Over the next few weeks, high school seniors will receive their financial aid offers from prospective colleges. For some, the offers will be sufficient and allow them to make a final decision on where they will attend college this fall, but not everyone will be that lucky. Many students may find that their financial aid package leaves a significant gap between what the college has offered and how much it costs to attend. This can cause quite a bit of stress for families and students, especially for those who haven’t set aside adequate college savings to help bridge the gap. But before students start to panic, they should remember that their financial aid packages are offers at this point and not set in stone. In certain situations, they may be able to appeal and ask for additional funding.
Now that college acceptance letters have started to roll in, students will soon begin receiving financial aid award letters from their prospective colleges, as well. This vital component of the college planning process can be a bit confusing, especially when colleges do not use the Financial Aid Shopping Sheet created by the U.S. government. This standardized form, unveiled in 2102, is meant to help students clearly understand what is being offered and allows them to easily compare award packages from different schools. Unfortunately, fewer than 2,000 colleges to date have voluntarily adopted this form, which means some students may be unsure of what is actually being offered in terms of financial aid.
First of all, it’s important that students understand that not all financial aid is free money for college. In fact, most financial aid packages include a combination of gift aid and self-help aid. And this is where many students get lost or confused. They see the total amount being offered, but don’t clearly understand what they are actually taking on in terms of potential debt. Before agreeing to any financial aid package, students must understand the distinct differences between the two types of aid. Here is a brief overview of each, and what students may see as part of their financial aid award packages.
Most families know this time of year is when the FAFSA must be filed. One of the most important questions the FAFSA answers is, “How much Pell Grant will I get?” The answer is like all questions related to financial aid–it depends. If you meet the eligibility requirements to receive federal student aid and have filed your FAFSA, the Expected Family Contribution calculated as a result of processing your FAFSA, along with your school’s Cost of Attendance and your enrollment status will be used to determine how much, if any, Pell Grant you may receive. The maximum eligible EFC for 2014-2015 is 5157. You will find your EFC when you receive your Student Aid Report issued after filing your FAFSA. If you supplied a valid email address and signed your FAFSA with your PIN, you will be able to get this report 3-5 days after submitting the FAFSA. Don’t worry if it seems complicated. Your financial aid office will notify you of the specific amount you may receive when they send you your financial aid award letter. That said, let’s take a look at this year’s maximum and minimum award amounts.
It’s that time of the year when students start to receive their financial aid refunds. This typically occurs when students have either secured enough money through grants and scholarships to cover their tuition and fees, or they have borrowed more student loan money than they actually needed. If you fall into the second category, don’t rush out and spend that money just yet. Unlike the money you may have received from a scholarship or grant, your student loan money will eventually need to be paid back. I know it can be tempting to splurge a little, especially if you have been strapped for cash the last few weeks, but trust me when I say you’ll regret it after graduation. Why? Student loans carry substantial principal and interest payments which can come back to haunt you later if you’re not careful and don’t budget accordingly. If you find you have a little extra money coming back to you this semester, here are few do’s and don’ts to consider when deciding how to spend your student loan money.
It’s January, which means many of you will start working on your 2013 taxes soon. I’m sure most of you are aware of the various tax deductions and credits that are available for business-related expenses, donations, child care, and medical bills, but did you know that your student loans may also give you certain tax advantages? Whether you are a current college student, the parent of a college student, or someone who is still in repayment, there are various student loan tax deductions and credits that could help reduce your tax liability or even score you a nice refund. Here’s a brief overview of what may be available to you.