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FIVE STEPS FOR PAYING FOR HIGHER EDUCATION

The financial aid process can be daunting, whether it’s your first time or you’re a seasoned veteran. It can be difficult knowing what to do and when to do it. Don’t worry---we’ve broken down the process for you in five steps listed below.

1. Research and apply for scholarships, grants and other "free" money first. 

It’s smart to look for scholarships, grants and other types of “free” financial aid first. This type of financial aid is considered free because you do not need to pay it back. However, you may be required to meet certain obligations. Most likely this type will not cover all of your education-related expenses, so you will need to look for other sources of financial aid as well. 

You must complete the FAFSA (Free Application for Federal Student Aid) in order to be considered for most types of financial aid. Once you’ve applied and been accepted at a school(s), the school(s) will send you financial aid offer(s), which will contain a combination of free financial aid, as well as aid that will need to be paid back. Your offer(s) will be unique to you, because it’s dependent upon your situation. Thoroughly review each offer so that you understand all the aid types, and can compare and evaluate the offer(s).

Examples of free financial aid include scholarships, matching programs, grants, and work-study programs. Potential sources for these types of financial aid are the federal government, your state, your school, or organizations in your community.

2. Be aware of important deadlines. 

There are deadlines for applying and qualifying for financial aid. They can be specific to your situation---your school, where you live or your course of study. In particular, keep track of the deadlines for the FAFSA, scholarships and school aid. The FAFSA deadline is the most important one, since it must be completed in order to be considered for most types of financial aid. Also, keep in mind that deadlines for financial aid from your state, school and other sources may be earlier than the deadlines for federal financial aid. 

3. Complete the FAFSA (Free Application for Federal Student Aid). 

The FAFSA must be completed in order to qualify for scholarships, federal and state grants, work study programs, school-based aid programs, and student loans. The FAFSA can be completed after January 1. The deadline is May 1 for the PA state grant. However, the deadlines for your schools’ financial aid may be earlier---in that case, you would need to complete it in time to be considered for financial aid from your schools. 

The most efficient way to complete the FAFSA is to do it online at http://www.fafsa.ed.gov. This method has faster turn-around time than paper applications. More than 94% of applicants apply online. However, if you can’t apply online, you can submit a paper application. Before you begin to complete the FAFSA, gather the information you will need ahead of time and have it handy. Also, set a side a block of time in which to complete the FAFSA. If you’re applying online, you will need to apply for a PIN in order to electronically sign the FAFSA. Prior to submitting the application, review it closely for accuracy and correct any errors. 

The schools that you include on your FAFSA will use your FAFSA results to assess the financial support that you need. Each school will create a financial aid package for you and will send you the information.

Deadlines for financial aid from the school(s) you’re considering may be as early as January or February. Carefully review any information you receive from each school so that you’re aware of their deadlines. You may also want to check the school’s financial aid web sites.

It’s not necessary to complete federal income taxes in order to submit the FAFSA. Simply use estimated income and tax data and make any changes after the tax returns have been filed. Be aware that you may receive a request to provide the tax returns to verify the accuracy of the estimates.

4. Compare the financial aid offers that you've received. 

The schools that you included on your FAFSA receive your FAFSA results in a document called the Student Aid Report (SAR). This report has a figure called your Expected Family Contribution (EFC). Your Expected Family Contribution is essentially your family’s ability to pay for higher education. 

To determine your eligibility for financial aid, each school that you’ve been accepted to will use your EFC in order to calculate your financial need. Then, each school develops your financial aid offer, structured for your specific situation. The offer may contain scholarships, grants, work-study opportunities, and other types of financial aid. This offer will be sent to you in a package, which is frequently referred to as an award letter.

Be aware that your financial aid offer will vary from school to school, depending on the costs associated with each school, the types of aid available at each school and the criteria for being eligible for certain types of aid.

Once you have all of your financial aid offers, take time to thoroughly review and compare them. Compare the percentage of each offer that is “free”---aid that you do not have to repay as long as you meet certain obligations. Also, determine and compare what the actual costs are for each school. There may be costs that you haven’t thought about, and that are not part of the award letter, such as transportation and living expenses.

Also, be sure that you’re able and willing to commit to the portions of the award that come with a long term responsibility, like work study jobs, or grants that may convert into loans that have to be paid back.

5. Make sure you have the money you need for school. 

Once you’ve chosen the school you’ll be attending and have received and reviewed the financial aid offer from that school, it’s smart to make sure you have enough money for all of your education-related expenses. Take time to make a budget for all the expenses you may have. This will give you a complete picture of the costs you’ll be facing. If you have looked into scholarships and grants and still have costs to cover for college, you will need to consider a student loan from other sources. We at the Bank can help with Extra Credit, our student line of credit. