calif. — to answer questions about seeking aid in uncertain times.

What advice do you have for families whose financial situations have changed significantly?

McRae: The calculation for financial eligibility is heavily weighted toward income, so a loss of income can change how much a student can receive. I would recommend families calculate their expected family contribution using a calculator on a website such as www.finaid.org.

What type of family situations are taken into consideration?

McDonald: Parent ages, the size of your family, the number of children in college and the size of a family business all have an impact on how much a family is expected to pay. When the family contribution is calculated, it applies as a contribution for the entire family. If a family has more than one student in college, then the family contribution is divided between each student.

A $40,000 estimated family contribution for one child in college will not qualify for financial aid, but if there are four siblings in college at the same time, your family contribution for each of the four students will be $10,000.

What is the biggest financial aid myth in light of the current economic climate?

McDonald: There is a common fallacy that getting outside scholarships will help reduce what a family is expected to pay . For example, the Garcia family has a $4,000 family contribution (as calculated through the FAFSA). Their son finds $4,000 in scholarship money. The family feels their expected family contribution of $4,000 has now been met, so the college will meet the rest. Not true.

Scholarship money does not reduce your family’s out-of-pocket expense. The scholarship money is part of the financial aid. They still owe $4,000 in a family contribution. Ask the college for their policy on outside scholarships.

Is there a maximum income cut-off for receiving aid?

McRae: There is no maximum cut off. All families who can’t write a check for the full cost of education (tuition, room, board, books, supplies and personal expenses) should apply for financial aid. You don’t know what you are eligible for unless you apply.

Besides need-based or merit-based aid awarded by colleges, are there any good resources for aid?

McRae: Students need to take the time to search for outside scholarships, many of which are not need-based. So many students (and their parents) say they don’t have time to do these searches, especially with no guarantees they will receive scholarships. But if the students don’t try, they will not get scholarships.

Is it true that everyone should fill out a FAFSA?

McRae: Yes, unless they can truly write a check for the full amount. Studies have shown that middle class families don’t apply for aid because they think they make too much money, but this is often conjecture. While the FAFSA is the application for federal aid (including subsidized loans), it is also used for state aid and institutional grants and scholarships.

Families might also be asked to complete a CSS Profile. This application, used by many private colleges, is used in conjunction with the FAFSA to award institutional grants and scholarships. So a family might not be eligible for federal aid, but eligible for aid offered by the schools.

What’s one thing many families likely don’t know about financial aid that they should?

McRae: You can appeal your financial aid awards. Most aid offices won’t negotiate for more money or match an award from another college, but a family can provide additional information that could have an impact on eligibility. The applications (both the FAFSA and CSS Profile) ask questions that are aimed at figuring out how much a family can contribute. But no form can cover everything, so by letting an aid office know about exceptional medical expenses, a recent job loss or having elder care expenses could make a difference.

Families should write to or visit the aid office of the schools their child is interested in attending. If you don’t tell the office about your situation, they simply will not know.

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