With our current economy, it is hard to pay for college and frustrating to search for affordable schools. U.S. News provided these factors for low-to-middle income students to consider when researching schools.

1. Low sticker price colleges. Community colleges and public universities in your community are usually priced less than private colleges and universities.

2. Meet full needs colleges.  These types of schools promise to provide enough scholarships and grants to all regularly admitted students, to help them avoid debt. These colleges do not carry over this promise to international students or wait-listed students. Each school defines a students need differently. Schools may expect students to borrow a certain amount of money each year, or make a certain amount of money each year from summer or part-time jobs.

3. Need-blind colleges. These types of schools, like public colleges and universities,  accept students based on their academic qualifications and not their need for financial aid. However, most public schools can’t afford to cover all the financial aid that their students need.

4. Colleges with high percentages of low-income students. Colleges who accept a majority of students receiving Pell Grants (usually meaning students coming from families earning below $45K a year) provide extra financial counseling and support.

5. No loan colleges. Some colleges promise no-loan packages, which offer bigger scholarships and earnings opportunities to students from low-and middle-income families. However, many students find they still may need to borrow to meet their expected family contributions which are determined by the FAFSA and schools.  

6. Merit aid colleges. These schools will give out merit scholarships to students who raise the student body’s grade point or test score average, raise the competitiveness of an athletic team, or find a spot in the school band, for example.

7. Military academies. Students interested in the military won’t have to pay for school – but in return they are required to pay for their education by serving their country in the armed forces.

For more information on Financial Aid:

Financial Aid

Many parents fill out the FAFSA for their children. According to The College Solution blog, here are some common mistakes that parents make when filling it out:

1. Don’t leave answers blank. Leaving blanks on your form can cause miscalculations, and the application could possibly be rejected. If your intended answer is zero, write “0”.

2. Double check your Social Security and driver’s license numbers. Make sure you have written the correct numbers – even one wrong digit can mess up the entire application.

3. Don’t enter the wrong income tax information. Make sure you enter the federal income tax you paid (or will pay) based on the 2009 federal tax return. Do not enter the tax withholdings on your (or your spouse’s) W-2 forms.

4. List your current marital status. You need to state what your marital status is on the day you fill out the FAFSA – whether you are married, separated, or divorced.

5. Don’t include retirement assets. The FAFSA asks about how much money you have in cash, checking, and savings accounts. It does not ask about your 401 (k), IRA, or other retirement accounts you have – so don’t include this information!

6. List colleges your child has applied to. You are able to include up to 10 colleges that your child has applied to – but you will need each college’s Federal School Code. The federal processors will send the relevant FAFSA information to the schools you have listed.

7. Don’t exaggerate your education. If both parents didn’t graduate from college, don’t list “college” as the highest level of education – even if they did attend some college courses over the years. There are many schools that favor applicants who are considered first-generation college-students.

8. Home equity is irrelevant. The FAFSA doesn’t ask if you own a house (or second home, or real estate investments…), so the value of your house does not matter.

9. Retirement accounts are irrelevant. The FAFSA doesn’t ask about your retirement accounts – so your chances for financial aid help aren’t affected by how much money you have saved up in these accounts.

For more helpful information regarding the FAFSA visit:

• Other Common FAFSA Mistakes

Here are some of today’s financial aid news stories:

Students in race for state’s college financial aid funds

The Chicago Sun Times reports that financial aid applications are being filled out quickly, since students are afraid of  being shut out from state aid. More than 180,000 Illinois students filled out financial aid forms in January and February, which is 21 percent more than those two months last year. Last year, Illinois ended up denying financial aid applications that were submitted after May 15, which was the earliest cutoff date in history. Because of this, more than120,000 eligible students didn’t get a dime of financial aid for the fall semester.

College acts to disregard fiscal needs in admissions

The New York Times reports that Hamilton College (a small liberal arts college in Clinton, NY) is adopting a need-blind admissions policy. This means that they will consider applicants regardless of their ability to pay. Previously, some students were admitted to Hamilton College partly because they required no financial aid, and others were rejected from the college because they did. Over the next four years, Hamilton expects to add about $2 million to its annual financial aid budget. Full tuition, room and board, and other fees to attend Hamilton total nearly $50,000 per year, where the average financial aid award is about $32,500.

Don’t put off applying for college financial aid

Buffalo News reports that financial aid will be in high demand again this year, so students need to fill out their financial aid applications quickly. Financial aid applications for the The University of Maryland-College Park are up 12 percent from last year, although federal funding for work-study and certain education grants has been cut down.

