February is Financial Aid Awareness Month
In recognition of Financial Aid Awareness month, here is a collection of recent articles related to Financial Aid that may be relevant for your students, as well as links to tools and sites that might be helpful as well. Financial Aid Awareness month kicked off at NGPF with Tim’s interview podcast with Justin Draeger, CEO of the National Association of Student Financial Aid Admissions (NASFAA) on February 8. You might also want to have your students check out the Students, Parents and Counselors section of the NASFAA website.
It's all about the Net Price
- Students should not necessarily be put off by a high “list” price when looking at college and university web sites. Full tuition is often paid by only a few. (Justin discusses net price in the podcast.) CNBC recently ran a good story on this.
- How do you figure out the net price of a school? You can’t just use the “average” cost provided by the school. Family financials and a student's record factor into the calculation. The College Board is a good place to find a reliable net price calculator.
- Where does the money come from for college scholarships? 49% of funding for college/university based aid comes from endowments. (US News)
- The FAFSA (Free Application for Financial Student Aid) has evolved in recent years to make the completion of the form a bit more strait forward. For example, you now can file the form in October instead of January, and use the previous year’s tax info (which can be automatically downloaded into the form.) You can also access the form on your phone. Beth Kobliner provides a summary of all the available tools to simplify the process of completing the form. Don’t be among the 10% of students who don’t fill out the FAFSA just because it is difficult!
- If you think you should maybe pay someone to help you through the financial aid process, THINK AGAIN!!! You shouldn’t pay for a “free” service, and may fall victim of a scam. In case you need more evidence, watch this news clip.
- And, once you have filled it out, there is a chance that you may not be done with the whole process. Roughly one-third of students will be required to verify some of the information provided in the FAFSA. If so, this article from the Northern Kentucky Tribune explains why you need to take this verification process seriously. If you ignore it, you won’t get your aid!
- Financial aid award letters are not always the easiest to decipher. There is a little more work to be done. A local Michigan Fox news channel offers some clear advice on understanding your award letter, including a good description of the different types of LOANS that might be included in the letter, and NASFAA has a worksheet that helps you compare your offers side by side.
- Maybe you want to appeal your financial aid offer. Maybe something has changed in your family’s financial situation. There is a right and a wrong way to appeal for more aid. Forbes provides a guide.
- There are also two articles containing suggestions for increasing financial aid if you have some lead-time to get organized. Forbes again chimes in on this topic, as does Diverse Education. Both of these articles look to a book by Mark Kantrowitz entitled How to Appeal for More Financial Aid.
- OK – you get into school, you secure financial aid – think you can breathe easy? You still have work to do. Make sure you know what it takes to KEEP that financial aid. This will vary by institution. Here is an example for North Carolina.
State and Federal News on Financial Aid
- Ten states now offer financial aid to “dreamers.” New Jersey just jumped into this category.
- Pennsylvania is getting back into the student loan game with a potentially cheaper option from the Pennsylvania Higher Education Assistance Agency.
- California has a program to increase FAFSA and California specific financial aid form completion called “Race to Submit” Hurry up – it ends March 2!!!
- There has also been some legislative activity on the federal level. Lamar Alexander has offered up three main changes:
1) reducing FAFSA questions from 108 to 24
2) reducing the repayment plans to two: the standard 10-year repayment plan or one income-based repayment plan (with payroll deductions!)
3) more accountability from colleges.
For details and potential issues with these proposals check out this news report out of Chattanooga.
That sums up recent developments and helpful tools on Financial Aid!
About the Author
Beth Tallman entered the working world armed with an M.B.A. in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducting student workshops, and developing finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.
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