Scholarships – Creative College Savings

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Evaluate and Compare Finanical Aid Award

Financial aid award letters provide information about grants, scholarships, loans and student employment. But there is no standard format so it is hard to compare.

FinAid

Award Letter Comparison Tool

Quick Reference Guide to Evaluating Financial Aid Award Letters

Advanced Award Letter Comparison Tool – comparison to include issues other than money

 

Attention: All Seniors and their Parents – What are Cal Grants?

Cal Grants are free money for college that is awarded to student who meet eligibility, income and academic requirements.  The money can be used to attend any California Community College, Cal State University, University of California, private college, and most technical or vocational schools.

“To be considered for a Cal Grant award, you must complete both of these requirements:  First a 2011-2012 Free Application for Federal Student Aid (FAFSA) must be completed with the Federal processor at www.fafsa.ed.gov by the March 2, 2011 deadline.  Second, you must ensure that a certified Grade Point Average (GPA) is submitted to the California Student Aid Commission by March 2, 2011.”

Some high school may electronically submit GPA’s to the California Student Aid Commission for seniors so just check with your counseling office.  You need to fill out and return the “Cal Grant GPA Information Release Form” to the Counseling Office, by certain deadline.

For additional information on Cal Grants/FAFSA, please check the Student Aide Commission Website: www.calgrants.org

 

Report Shows Increases in Tuition and Federal Aid

Report Shows Increases in Tuition and Federal Aid

  • public four-year colleges and universities raised in-state tuition and fees an average of 8% during the 2010-2011 school year. However, students are receiving record increases in federal grant aid to compensate.
  • public four-year colleges and universities have increased at an average annual rate of 6% beyond inflation over the past 10 years, compared to 3% at public two-year colleges and 3% at private nonprofit four-year institutions.
  • largest increase in Pell Grant history led to $28.2 billion in grant aid for 7.7 million students during the 2009-2010 school year, which is an increase of almost $10 billion from the previous year.

The Problem with Financial Aid – “need blind” or “need sensitive”

The Problem with Financial Aid by Daniel Luzer | Washington Monthly

But a college can’t keep offering more and more generous financial aid if the institution lacks the cash to keep up with its own higher pricing. And that’s the problem many of them have; their investments simply aren’t paying out the way they used to.

So many colleges are compromising. They used to be need blind and promise to meet need. But now Colorado College is “need sensitive,” which means the school considers if the student can pay when making its admissions decision. At Embry-Riddle Aeronautical University the school tells students who can’t afford the university not to come, or to come later.

Paying for College (When you haven’t saved enough) – Steve Cohen – Admissions – Forbes

Paying for College (When you haven’t saved enough) – Steve Cohen – Admissions – Forbes

Financial Aid is Available

It absolutely helps to befriend a live person in the financial aid office early in the process.

The Relationship Between Admissions and Financial Aid

Admission decision is completely separate from the family’s ability to pay for it — the process is known as need-blind admissions.  Look for that phrase on the college’s admissions web page.  Every school is candid about its process.  If a school is not need-blind – wealthier schools typically are – asking for financial aid can have a small negative impact on a kid’s chances of admission.

“Expected Family Contribution”

Let’s say you earn $150,000 and have $150,000 in non-real estate assets.  Your expected family contribution will be $19,500 per year/child for private college; and $25,400 per year/per child for public universities.

Colleges “Meet the Need”

Read on a college’s website – that the school tries to meet all demonstrated need.  Or you’ll see a statistic about the percentage of need met.

The Financial Aid “Package”

The financial aid package is typically comprised of three things: scholarships (or grants;) loans; and work study.  Work-study is typically less than 10% of the overall tuition charge, and involves Sam taking a campus job – in the dining room, the library, etc.

Merit scholarships – to attract academically-talented kids to their campus

Scholarships are outright grants and do not have to be repaid. It is essentially a discount off the college’s list price.

The loans come in a variety of forms and sources, with many emanating from the Federal government.  Stafford, Perkins, subsidized, unsubsidized.

The Process

There are four basic steps:

  1. Tell each college you want to apply for financial aid.  Typically the admissions application has a box to check off.
  2. Submit whatever college-specific forms the school demands.
  3. Complete the on government’s online FAFSA form.
  4. Complete the College Board’s CSS Profile forms.  (Most private colleges require this special application to be eligible for financial aid from that school.)  One submission to the College Board covers multiple colleges; but a separate fee has to be paid for each.

Your kid has to complete her own FAFSA; you will have to get multiple passwords and PIN numbers; and you’ll be navigating through several look-alike, non-communicating government websites.   And make sure you have every tax document you submitted last year when you complete the forms.

Meeting the Expected Family Contribution: Parent Loans

Parent Plus loans are government-backed, moderate-interest rate loans that are made to the parents while Sam is in college.  They don’t have to be repaid while she is in college.

Private Counselors


Federal Grants, Tax Breaks Help Reduce Tuition Pain – US News and World Report

Federal Grants, Tax Breaks Help Reduce Tuition Pain – US News and World Report

  • average published in-state tuition for full-time students at public universities rose by $470 to an average of $7,610 for the fall of 2010, the typical student ended up paying only $1,540 out of pocket
  • average private college raised its tuition by $840 to $27,290, but the average private college student actually paid $11,320 in tuition after scholarships and tax benefits were subtracted
  • full-time students at community colleges, where the average sticker price rose just $120 to $2,710 this academic year, typically got enough aid to cover all their tuition and another $670 for books

Main reason for the decline in net price:

  • since 2008, the maximum size of the federal Pell Grant has risen by $819 to $5,550
  • number of students who qualify for the federal grant has skyrocketed: 7.7 million Pells were awarded last year, up from 6.2 million in 2008, and 3.8 million in 1999
  • as a part of the stimulus, the government created the $2,500 American Opportunity Tax Credit, which was claimed by about 12 million families last year

About a third of the full-time students, or about 3.8 million people, didn’t receive scholarships or tax benefits, and so paid sticker prices