30 Jul Know These Financial Aid Terms
By October, most members of the high school Class of 2022 will be busily ensconced in the tasks of selecting a college and applying for the financial aid to help pay for it. Financial aid can be a confusing world. Making the wrong decisions could increase the amount of out-of-pocket money you pay for college, or negatively affect your college choice altogether. Parents and students are often perplexed by the amount of jargon used in financial aid. To reduce misunderstandings, these are some of the most important financial aid terms you need to know:
- FAFSA (Free Application for Federal Student Aid): The FAFSA opens the door to numerous federal, state, institutional and scholarship financial aid opportunities. It comes online October 1, and every family should complete it as soon as possible. The FSA ID is a username and password that provides access to Department of Education information, and allows you to sign your FAFSA electronically.
- CSS PROFILE: This is an alternative financial aid application used by many colleges to provide more insight into a family’s financial situation. One specific area it explores is the financial status of the non-custodial parent in cases of divorce or separation. There is a fee involved for sending information to colleges, but this may be waived in certain circumstances.
- Supplemental Financial Aid Applications: Some colleges require additional applications, and some states have their own application process. Review college and state websites carefully to determine specific requirements.
- Deadlines: Application deadlines are dates set by colleges by which students must apply for early decision, early action, or regular admission. Financial aid deadlines may be different from application deadlines, and may vary for the college and the state. Scholarship deadlines are set by the individual scholarship provider. Check websites carefully to nail down all deadlines.
- Cost of Attendance: This is an estimate of total tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses. The Net Price Calculator from the Department of Education also provides a good estimate of costs at the various colleges on your list. There are ways to decrease costs and increase income, but these estimates provide a good starting point.
- Student Aid Report (SAR): This is a summary of the information provided on your FAFSA. It includes an Expected Family Contribution (EFC), but this is not necessarily the amount your family will be required to pay. Information is used by each college to determine individual financial aid award amounts.
- Award Letter: If your student is accepted into a college, you will receive a financial aid award letter detailing the amount of grants, scholarships, and student loans your student might be eligible to receive. You may be able to negotiate the amount of the award, and you do not have to borrow all the student loan money that is available.
- Federal Work-Study Program: This provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. It encourages community service work, and work related to the student’s field of study.
- Student Loans: This is money that is borrowed to help pay the cost of college. There are federal and private student loans available, with different interest and repayment options. Student loans have to be repaid, and should not be incurred without serious thought as to financial consequences.
AUGUST CFAA APPOINTMENTS: August is a very busy time for CFAA students. I am setting two types of appointments now. Slots are limited, so please plan accordingly:
- Loan Appointments for students attending college this fall.
- CFAA College List Zoom Meeting for students attending college next fall. This is a meeting to review your list of colleges, determine application priorities, and outline financial aid requirements. Parent and student will need to attend.
CFAA is here to help with every step of the financial aid process Set up a CFAA new client free strategy session to learn more about finding ways to pay for college. To get the latest financial aid information and college application to-do lists, look for my weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.