Navigating the world of financial aid can seem daunting. The rules seem to change all the time. Everyone has heard horror stories of students who thought they’d be receiving a certain amount of aid being priced out of college. And while it can be complicated and you won’t always get what you expect, there are a few tricks that can help you make sure you’re receiving the aid you deserve.
1. Know your terminology.
While it’s not always consistent from school to school or state to state, having an understanding of the terms that will be thrown at you help keep you from accepting the consequences of a financial aid package you don’t understand. Understanding that there is need-based aid and merit-based aid, and that aid packages typically include loans, is a good starting place.
This website can help: https://studentaid.ed.gov/sa/glossary. And if you don’t understand, do a little research before making a commitment.
2. Fill out of the FAFSA.
That is, the Free Application for Federal Student Aid. You can fill it out here: https://fafsa.ed.gov/. EVERYONE SHOULD FILL OUT THE FAFSA. Even if you don’t think you’ll be eligible for aid. It can’t hurt to find out.
Fill it out every year, and try to fill it out as early as possible. Generally, you can fill it out as early as January 1 (Tip: You need your tax information to fill out the FAFSA. The most recent year is easiest to use, so file your taxes early!). Why fill it out early? There are more funds available earlier in the year. Because the financial aid system is complex, submit a new FAFSA every year, even if you haven’t had any significant financial changes. All kinds of things make a difference, and even a small amount of gain in aid is worth it, right?
It’s also important to send your FAFSA to several different schools. They can see where you’ve sent it, and it may inspire them to be a little more generous if they think you’re an ideal candidate.
3. Pay attention to net price versus net cost.
Simply put, net cost counts loans against the cost of attendance, and net price only counts scholarships and grants, i.e. money you won’t eventually have to pay back.
It can be easy to look at a net cost that seems low and think you’re getting a great aid package that results in a low out-of-pocket cost. However, if 50% of that aid is student loans, even low-interest loans, it’s possible that another school is offering a better package.
4. Careful about loans.
Loans can be great. In theory, earning power increases with a college degree, and by the time you have to start paying back those loans it’s very possible that you’ll have a full-time job and you’ll be able to factor them into your budget. However, all loans are not created equal.
Private loans can seem appealing because they are sometimes able to offer greater amounts than Federal loans. But they come with a catch. Most private loans require a co-signer. If you’re a parent, you need to co-sign with complete understanding that if your child can’t or doesn’t pay back this loan, it quickly becomes your responsibility. And private loans typically aren’t flexible or negotiable later. The payment you sign up for is the payment you’re stuck with.
Federal loans are generally a better choice, but they of course have some caveats as well. Defaulting on a Federal loan can mean swift action to garnish your wages and tax refund. Federal loan repayment operates very similarly to a mortgage, so the early years of repayment go mostly toward interest. But Federal loans offer repayment flexibility. You can adopt a payment plan that works for you, whether that means consolidation, earned-income payments, or a graduated repayment plan.
5. Apply for as many grants and scholarships as you can.
This one seems like a no-brainer, but you’d be surprised at how many students don’t apply because they don’t think they’ll be awarded anything. Talk to a school guidance counselor and find out what scholarships and grants are available to you. There are loads of local organizations that give out student scholarships. And with a recent push toward a common application, it might be a lot easier than you think. In NYS, a Pell grant can be an easy way to offset the cost of tuition, as it’s offered as a need-based grant.
A lot of students don’t apply for scholarships because they’re small and they don’t think a few hundred dollars is worth the time. But add together four or five or more of those small scholarships, and it can start to make a dent. Also, many of the small scholarships are awarded as cash, which can really help with the cost-of-living expenses that aren’t built in to tuition.
Of course, cost isn’t the only factor is choosing a school. But looking at financial aid packages and understanding what is truly being offered will help make sure you’re not being fooled into thinking you’re getting more aid than you think.
Schedule a summer visit to Hilbert College and meet with a financial aid representative to start learning how affordable a Hilbert education can be.