Financial Aid Options
By Ivy Brewer - Faculty
Applying to college can be an overwhelming process for both the student and the parent, and the financial aid process is often seen as a complex part of the overall process. However, it doesn’t have to be. Here is a quick rundown of the types of financial aid that are typically available for students applying to college. I hope it will be helpful to you as you begin the process.
Need-Based Financial Aid
Need-based financial aid, as the title suggests, is based upon demonstrated financial need to cover the portion of fees between what the family is able to pay and the total cost of education (tuition, fees, room and board, books, supplies, transportation, and some personal expenses). The needs-analysis systems work under the principle that parents and students bear the primary responsibility for financing education to the full extent that they are able; families are expected to make sacrifices in order to pay for college.
There are two formulas used to determine eligibility for financial aid. Federal Methodology is used to determine eligibility for all federal grants and loans as well as most state aid. Institutional Methodology is used by many colleges and universities to award their own funds and considers some financial information not taken into account by the Federal Methodology.
The single most important factor in determining aid eligibility for most families is parental income. Other factors include non-discretionary expenses (such as taxes, medical expenses, and basic living expenses), parental assets, student assets, and the number of children attending college.
Documentation of financial information is required including federal tax forms, W-2 forms, Divorced/Separated Parents’ Statement, and the Business/Farm Supplement. Copies of supporting documents are sent directly to the schools that require them.
Many schools do not offer funding for international students. Check with the particular school to which you will be applying to confirm. If an institution offers international student aid, such financial assistance is usually highly competitive, and awards may be based upon academic credentials and geographic diversity as well as need. Note that not all schools guarantee that they will meet the full need of every admitted applicant.
If you have any questions you should contact the financial aid offices of the colleges to which you are applying. Each financial aid officer knows his/her own school’s particular policies and procedures better than anyone else!
Merit Scholarships
College-sponsored merit scholarships are awarded based on academic achievement in general or in a specific discipline, geographic, ethnic, or racial diversity, a particular talent, extracurricular involvement, scholarship exams, etc. College-sponsored merit scholarships vary widely by school.
Merit scholarships are also available from a wide variety of non-school groups or organizations, including churches, clubs, corporations, and foundations. You are encouraged to explore such scholarship opportunities through the internet, library, etc. Beware of scholarship scams – you should never have to pay for a scholarship or for information.
For recipients of need-based aid, merit scholarships will be incorporated into the aid package. Legally, schools are unable to use the scholarship to reduce the federally-determined family contribution. Merit scholarships may be used to supplement the need-based aid package if it does not meet the student’s full need, replace self-help funds (loans and work study), and reduce the institutional grant.
If you receive notification of an outside scholarship, you must notify the financial aid office at the schools to which you have applied or to which you plan to enroll.
Other Financing Options
Many colleges offer individual payment plans, allowing monthly payments. There are also a variety of loans available, including home equity loans. You are advised to discuss you particular options with a financial planner or with the financial aid administrator at the college at which you plan to enroll.
