Top 10 Questions Parents Ask Regarding College Financial Aid
by Doris Constantine
Associate Vice President, Office of Student Financial Services
Q. How can we afford the higher cost of a private college?
A. Don’t let the cost of a college keep your student from exploring a school he or she is truly interested in. Your student may be eligible for financial aid and scholarships that will bring the cost of tuition into your price range. In fact, your out-of-pocket costs at some state universities and out-of-state public universities can be the same or higher than your costs at a private college. (Private schools often offer more scholarships and grants than public schools.) So look carefully at the financial aid each college can provide your student and how it affects the total costs (tuition, room and board, fees, books, transportation, etc.) of attending.
Q. What type of financial aid is available?
A. Financial aid takes many forms that fall into three categories: merit-based, need-based and supplemental aid. Your student may be eligible for scholarships, grants, loans and work-study when he or she applies. Scholarships and grants do not have to be paid back. Loans must be repaid.
• MERIT SCHOLARSHIPS – These awards are based on high school performance and SAT/ACT scores.
• SPECIALTY SCHOLARSHIPS – These awards are based on superior achievements in athletics, the arts, ROTC, community service or other areas of noteworthy accomplishment.
• GRANTS – This financial assistance is based primarily on income, family size and asset information. It can be offered by a university or by the government.
• LOANS – Most student college loans offer low, fixed interest rates and flexible repayment terms.
• FEDERAL AND STATE WORK-STUDY – This program provides part-time university employment.
• LOANS – A number of supplemental educational loan programs exist to allow families to borrow up to their student’s full cost of attendance.
Q. Can we find out how much aid colleges will offer before my student applies to them?
A. Yes. Every college is required to provide a Net Price Calculator on their website that gives you an estimate of the total cost of their school in a single academic year. Net Price includes tuition, room and board, and other expenses minus the amount of scholarships and grants your student may receive. (Remember, scholarships and grants do not have to be paid back.) Some calculators also estimate student loans you may qualify for. Financial aid is formally awarded only after your student applies, is accepted to the school and submits the FAFSA. Try our easy-to-use Net Price Calculator.
NOTE: To make sure you compare apples to apples, look for the upcoming academic year’s tuition to be reflected in each school’s Net Price Calculator. Schools have different cycles for updating their calculators, and some may be out of date.
Q. What’s the best way for my student to find scholarship opportunities?
A. Your first resource for scholarships is the colleges your student applies to. Most schools offer freshman scholarships for high-academic achievers. For example, high school seniors who apply to St. Edward’s are automatically considered for academic scholarships of $7,000–$20,000 annually. Colleges also offer other merit-based aid that may apply to a student’s special interests, talent or background.
In addition there are thousands of scholarships offered by outside sources, such as employers, individuals, private companies, nonprofits, religious groups and other organizations. Your student’s high school guidance counselor can provide resources and point you to free web tools that can help you find scholarships. Be aware that you should never have to pay to find scholarships or financial aid information.
Q. What’s the first step in applying for student financial aid?
A. Start by completing and submitting the Free Application for Federal Student Aid (FAFSA). Nearly all colleges and universities use the FAFSA to determine eligibility for federal, state, and college-sponsored financial aid, including grants, educational loans and work-study programs. The FAFSA is available online beginning Jan.1 of your student’s senior year. You can access it, and also download a handy FAFSA Worksheet, at fafsa.ed.gov.
NOTE: To apply for financial aid at St. Edward’s, you only need to submit the FAFSA. However, some colleges require additional forms or applications for aid along with the FAFSA. Check with each school’s financial aid office for specific requirements.
Q. How do we begin filing a FAFSA?
A. First, get an FSA ID at fafsa.ed.gov. Your FSA ID is a four digit number issued to you by the U.S. Department of Education that allows you to complete and sign your FAFSA electronically, and check the status and make corrections to it online. Students and parents must apply for separate FSA IDs. You’ll use your same FSA ID throughout your student’s college career to complete the FAFSA and access your records, so file it in a safe, convenient place.
