Can I Afford This?

There's no way around it -- public or private, a college education is expensive. But there are ways to cut that stack of bills down to size.

You probably are eligible for some financial aid to help you meet part of your college costs. Also, remember that you and your family already are paying some of these expenses right now: your food, clothing, and personal expenses, for example. In addition, scholarships, grants and loans will help reduce the bills.

What you need to know:

• How Do I Apply for Financial Aid?
• How Do I Calculate My Need?
• Am I Getting a Good Deal?
• Does a Savings Plan Work Against Me?
• Is It Too Late to Start Saving?
• Where Do I Look for Scholarships?

  How Do I Apply?

  The first step is filling out the Free Application for Federal Student Aid (FAFSA). These forms are available from your school guidance counselor, the Minnesota Higher education Services Office, any college or university financial aid office, or by calling 1-800-4FEDAID.

  You can also fill out the FAFSA online.

  The financial aid you are offered is based roughly on your financial need -- or the difference between a college's costs and the amount your family can be reasonably expected to pay. Many schools also ask you to complete a separate college financial aid application -- so be sure to ask about the requirements of each school that interests you.

  There are three basic kinds of need-based aid:

  Grants are gifts that do not have to be paid back. Federal grant programs include the Federal Pell Grant and the Federal Supplemental educational Opportunity Grant.

  Loans are borrowed money that has to be paid back over a period of time, usually after the student leaves school. Federal loans include Federal Perkins Loans, and loans made under the Federal Family education Loan Program (FFELP). FFELP loans are obtained from financial institutions such as banks and credit unions, and include Federal Stafford Loans (subsidized and unsubsidized), and Federal PLUS Loans.

  Work-study is money you must earn by working at a part-time job. Funds for the major portion of wages students earn on work-study jobs come from the Federal Work-Study Program.

  College Board Online
  Financial Aid Applications

  College Board Online
  Parent Loan Repayment Calculator

  College Board Online
  Student Loan Calculator

  George Mason University
  Common Errors Made When Applying for Financial Aid

  How Do I Calculate My Family's Need?

  When you apply for federal student aid, the information you report is used in a formula established by Congress. The formula determines your Expected Family Contribution (EFC) -- an amount you and your family are expected to contribute toward your education. If your EFC is below a certain amount, you'll be eligible for a Federal Pell Grant -- assuming you meet all other eligibility requirements.

  You can check out several online EFC calculators to estimate what your expected contribution might be.

  College Board Online
  Expected Family Contribution

  National Association of Financial Aid Administrators
  Financial Aid Estimation Form

  Am I Getting a Good Deal?

  All colleges use the same guidelines to determine your ability to pay -- but each college has its own policy on how much grant aid it provides. Be sure to shop around, and inform the school of any mitigating circumstances that may hamper your ability to pay.

  As you apply, you have the right to receive the following information from the school:

  • The financial assistance that is available, including information on all federal, state, local, private and institutional financial aid programs.
  • The procedures and deadlines for submitting applications for each available financial aid program.
  • How a school selects financial aid recipients.
  • How the school determines your financial need.
  • How the school determines each type and amount of assistance in your financial aid package.
  • How and when you'll receive your aid.
  • How the school determines whether you're making satisfactory academic progress, and what happens if you're not. Whether you continue to receive federal financial aid depends, in part, on whether you make satisfactory academic progress.
  • If you're offered a federal work-study job, what the job is, what hours you must work, what your duties will be, what the rate of pay will be, and how and when you'll be paid.
  • The location, hours and counseling procedures of the school's financial aid office.

    Once you have a few different offers, there are several factors to compare. The U.S. Department of education offers several ways to compare your options.

    Does a College Savings Account Work Against Me?

    Unless you're sharing a tax bracket with Bill Gates, probably not.

    When calculating your Expected Family Contribution, colleges look at your family's income and assets. They also take into account how many other children you'll be putting through college, medical expenses and other factors.

    It's important to know that your family savings account will help -- not hurt -- your family's ability to afford an education. Savings will have little or no impact on your financial aid package. At most, each additional dollar saved results in a decrease of only a nickel's worth of financial aid -- leaving 95 cents devoted directly to the cost of your education.

    The Minnesota Private College Council suggests one easy way to save for college. Continue setting aside the monthly amount you once set aside for child care throughout the years your children are in the elementary grades and high school.

    Is It Too Late to Start Saving?

    It's never too late to save.

    Check your current finances to make sure you're getting as high a rate of return on your savings and investments as possible. Then take steps to make sure you are credit-worthy. If you're going to have to borrow, make sure your credit history is accurate and you haven't exhausted your borrowing capacity.

    Remember, even if you do start college next year, you'll be enrolled for four or more years. You don't have just one year to plan ahead; you have several.

    Where Do I Look for Scholarships?

    Information on merit-based aid can be difficult to get -- and even more difficult to wade through -- but it pays to dig deep, be careful and be persistent.

    Take the first step. Contact the schools to which you're applying for information on any merit-based aid available to prospective students. Then visit your public library, and scope out reference books with information on the many scholarships available from both public and private sources.

    In addition, some high schools, colleges and libraries have computerized scholarship listings that help students identify potential aid sources.

    Online databases also are a good start.

    Start with some big money-givers. The National Merit Scholarship Program, which awards aid based in part on PSAT scores, is a private scholarship fund that gives out more than $26 million each year. Westinghouse also gives more than $200,000 each year to students who compete in its science talent search.

    Ask your parents to check with their employers. Many companies offer college aid to their employees' children. You may be eligible for aid from your parents' trade group, fraternal or military organization -- or union.

    Check with local community organizations. The PTA, your church or synagogue, social clubs and businesses may give aid to local high school students. One of the best sources for information on community-based aid is your local newspaper.

    Look at sources that help a specific group of people. The Japanese American Citizens League, Lutheran Brotherhood, the American Architectural Foundation, and the American Association of University Women are just a few of the many organizations that help students in their interest group get aid.

    National Association of Financial Aid Administrators
    Scholarship and Fellowship Databases

    National Association of Financial Aid Administrators
    Other Types Of Aid

    Additional Resources:

    Guidance Online
    Financial Aid and Loan Information

    U.S. Department of education
    The 2000-01 Student's Guide to Financial Aid

    University of Wisconsin/Stevens Point
    Financial Aid IQ Test

    U.S. Department of education
    Financial Aid For Students

    College Board Online
    Services For Financial Aid

    Focus on Financial Aid
    Minnesota Higher education Services Office
    400 Capitol Square Building
    550 Cedar Street
    St. Paul, MN 55101
    (612) 296-9665

    With information from the College Board Online, the U.S. Department of education, National Association of Financial Aid Administrators and the Minnesota Council of Private Colleges.

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