Understanding Financial Aid Is More Important Now Than Ever

Understanding Financial Aid Is More Important Now Than EverIf you will be a high school senior in the fall, you probably already realize that the college application process will not be like anything ever encountered before. The COVID crisis brought your junior year to a screeching stop, and put an end to pre-college planning activities. No college recruitment fairs, no college trips, no in-person meetings with college reps – just a whole lot of nothing to get you in the college spirit.

While colleges are still finalizing what college will look like for freshmen and returning students this fall, you have to plan ahead for college in the fall of 2021. Although that seems far away, and maybe even unimaginable given today’s circumstances, you must still move forward as though you plan to enter the college class of 2025. It is definitely not too early to work on your college plans. In fact, you might already be a bit late.

Surprising as it seems, most colleges start moving forward on the next year, even as they are settling students in for the current year. That means you have to be ready to complete the FAFSA for the 2021-22 college year beginning October 1, and be prepared to submit college applications this fall for early decision or early acceptance. And that really is not a lot of time.

One area of the college application process that will be more important than ever before is learning about financial aid opportunities. In past years, this might not have been as important as it now. Some families did not even bother to complete financial aid applications. But, all bets are off this year, as most families are in a vastly different financial situation.

Jobs, businesses, the stock market and financial plans have all been upended, so you might not be able to count on support from your family as much as you could have in the past. That means you need to learn about financial aid, and you need to do it now. Here are some financial aid basics you will need to understand as you move forward:

• There are different types of financial aid: Financial aid can come in many forms – some of which you will have to repay, and some you will not. Grants and scholarships are a great way of finding money. They come from the college and many other sources, and do not have to be repaid if you continue to meet their requirements. You may also be eligible to participate in the Federal Work-Study Program, which gives you the opportunity to earn money towards your education. Student loans come from both federal and private sources, and do have to be repaid. Current federal student loan rates have been reduced, but look out for changes that may affect loan rates for next year. Other funds will have to come from your family’s personal financial resources.

• There are different deadlines: Understanding your financial aid deadlines is a must. There are separate deadlines for federal, state, and institutional financial aid applications which you will need to understand. Most start with the FAFSA (Free Application for Federal Student Aid), which is available beginning October 1. Information you submit will be based on your 2019 federal income tax return. If COVID changed your financial situation this year, you will need to submit supporting documentation to selected colleges.

• Scholarships are essential: College scholarships are the best way to find additional money to fill the gap between college costs and available funds. There are scholarships for just about every type of student interest and background, but you have to be tenacious and organized in your pursuit of them. Beginning very soon, we will offer the CFAA Scholarship Program to help you locate and organize crucial scholarship opportunities.

High school students graduating in 2021 are encouraged to sign up now to receive in-depth and personalized financial aid counseling from CFAA to help clarify their college search. For ongoing information, be sure to look for my weekly JustAskJodi emails and tune in for my weekly Twitter chat at #CollegeCash every Thursday at 5pm Pacific/8pm Eastern for the latest updates.