Q. When should we complete and submit the FAFSA?
A. The earlier, the better. Financial aid is limited and awarded on a first-come, first-served basis. Your student should submit the FAFSA as soon as possible after Jan. 1 of his or her senior year. You can submit the FAFSA before you file your taxes and add the updated information later. Be sure to include each school’s federal code in the school release section, (for example, our code is 003621), and record the confirmation number you’ll get when you file your FAFSA. See step-by-step details on filing the FAFSA.
Q. Do colleges have deadlines for their best financial aid offers?
A. Yes, and they vary. So check with each school for their exact admission and FAFSA deadlines. At St. Edward’s, Feb. 1 is the priority deadline for admission and March 1 is the priority deadline for filing your FAFSA. Meeting these deadlines ensures you’ll receive our best possible financial aid package. Once your student has been accepted to a college and the school has received your FAFSA, they’ll send your student a financial aid award letter that details the aid he or she is eligible to receive.
Q. Will the same financial aid my student receives as a freshman be awarded automatically in his/her sophomore, junior and senior years?
A. This is an important question to ask each school. At St. Edward’s, your student’s first year of financial aid becomes his or her base offer for subsequent years. Normally, your student can receive a similar grant package for three additional years. However, your student must file a new FAFSA each year and meet certain academic requirements to continue receiving funding.
Q. What if our family’s income is too high to qualify for need-based financial aid, or too low for aid to make much difference?
A. Financial aid is intended to help make college affordable for students from many different situations. Along with income and certain assets, financial aid counselors consider the number of household dependents and family members in college, medical and disability expenses, and other factors. Schools have different criteria for awarding aid, and their offers can vary greatly. So don’t rely on just one school for your definitive financial aid offer.
Regardless of income, your student should complete and submit a FAFSA. Most families are eligible for multiple types of aid and are often surprised by the amount of aid they can receive.
Q. Do we have to accept any student loan offers?
A. Families are not required to accept loan offers, but many feel they provide a means for students to help invest in their educational costs. Much like borrowing a loan to finance larger expenses like a home or car, many families choose to borrow through federal, state or private loan offers in lieu of other financing options such as higher interest credit cards or short term payment plans. Federal student loans offered through the FAFSA have low, fixed interest rates and provide a variety of flexible repayment options.
Expected Family Contribution (EFC) – This is a calculation based on the information you report on your student’s FAFSA. Your EFC is not the amount of money your family will have to pay for college. It’s a number used by colleges to calculate the amount of federal student aid you are eligible to receive. The calculation is based on a specific formula, which considers taxed and untaxed income, assets and benefits, the size of your family, and the number of family members attending college during the year.
FAFSA – The Free Application for Federal Student Aid (FAFSA) is the form used by the U.S. Department of Education to determine your Expected Family Contribution (EFC) toward your student’s college expenses. It’s used to conduct a “need analysis” based on financial information you provide, such as income, assets and other household information. Nearly all colleges and universities use the FAFSA to determine eligibility for federal, state and college-sponsored financial aid, including grants, educational loans and work-study programs. Learn more at fafsa.ed.gov.
FAFSA Priority Deadline – Most schools have a priority deadline for submitting your FAFSA, which is their cut-off date for determining their best financial aid offers. (For example, the St. Edward’s FAFSA priority deadline is March 1.) Because every school has a limited amount of financial aid to offer, students who meet this early deadline are most likely to get the best financial aid package. Of course, those who submit FAFSAs after the priority deadline are still considered for financial aid, but it may be a lesser amount than if they had met the deadline.
FAFSA Worksheet –The FAFSA Worksheet helps you collect and organize your financial information needed for your student’s FAFSA. You can download the worksheet at fafsa.ed.gov. This worksheet is not the financial aid application, nor is it part of the application. It is merely a handy guide that prepares you to complete the FAFSA online.
Financial Need – Need is calculated by determining the difference between the school’s overall cost of attendance and the family’s EFC. Accordingly, many families will demonstrate greater financial need at a private college or university than at a public one.