Don’t wait till the last minute to fill out your FAFSA! Fore more financial aid information, check out:

• FAFSA
• Common FAFSA Mistakes

Do you need help filling out the FAFSA, or have questions regarding the financial aid application process? Here are 4 financial aid resources which should help make filling out the FAFSA easier for you!

FAFSA on the Web

• The U.S. Department of Education’s FAFSA on the Web site has live online representatives who are available to help when you’re filling out the FAFSA, by hitting the “Live Help” button. Also, you have the option of speaking to a customer service representative by calling the FAFSA phone number: (800)-433-3243.

FAFSA on the Web Worksheet

• By downloading the FAFSA on the Web Worksheet, you will be able to gather all the required financial and tax documents ahead of time. It allows you to take a practice run at filling out the FAFSA, before you sign online to officially fill it out and apply. Also, by filling out the practice worksheet beforehand, you’ll have less of a chance of making errors on the real FAFSA.

College Goal Sunday

• College Goal Sunday is a non-profit program (sponsored in part by the YMCA) that offers personal FAFSA counseling at certain events throughout the country. Representatives are available at these functions to speak with you in person about your FAFSA or financial aid questions. Check out College Goal Sunday’s website to find a financial aid event near you.

TuitionCoach

• This financial aid website offers free financial aid webinars, and has step-by-step instructions on how to complete the FAFSA, as well as a Q&A session.

Source:  CBS MoneyWatch.com

The following 10 factors can and will affect an individual student’s chances at receiving financial aid, based on their specific school. It is important to find out how your school stands on determining financial aid offers. If you have questions or need clarification, ask your school’s financial aid office.

1. Your school’s policy on student loans
• Some colleges provide enough federal grants and work-study jobs to meet a student’s need
• Others schools will provide enough grants so that low-income students don’t have to borrow, while others students will have to take out modest loans
• Some schools even offer aid packages that include federal student loans of up to $7,500 a year

2. How your school calculates a family’s need
• Some schools are promising to provide enough grants to make sure families earning less than $180,000 pay not more than 10 percent of their income
• Some schools are promising enough aid so that the families only have to pay the expected family contribution (EFC) – which the school calculates based off the family’s income

3. How your school counts home equity
• Some colleges consider the equity parents have in their homes as a resource that should be tapped to help pay for college
• Other schools don’t consider equity of the parents’ home

4. The effect of the financial aid application on your chances for admission
• Some colleges reserve spots for students who can pay full price
• Other schools will meet the financial needs of their admitted students, and don’t consider a student’s financial aid application or their ability to pay when deciding about admission

5. Does the school offer merit scholarships?
• Some schools offer top students merit scholarships no matter what their expected family contribution is, or how rich their parents are
• Other schools do not offer merit scholarships

6. The school’s financial aid policy for international students
• Some schools will commit to meet the financial aid of noncitizens
• Other schools do not guarantee full aid for international students

7. The cutoff date for the meet-full-needs promise
• Some schools will only meet the needs of students who complete their aid applications on time
• Other schools commit to meet the need of those students admitted during the early or regular admission seasons and may run out of aid by the time they start admitting students off their waiting list
• There are some schools that say the timing of the application doesn’t affect the aid award at all

8. How the schools considers divorced parents
• Some schools analyze the incomes of both stepparents and birth parents to make their own judgments about which set of parents should be responsible for each student’s college costs
• Other schools only consider the incomes of the birth parents
• Schools that only use the Free Application for Federal Student Aid (FAFSA) consider only the custodial parents’ income when determining financial aid

9. The college’s expectation for student contribution
• Some schools provide enough aid so that students aren’t required to pitch in summer earnings
• Other schools reduce the student’s need and aid package by at least $1,000, saying that the student is expected to contribute that much each year from their summer earnings

10. What the college considers as its cost
• Some schools keep their cost low by providing small allowances for books or miscellaneous expenses
• Legally a college’s total cost of attendance is supposed to include tuition, fees, room, board, books, travel, and miscellaneous expenses for other necessities

Source: U.S.News, http://www.usnews.com/articles/education/paying-for-college/2010/02/18/will-you-get-enough-financial-aid-ask-your-college-about-these-10-factors.html

If you haven’t already, you should get a head start on filling out your FAFSA application. Each year, more than 16 million students apply for more than $100 million in student aid using the FAFSA, or Free Application for Federal Student Aid.

