Answers to Your College Questions
Blog posts tagged in Financial Aid
I often have the chance to speak to parents whose children will soon embark on the path toward college. This can be a scary time no matter where the student comes from and especially if his or her parents have not had their own college experience. There is much to learn about the processes, the culture, and the financing of college and how to achieve the ultimate outcomes of a college career and a successful life after.
Try these tips that other parents have found interesting and useful:
Filing the FAFSA can be a confusing process, but never fear! Our college financial expert, Frank Palmasani, has the answers to your most pressing questions.
What is the FAFSA and what does it do?
The FAFSA is the official document used by the federal government to calculate your Expected Family Contribution (EFC). This EFC number is used by colleges to determine your eligibility for all need-based programs, such as federal grants, work-study employment, and student loans. It is also used by many state agencies to calculate your eligibility for state grants and by colleges to calculate your eligibility for college need-based grants.
It is that time of the year for parents of high school seniors to complete their FAFSA (Free Application for Federal Student Aid) for the 2014–2015 academic year.
There are two ways you can complete your FAFSA: using estimated 2013 tax information or exact 2013 tax information. If you plan to file your taxes in early February, I recommend that you wait to complete your FAFSA using actual 2013 tax information. However, if you are not likely to file your taxes until late February, March, or April, I would advise using tax estimates on your FAFSA, and returning to the form to make updates after your tax returns have been filed.
1. “How much can my family and I afford to pay for college each year?”
Unfortunately, many young people go about their college search as if financial aspects are a nonissue. These students are often disappointed in the end, when they learn that their number-one college choice is unaffordable. Determining the amount you and your family can afford before beginning your applications will prevent this and allow you to find a school within your budget.
2. “How can I use net price calculators to estimate the amount each college will cost me?”
Every college in the country has a net price calculator on its website. A college’s net price calculator helps you to estimate the amount you will have to pay, or your net price, at that school. Net price is defined as the sticker price minus any grants and/or scholarships provided. It is important to understand your net price because this price is what your family will actually have to pay. If it matches what you have determined you can afford, that school is a financial fit.
This will be an incredibly big week for college students and their parents, since it appears as though Congress will vote on the latest bipartisan proposal to solve the student interest rate issue. As of July 1, interest rates on subsidized student loans (those designed for the neediest students) increased from 3.4% to 6.8%.
If this increase is left as is, the current student debt crisis—a crisis that has been written about and discussed for several years now, a crisis that has seen student debt grow to more than 1 trillion dollars (surpassing credit card debt), a crisis that has led many young people to postpone major post-college life decisions, such as marriage, that they can’t afford, and that has led many other young people to forgo college altogether—will only get worse.