Grants – Student grants are a form of financial aid for college students based solely on financial need. The money can be used to pay for tuition, fees, room and board, books and other college expenses. Like scholarships, grants do not have to be paid back. Student grants are available from federal programs (such as the Pell Grant and the Supplement Educational Opportunity Grant) and state programs (such as the Texas Tuition Equalization Grant) as wells as colleges and private entities. For example, St. Edward’s provided more than $12 million in freshman grants in 2014–2015.
IRS Data Transfer – Families who have completed their federal tax returns prior to submitting the FAFSA should take advantage of the IRS Data Transfer when completing their application online. This process allows the family to transfer parent and student income figures directly from the IRS to the FAFSA, making completion of the application that much easier. Families who file using estimated tax information can also use this tool after they've filed their taxes to update their student’s FAFSA with actual amounts.
Loans – There are several types of low-interest student loans: federal, state and private. Unlike scholarships and grants, loans must be paid back. Federal loans, such as the Federal Direct Student Loan and the Federal Direct Parent PLUS Loan, generally offer lower, fixed interest rates and the most flexible repayment plans. Student financial aid counselors are very knowledgeable about the range of student loans and can help your family determine the best options. Repayment can be deferred until after graduation.
Out-of-Pocket Costs – This is the actual amount your student will pay for college. It includes the total costs to attend minus your student’s scholarships and grants — money you don’t have to repay.
529 Plan – This education savings plan is designed to help families set aside funds for future college costs. 529 Plans are operated by a state or educational institution and offer federal tax breaks that allow your investment to grow tax-free and be withdrawn tax-free to pay for your student’s college costs. The funds can be used for in-state or out-of-state schools. The Texas Tomorrow Fund is a 529 Plan operating in Texas that offers two college savings plans: the Texas Tuition Promise Fund and the Texas Guaranteed Tuition Plan.
There are important details to understand about a 529 Plan, such as how it affects financial aid (the value of a parent-owned plan must be reported as an asset on the student’s FAFSA). And different 529 Plans have different features. Contact your plan to find out how to access your funds.
Pell Grant – This is a Federal grant provided to help pay for college. The grant amount is determined by a student’s FAFSA and depends on financial need, costs to attend school, and status as a full-time or part-time student. Not all families qualify for this particular award since eligibility is primarily based on income and assets.
Scholarships – Student scholarships are most often a merit-based form of financial aid, and they do not have to be paid back. Scholarships are awarded based on academic achievement or a combination of academics and a special talent, trait or interest. The money can be used to pay for tuition and fees. Scholarships are typically offered by colleges and private entities. For example, St. Edward’s provided more than $7 million in freshman scholarships in 2014–2015.
Student Aid Report (SAR) – After submitting the Free Application for Federal Student Aid (FAFSA), your student will receive a SAR that shows the information you entered on the FAFSA and your student’s eligibility for federal student aid.
Tuition – College tuition is the "sticker price" of your education and does not include room and board, books or other fees. The total cost for college includes all other expenses on top of tuition.
Verification – About one third of all FAFSA filers are required to validate their reported income figures, either by transferring data from the IRS to the FAFSA application or by providing tax transcripts to the college. For these families, some schools may wait to provide the student an aid offer until the verification review process has been completed.
Work-Study – Federal Work-Study provides part-time jobs for college students with financial need, allowing them to earn money to help pay for personal living expenses. The program encourages community service work and work related to the student’s course of study. Jobs can be on or off campus, and hours are limited by the student’s total work-study award. St. Edward’s also offers numerous on-campus job opportunities for students who do not receive or qualify for work-study.
In my 40 years of guiding families through the financial aid process, I always begin with this advice: Start learning about the process early. The more your student and you know about qualifying for scholarships and aid, the better you can plan.
Another important step is to meet with a college financial aid advisor to discuss your eligibility and needs. At St. Edward’s, your personal advisor will work with you — throughout your student’s college career — to identify all of the scholarships, grants and loans your student qualifies for, and walk you through the application process.
To help you learn more, we’ve compiled answers to 10 questions we hear most often from parents about financial aid and a useful glossary of terms. See them below.
We encourage you and your student to contact firstname.lastname@example.org with your questions. We’re here to support you and provide answers!
Associate Vice President, Office of Student Financial Services