Vangent, a information management and strategic business solution company, announced that the “FAFSA on the Web” web portal received the highest citizen satisfaction score on the latest American Customer Satisfaction (ACSI) survey of U.S Federal Government 2009 news and information sites, according to a recent press release. Vangent co-designed, built, and helped operate the FAFSA web portal on the behalf of the U.S. Department of Education.

Vangent has been working with the Department of Education’s Office of Federal Student Aid (FSA) for more than 25 years, and in January 2010, they launched a new simplified form that includes text pop-ups, skip logic, and a IRS Data Match – a feature that automatically transfers and verifies application tax data with the IRA in real-time. Approximately 99% of all financial aid applications are submitted electronically via the FAFSA on the Web portal, which has greatly improved efficiencies.

The new and improved FAFSA on the Web portal has increased user satisfaction, as well as meeting the Obama Administration’s objectives to simplify the financial aid application process.

Don’t miss FAFSA deadlines!

• For the 2009-2010 year, all FAFSA applications must be turned in by midnight Central Daylight time, on September 21, 2010.
• For the 2010-2011 year, all FAFSA applications must be turned in by midnight Central Daylight time, on June 30, 2011.

More information on the FAFSA:

The Key to Filling out the FAFSA in 3 Steps

FAFSA

FAFSA, the Free Application for Federal Student Aid, is used to apply for financial aid from your school, state, or government.  The application deadline for federal student financial aid and state student financial aid may be different, and you may be required to fill out additional application forms.

The FAFSA needs to be filled out in order for you to receive federal aid, state aid, or school aid.

• School financial aid is given as loans, grants, or scholarships from the school you are attending (or wish to attend)
• State financial aid is given by the state you live in as loans or educational grants.
• Federal financial aid is given by the government as Pell Grants or Stafford Loans.

Federal Student Financial Aid deadlines

For the 2009 – 2010 school year (starting July 1, 2009, ending June 30, 2010), FAFSA online applications must be submitted by midnight central daylight time on June 30, 2010. Any corrections to the online forms must be submitted by midnight central daylight time on September 21, 2010.

If you apply for financial aid for the 2009-2010 school year (which we are currently in), you can use that aid to cover what you have already spent on schooling. This aid can also be applied towards any additional schooling or classes taken and completed before June 30, 2010.

For the 2010 – 2011 school year (starting July 1, 2010, ending June 30, 2011), FAFSA online applications must be submitted by midnight central daylight time on June 30, 2011. Any corrections to the online forms must be submitted by midnight central daylight time on September 21, 2011.

In order for you to actually receive financial aid, your school must have your correct and completed FAFSA information before the last day of your enrollment.

State Student Financial Aid Deadlines:

Most deadlines for state financial aid applications are different than the federal financial aid application deadlines, and will vary by each state. It is extremely important to check with your financial aid advisor to find out when these are so you don’t miss them! You can also check out http://www.fafsa.ed.gov/before003a.htm#state_deadlines for more details.

Since all financial aid – federal or state – is awarded on a first come, first served basis, it’s in your best interest to get all the FAFSA information you need to submit your application as soon as possible!

What’s one of the best ways to qualify for financial aid? Fill out the FAFSA.

Sallie Mae’s study, How America Pays for College 2009, found that nearly one in four families didn’t qualify for financial aid (federal grants or student loans) because they didn’t complete the FAFSA. They disqualified themselves solely on assumption! 30% of lower-income families did not fill out the FAFSA because they didn’t think that their family would qualify for aid. There is no excuse this year – the FAFSA has been simplified, the Department of Education has increased federal financial aid amounts, and the process is free. You have nothing to lose.

Edit 04/07/10: The San Francisco Chronicle recently reported that community college students in California are leaving up to $500 MILLION in federal financial aid on the table because they simply having applied for it.

Lauren Asher, associate director for the Project on Student Debt, recently told the LA Times, “…the people who are most likely to underestimate their ability to qualify for aid are the people who are most likely to qualify.”

The LA Times also reports that many low-income students limit their college search to community colleges and in-state colleges and universities, rather than high-priced private schools, because they assume they can’t afford it. The thing is, many distinguished (and high-priced) private schools often provide much more aid than less prestigious colleges, making them more affordable to lower-income families.

Zac Bissonnette of WalletPop (one of my favorite personal finance websites), offers caution:

That’s true for a very small number of schools: If your student is smart enough to get into Harvard, Yale, Princeton, etc., and you have a low expected family contribution, you will, in all probability, get something close to a free ride.

