Loans

Right now and in the coming months, you and your family will have a lot of questions about financial aid. It's important to understand how financial aid offices work so that you can foster the best relationship with their representatives.

Financial aid offices are not set up like admission offices. They are often less well staffed, and they have the college’s existing student body to care for, as well as applicants and their families. So financial aid officers walk many tightropes simultaneously. They are charged with meeting the demonstrated need of each family in a way that is consistent with their college's guidelines. Typically they have an institutional aid budget they must stay within, and the pressures related to this can be significant. They must also disburse federal and state funds in accordance with law so must keep up with an ever- changing array of rules and regulations. What's more, they are audited annually, and the stakes are high— if they have not done their jobs well and kept excellent records, their college can lose a great deal of money that will then not be available for students who need aid.

What does this mean for you? You cannot ask a financial aid officer to hold your hand. You need to do as much as you can to master the process, and call him or her with specific and informed questions. That is how you will obtain the best guidance.

College advisor Alice Kleeman is back with advice for seniors on what you should be doing to pay for college. Remember it is you, the student, who applies for aid. But families need to work together to obtain the best result. Here are this month's financial aid reminders:

*             Check with your high school counselor about financial aid evening workshops scheduled at your school or in the community and attend with your parents!  

*             Complete the FAFSA, reading all instructions CAREFULLY! You do NOT have to wait until you and your parents have filed your income tax returns; you may use estimates on the FAFSA and then update the information once you have filed your income tax forms. It is better to file on time with estimates than to file late!

*             Submit your FAFSA electronically as soon as possible! Once submitted, the colleges you have listed and coded will receive your information electronically.

*             Each state also has its own FAFSA deadline, which in many cases is different from the federal submission deadline each year.  Make sure to submit your FAFSA by your state's deadline or as soon as possible after the first of the year to get the most financial aid possible. Deadline information can be found here. 

A new study from Sallie Mae, How America Pays for College 2013, evaluates how families view and manage the cost of a college education today. Among the findings:

• Increasing optimism about the value of college. A higher percentage of parents than in previous years — 85% — express an unwavering belief that college is an investment in their child's future.
• A post-recession cost consciousness. Parent out-of-pocket spending has decreased 35% since 2010. Overall, parents now fund approximately one-quarter of college expenses, down from a peak of one-third.
• A growing reliance on grants and scholarships. “Free” money is filling part of the gap left by lower parental contributions.
• Larger student contributions. Students are funding more of the college bill through borrowing and savings/income than they did five years ago.

And for more analysis of the survey, see "Holding the Line" in today's Inside Higher Ed.

Diane Stemper, Executive Director of Financial Aid at The Ohio State University, returns today with the second of a two-part post on comparing financial aid awards so that students and their families can be wise consumers and better understand what they are being offered and signing on for. Yesterday Stemper laid out the vocabulary and content of financial aid award letters along with a step-by-step plan for comparing aid awards. You can see Part One of Stemper's post here. Today, she has more advice for students and families on understanding aid awards as smart consumers, as well as guidance for interacting with financial aid offices and a resource list for tools that can help families in the comparison process.

Be Aware:

·         Colleges may state they meet “full need” – sounds great, but how much of that is loans?

·         Are parent loans listed as part of the financial aid award?  If so, it may look like you have sufficient financial aid to meet your costs, but part of this could be debt that your parents are incurring on top of your own student loan debt.