It's almost graduation season - high school seniors across the country are getting their acceptance letters and celebrating the future. Meanwhile, parents are looking at their financial aid awards and trying to figure out how they will pay for college.
With college costs rising every year, it is harder than ever to afford a top notch school. One of the key ways most students afford college is through financial aid - scholarships, grants, and, of course, student loans. All of these benefits are processed through the financial aid office of your student's college, and many students and parents use these resources each year.
As such, financial aid officers gain key insights into the process of paying for college, and they know things that the rest of us don't.Here are some revelations from real university financial aid officers that all college-bound students and parents need to know.
Working On Campus Can Hurt Your Financial Aid Awards
Campus jobs, like Resident Advisor positions, which offer free room and/or board, can affect expected family contribution and loan-based financial aid awards. After accepting a position that alters a student's total bill from the University, Federal Loans can readjust for a new, lower award amount, especially when reapplying in subsequent years. Instead of being a way to assist parents and students by covering a part of the total cost of college, students may, in fact shift that cost to the "expected family contribution" part of the ledger, so instead of qualifying them for a Direct Loan, it would instead be money that the parents would pay out of pocket.
Federal Grants May Not Be Worth The Time Or Effort
Federal grant money is a drop in the proverbial bucket when it comes to meeting the costs of college. The maximum award, available only to those who display the greatest need, is around $3,000 a semester. With fees, most four year colleges and universities cost more than double that award amount. The difference must then be made up by state based grants, scholarships, and loans.
Scholarships Can Be Worth It, But You Better Apply Early (Very Early)
Scholarships are a lot of work – but they can pay off for people who invest time early on. Most high school students understand that applying for scholarships is something you need to do early on, but students (and parents) who want a legitimate chance at those awards should begin applying as early as sophom*ore year. Apply early, and apply often – scholarship applications to private agencies and foundations require extensive leg work, but the payoff defrays the cost of books, fees or tuition. -Melissa Mecham, Ed.D, Vice President of Student Services and Financial Aid at City University of Seattle
Receiving Public Assistance May Restrict Your Options
Students who receive public assistance from a state agencyor claim a public housing address as their home addressmay, depending upon state laws, be restricted in their choice of majors and enrollment options. Students may be required to maintain a full time course load (usually 12 or more credits), or be enrolled in a degree-granting course that directly leads to an occupation, such as teaching or other vocation.
For community college students, this means enrolling in applied science associates programs, which focus less on liberal arts courses and more on vocational courses. The trouble is many of these programs do not offer a smooth transition to a bachelor's degree-granting program at a senior college.
Changing Your Course Load Can Lower Your Financial Aid
Students who drop a course and fall below full-time status will see their federal aid (and usually the state aid) retroactively adjust for the change in credit loads. If a student was receiving "full financial aid" and received a refund from their grant, they will then owe the difference in the aid. For Federal Pell Grant awards, the award received for full time is cut by 25% for students listed as three quarters time (9 to 11.5 credits) or half time (students listed as 6 to 8.5 credits).
This becomes a "balance owed", despite the aid award being intended to be used for education and education related expenses, including transportation (gas, cars, public transportation), rent, and food. With a "balance owed", students can no longer register for the coming semester, which may lead to attrition. Additionally, should a student be enrolled for 12 credits in order to maintain a 30+ hour a week job, the choice may come down to receiving an "F" in the class, or owing hundreds or thousands of dollars they don't have back to the school before they can register for the following semester's classes.
Financial Aid Officers Do Have Special Funds For Needy Students
Aid, awards, scholarships, and grants are available to those who ask. Most colleges and universities have some access to internal or external supplementary funding sources, especially for needy students. I always tell my students who believe they will not be able to enroll in classes due to financial hardship to ask the financial aid office, or the student services office, about any scholarship or grant money that isn't advertised. If the difference between retaining a student and losing them is a few hundred dollars, most colleges and universities, especially those in the private sector with alumni donors, are able to find a way to make ends meet - plus it can help them keep a higher retention rate to advertise for accreditation or marketing purposes!
This doesn't mean that the student won't be stretched thin, but the squeaky wheels who ask every office, including the faculty and staff in their major's departmental office, are the ones who are offered additional aid, access to scholarships, and private grant funds that become available for emergency and reserve cases.
You'd Better Show Up To Class And Your Professor Better Know It
Many schools may have different policies in place to enforce truancy and discourage abuse of the grant-based aid system (enrolling full time for the grants and then never attending class or skipping out after a few weeks). Withdrawals for non-attendance if a student doesn't attend the first few classes, or withdrawals for a string of unexplained non-attendance (usually 6-8 in a row) can drop them below full-time status, affecting their aid. Professor error can also lead to cases when a student was accidentally withdrawn from a course for no reason. Reversing this is not nearly as easy of a process as it is applying the withdrawals.
Make Sure You Understand What Impacts Your Financial Aid Qualifications
Sit down with a financial expert (higher education financial aid offices are a great place to start) to truly understand how financial contribution is calculated and you don't just fall for financial aid myths. For example, did you know that 20% of your student’s assets are considered available for college? That 5.6% of a parents assets are considered available to pay for a student’s college expenses? Or that home equity and retirement accountsaren’tassessed?
Did you also know that if a grandparent wants to help with tuition, it’s best to have them provide a loan rather than cash (cash is considered a gift, while a loan at current interest rates don’t factor in)? You can make your money work for you as you send your student to college, but sitting down with a financial expert is the best way to do it.
Now that you know these secrets, you can make better choices about financial aid for your student.
Robert Farrington is the founder ofThe College Investor, an online resource dedicated to helping millennials get out of student loan debt and start investing for their future. Follow@CollegeInvestin.