But after that, there’s a steep, steep drop-off. New York University graduates, for instance, leave college with an average debt load of $34,850, compared with just $14,541 for SUNY Binghamton grads.

What’s worse, over-reliance on financial aid can make students vulnerable to cuts, and, because of the complex way financial eligibility is calculated, options like working part-time or selling stock that has appreciated are often not practical because they decrease financial aid eligibility… If you pick a school with a low sticker price, your options for covering the cost are much less restricted.

At any rate, you won’t know what your options are unless you fill out the FAFSA. We’ll give you an update tomorrow on the FAFSA deadlines to be aware of.

Last week, A.R. wrote in asking:

Is it impossible for a U.S. citizen studying abroad to receive Pell or SMART grants?

In fact, it is not impossible. Universities and colleges are required by federal law to continue to disburse funds to eligible students participating in approved programs. Study abroad financial aid is widely available for U.S. citizens who want to expand their horizons and immerse themselves in other cultures. Financial aid for undergraduates who want to study abroad consists mostly of federal grants such as the Pell Grant and the FSEOG Grant, and federal and private loans:

• Stafford Loans, Subsidized and Unsubsidized
• Perkins Loans for exceptionally low-income students
• PLUS Loans for Undergraduate Students, which allows parents to borrow money to help pay for their child’s education as long as their child is a dependent, undergraduate student

Scholarships are also available from private organizations and sponsor companies.

David L. Boren Undergraduate Scholarships for Study Abroad provide scholarships to undergraduate students who wish to study languages and cultures considered to be important to U.S. national security and are underrepresented in study abroad. Students are not eligible to receive the Boren scholarship if they are studying in countries in Western Europe, Canada, Australia, and New Zealand. Deadline: February 10, 2010

The Benjamin A. Gilman International Scholarship Program provides awards for U.S. undergraduate students who are receiving Federal Pell Grant funding at a two-year or four-year college or university to participate in study abroad programs worldwide. Deadline: April 6, 2010 for Fall 2010 Semester

Phi Kappa Phi Study Abroad Grants are designed to help support undergraduates as they seek knowledge and experience in their academic fields by studying abroad. Deadline: February 24, 2010

The Global Studies Foundation provides funding for American students who are already studying abroad under the direction of an official study abroad program from an accredited university. Deadline: July 1, 2010

Every school and study abroad program varies though, so be sure to speak with your school’s financial aid adviser or study abroad faculty to understand the specific funding options available at your school. The cost of any study abroad program depends on many factors – your destination country and the length of your program, not to mention all the additional travel costs such as your passport, visa, airfare, immunizations, local transportation, meals, and books.

Perhaps most importantly, don’t forget that exchange rates fluctuate all the time, so your dollars may not have the purchasing power you think. A general rule of thumb is that the more expensive the school’s tuition, the more costly the study-abroad program. Also, the student who spends a lot of money on campus is likely to spend a lot more money overseas.

For more information, visit NAFSA, the Association of International Educators.

Are you nervous about your ability to afford your college education? If the recent survey by UCLA is a benchmark for a growing trend, it’s safe to say that two-thirds of you are concerned about affording college.

UCLA conducts a survey every year about the perceptions and mind-set of the country’s incoming freshmen classes. This year’s survey found that two-thirds of freshmen said they were either somewhat or very worried about their ability to finance their college educations. With tuition and fees up and employment down, the effects of the economic downturn seem to be hitting even the most starry-eyed and optimistic college student.

Concerns surfaced from family finances to the cost of tuition:

• 78% plan to pay for their first year of college at least in part from family resources
• 42% said cost was a “very important” factor in choosing which college to attend
• Nearly 67% of freshmen at four-year schools said they had at least some concerns about paying their tuition bills, more than any other freshmen class in the last 12 years.
• Financial aid played an important role in a college choice for nearly 45% of the freshmen

I think the the survey’s findings could actually be a good thing! Maybe these stats will shed some light on the need for students to consider the value they get out of their college education, and not just the brand name of the university or the obligation to attend a 4-year college when their career goals only require an Associate’s degree.

If two-thirds of students are worried, it could mean that they’re considering graduating in 3 years to save money. They could be applying for more scholarships. They could be going to community college. The other third could be setting themselves up for a lot of student loan debt.

Are you worried about affording college? What are you doing about it?