Basics Part I

There are three types of financial aid for college: grants or scholarships, loans and work-study.

Grants and scholarships are free money that you do not need to pay back.

Most grants and scholarships come from the federal and state government or from the individual college.

Loans need to be paid back after college.

There are many loan programs available from the federal and state government. Most of these loans have fairly low interest rates. There are also private loans available although these generally have a higher interest rate.

Work-study is a job offered on the campus of the college.

Basics Part II

Need based aid vs Merit based aid

Need based aid is given by all colleges to students who have need. Anyone who can’t pay the full cost of the college has need.

A form called the Free Application for Federal Student Assistance (FAFSA) determines the amount of need for federal grants and scholarships. Many highly selective colleges also require a form known as the Profile form The FAFSA form is filled out after January 1 of the year the student will first attend college.

The FAFSA and Profile forms ask questions about the income of the parents and student using information that you gave on your tax returns. These forms also ask questions about the amount of money you have in savings or investments. The Profile form is more detailed than the FAFSA form. Once these forms are completed the government uses the FAFSA form to determine how much your family can pay for college. This is your expected family contribution or your EFC. Your EFC is the same regardless of the cost of the college. Similarly the individual colleges who use the Profile use that form to determine what your family can pay for college.

Your need is the cost of the college you are looking at minus your EFC. For example, if you are looking at a college that costs $20,000 a year and your EFC is $5,000, your need at that college is $15,000. If you are looking at a college that costs $40,000 a year your EFC is still $5,000. Your need at this college is $35,000.

Merit-based aid includes scholarships typically for students who have good grades or have some other special talent such as athletic or musical talent. Most highly selective colleges offer little or no merit-based aid.

Finally, in looking at colleges you should ignore the cost of the college. Yes, you read that right. Ignore the stated cost of the college when you are first deciding which colleges to investigate further. You will see why later in this article.

So now you know the basics. Now comes the fun part: How to save money by asking the right questions.

Questions to ask the colleges

Question 1- What percent of my need do you meet?

Remember that EFC, or expected family contribution that the FAFSA determined? Some colleges will meet 100% of your need. Need again is defined as the cost of the college minus your EFC. So what does it mean if a college says they will meet 100% of your need? It means that once the FAFSA or Profile form has determined how much you can pay for college, the college will pay 100% of the rest of the bill.

Colleges will typically meet the need you have using a combination of grants, loans and work study. Most colleges will award work study and loans first and if there is a need after that, the remaining need will be supplied by grants. The colleges will typically have a standard loan and work study amount that they award and you should ask about what these numbers are when investigating the college.

Let’s see an example of a financial aid award from a college that provides 100% of need with a student who has an EFC of $5,000.

Total cost of college $40,000

Expected family contribution $ 5,000

Need $35,000

Financial aid award

Work study $ 2,000

Loans $ 4,000

Grants $29,000

At a college that meets 100% of your need you pay $5,000.

But what happens if the college doesn’t meet 100% of need? Many less selective colleges don’t pay the total amount of need that their students have. Let’s use the example of our imaginary college from above only this time assume that the school only provides 90% of need.

Total cost of college $40,000

Families expected contribution $ 5,000

Need $35,000

This college only provides 90% of the $35,000 need or $31,500. Thus, your out of pocket expenses are the $5,000 EFC plus an additional $3,500 for a total cost of $8,500.

This example makes it easy to see why a school that meets 100% of need is often a better financial aid deal than a school who doesn’t meet all of the families need.

Many of the most expensive private colleges meet 100% of the students need while cheaper public colleges usually meet less than 100% of the need. This means that for many students it can be cheaper to go to an expensive private college than to attend a cheaper state school. Until you know what percent of need the college meets, don’t eliminate a college from consideration just because it is expensive.

Question 2- Do you have merit based aid?

Many colleges that don’t meet 100% of a students need do offer scholarships for some students. If your student is near the top of the application pool for a less selective college they may get some money if they qualify for merit based aid. Thus, in some cases, if the student is willing to look at a less selective college, they may get a better financial aid package. Here are some questions you should ask if the college provides merit aid.

How many merit awards are available?

What is the value of the merit awards available?

What are the qualifications to receive one of these merit awards?

This works even for families that don’t qualify for need based aid at all. If your student can qualify for a merit based award you won’t need to pay the full stated cost of the college.

Question 3- How is financial aid determined after the first year?

Some colleges have a policy of providing good financial aid for the first year and then substantially reducing the grant aid in the following years while increasing the loans. You should ask the college in which you are interested how they determine financial aid after the first year and what the average loan is after the first year. While it is typical that the amount of loans will increase each year if the increase is substantial you will want to take that into consideration.

Question 4- What is the average loan amount at graduation of those students who have loans? This question will give you the best indication of the amount of loans that this college requires compared to other colleges in which you may be interested. Although most students will have some loans when they graduate, you don’t want this amount to be any more than necessary.

Question 5- What is your policy regarding outside scholarships?

Most colleges will subtract money earned in outside scholarships from your financial aid package. Some colleges will reduce the loan burden by the amount of the scholarship, but other colleges will reduce your grant money. If the college reduces the amount of loans you have to take out that is a benefit to you. There is no benefit to you if the college reduces the grant aid.

