The financial aid package has just arrived in the mail from your dream school but with a slight problem – you still owe money. Where are you going to find it?
When looking at your financial aid package, all of the numbers and figures may be slightly intimidating. In fact, it is a lot of math. Financial aid is calculated based on numbers and income statistics provided on a number of documents, including institutional financial aid applications and the Federal Application for Financial Student Aid (FAFSA). If, between expenses and aid, the numbers don’t add up to zero, there are some ways to help balance the equation before moving into the dormitory.
One of the most common ways to pay for college is through scholarships and grants. Both awards are very similar but vary in purpose from institution from institution. Scholarships are usually awarded to students based on academic achievement or merit, while grants are usually based on other qualifications, such as geographic location or financial need. Both of these awards are considered “gift aid” and do not have to be paid back after graduation.
There are many places that students can look to in order to find scholarships and grants. Labor unions, employers, and churches often offer scholarships to members and their dependents. Other places include historical societies, veteran’s groups, government agencies, and endowment funds.
A helpful resource is the website Fastweb, an online database of thousands of scholarships, grants, and many other opportunities for those who are looking for financial aid. Based on your age, economic status, and many other factors, Fastweb will search its database for awards for which you are eligible and provide profiles with information about the scholarship.
High school students may also have access to scholarship information through their guidance counselor or career counselor’s offices. Sometimes, high schools keep records of local scholarship opportunities, as well as regional and national scholarships that past students from that high school have received. Additionally, high schools themselves, along with booster programs for music, theater, and athletics, may also offer small scholarships to participating students nominated by the booster programs, by fellow students, or who have been selected via an application process.
Merit vs. Need-Based Scholarships
Students can also be awarded scholarships and grants for a variety of different reasons. For those who are musically talented, participating in a college or university’s music ensembles may entitle them to a participation grant. At some colleges and universities, students in majors where an audition or a portfolio is a part of the application process may also be awarded scholarships based on their talents and skills presented in portfolios and auditions. These scholarships and grants are considered merit-based financial aid and, if a student fails to meet the terms of the scholarship, can lose this money if they do not continue to participate in ensembles, change majors, or do not make satisfactory academic progress.
The other main form of scholarships is need-based scholarships. These scholarships are awarded to students who demonstrate financial need in order to pay for college or, in some instances, awarded to students who come from certain socio-economic backgrounds that have high college drop out rates, such as first generation college students or those from certain minority groups. These awards are based on financial data received throughout the financial aid application process, as well as other data collected about the student.
Federal loans come in two forms: the Stafford Loan and the Parent PLUS Loan. Both of these loans often come packaged with grants, scholarships, and other aid that an institution awards a potential student for a given academic year. Payments on these loans do not begin until six months after the student graduates or leaves school.
Stafford Loans come in two forms, subsidized and unsubsidized. A subsidized loan is one in which interest does not collect during the grace period, while an unsubsidized loan does collect interest beginning when the student begins the six month grace period.
If a student plans on attending graduate school, however, students should be careful with the amount of money they borrow through the Stafford Loan program. The government has a limit of $138,500 that can be borrowed in loans, with a maximum of $65,500 of it being in subsidized loans. The total includes the amount borrowed for undergraduate and graduate studies, so be careful when planning for future studies.
The Parent PLUS loan is available to parents of dependent students and is also often a part of a student’s financial aid package. This is a federal loan for parents to help finance a child’s higher education or for graduate students looking for finance an advanced degree. Parents or students apply for this loan through the college or university using the Direct PLUS Loan Application, which can be found on most schools’ financial aid website. The maximum amount that can be borrowed under the PLUS loan program is the cost of attendance for the year, minus any other aid that the student may receive.
Federal Work Study
The Federal Work Study (FWS) program provides schools with federal funds to pay student employees for part time employment. The amount of money that a student may earn is dependent on information from a student’s Federal Application for Financial Student Aid (FAFSA.) The program requires that institutions pay student workers at least minimum wage, be paid hourly, and receive a paycheck at least once a month. The amount of money and the number of hours that a student may receive depends on a student’s academic progress, the amount of money awarded, and the student’s schedule. A student cannot earn more money through FWS than what is awarded for an academic term. Afterwards, colleges and universities typically regard hours as Regular Student Employment (RSE) hours and wages.
Financial Aid Office
If there’s nowhere else to turn, contact the college or university’s financial aid office. Students are usually assigned a specific financial aid counselor within the office to help them with concerns or to provide them with additional resources to finance their college education.
Many colleges and universities also have a private loan program for students to borrow money from private banks, alumni, or through the institution itself. Financial aid counselors may also be able to alter promissory notes for loans in the event of a drastic change in a student’s financial situation, such as the death of a parent/guardian, divorce, or sudden unemployment.
For emergencies, students may also have access to emergency college financial aid plans that a college or university offers to students who find themselves suddenly unable to pay tuition bills. These plans may include institutional loans with extended repayment plans, modifications to existing federal student loans, and financial aid award modifications during the academic year. Plans vary from school to school, so students who find themselves faced with a financial emergency should contact their financial aid office immediately.
Above all, a college education should not be put on hold due to finances. Gift aid such as scholarships and grants, loan programs, and FWS are just a few ways to finance a student’s higher education expenses, an expense that can pay off as the student enters the professional world and start a career.