Question 6- What is your packaging policy?

Most colleges give a financial aid package that includes grant money, loans and work study. But each college combines this money differently. Specifically you want to know:

What percentage of an aid package from your college is grant vs. self-help (loans, work study)?

The greater amount of grants versus loans and work study the better for the student.

Do you have a preferential packaging policy?

Preferential packaging occurs when a college gives a better financial aid package to a student with a stronger academic profile than to another student with the same financial need but with less academic credentials.

Question 7- What is your four year graduation rate?

What difference does a college’s four year graduation rate make? This is an important question that many people never consider. Another way to phrase this is, How many years of college am I going to have to pay for? If the college has a high four year graduation rate, you will most likely only have to pay for four years of college. However, if the college graduates most students in six years then you can plan on paying for six years of college, not four.

Conclusion

Now that you know something about financial aid, including the questions to ask each college you are considering, you can make an informed decision in paying for a college education and hopefully also save some money.

Todd Johnson, a lawyer and college consultant, is the principal college admission consultant for College Admissions Partners. Todd provides personalized service to help students and families through the complete college admissions and financial aid process. He can be reached through the website College Admissions Partners

Article Source: http://EzineArticles.com/?expert=Todd_Johnson

The grant Obama has announced gives a whooping $10,000 per year or $5100 per semester to a student. A student can get the grant money for up to 18 semesters or the equivalent term. This amount is good enough to cover the tuition fees and other expenditures on books and other daily expenses.

The application process is so simple that a person can apply in terms of minutes. All that is needed is for students to fill and submit the FASFA form that will serve as their candidature. There are, of course, eligibility conditions that must be matched. The two primary prerequisites are that the person needs to be a citizen of America and he must be of legal age (18 years).

The money is great just in and of itself and then to make it even better there are tax benefits to be had with this scholarship. So the amount is interest-free and the money is all paid-for by the government and then you are also spared from paying taxes, isn’t this really great?

**Update** Did you know you can get a $10,000 scholarship just for registering? Apply right now for free: Scholarship Sign Up Form

Being a working mom is really hard, especially when she does not have someone to depend on. One of the unkind realities that American women face today is financial obligations, particularly all the single moms. When it comes to this kind of thing, like getting back to college, most women don’t think of it more than as a dream. But, President Barrack Obama’s scholarship for women program turns their dreams into reality.

This scholarship is really one big opportunity for all the American women, no matter what other people say about this, especially those anti Obama group of individuals who oppose the program. What matters most is that the President of the United States acknowledged one of the major concerned of his people, which is to finish their education.

This scholarship will enable all those mothers who could never really do anything for them in their own life because they were too busy taking care of the families, to get back to school and realize at least one of their dreams of college education. And when there is so much to achieve and nothing to lose, this dream is surely worth chasing.

**Update** Did you know you can get a $10,000 scholarship for Moms just for registering? Apply right now for free: Scholarships for Moms

The economic meltdown that is sweeping throughout the United States of America has resulted in a rapid increase in the crime rate since the economic recession started. Officials from the law enforcement department have said that there has been a sharp increase in the number of people who have been victimized because of the economic meltdown.

The Obama Administration has been quick to realize this and is now offering help to repay a big amount of your debts in mortgages and providing relief to the public at large. The government, through its Economic Stimulus package, has set aside $40 million every year in government grant money to support those in a desperate need for money who need the cash for basic survival needs, and unfortunately, the number of people in this category is considerably very high.

The Obama administration wants you to apply for these government grants in order to help you overcome the economic challenges posed by this hostile financial crisis, and not to act in desperation and commit such acts which would make your fellow American citizens deprived of their livelihoods.

It needs a little bit of searching online by you in order to get the requisite information as to which grant you need to apply for, since there are multiple options you can choose from. You need to fill up a completed application form and forward it to the relevant department and wait a while after which you will receive the grant money from the economic stimulus package.

The competition for government college grants is especially tough because there are so many college students applying for them. You can get started on the road to getting one of these government college grants by knowing where to go to get them. The main concern is that not everyone knows how to properly apply for government college grants, and this can cost them a chance at free college money.

First, you will need to learn how to apply for government college grants. You can learn how by going to a government agency in your area that has the appropriate forms for getting government college grants. You will also need to find out what grants are available and what the requirements are for these grants. If you are eligible for any of these grants then you can apply for them with the documents that the agency specifically asks for. Of course, you’ll need to take care of everything by the deadline.

When writing out your applications for government college grants you should remember to write especially well. If you explain your needs clearly you will be more likely to get the government college grants that you are applying for. The requests should be succinct and not too drawn out.

Your applications for government college grants should be sent in as early as possible. The grants generally are a first come first serve thing, so you should get your applications in as soon as you can.

You can get information on the government college grants and the forms you can use for getting them at the financial aid office of your local school. The Free Application for Federal Student Aid is the most popular of these government college grants and will give you information on your Student Aid Report. This report will let you know if you application for a government college grant was accepted or not.

Overall, government college grants are useful in that they can help you to get the free money that you can use for college. Just remember to apply for government college grants and to make sure that you fill out everything properly.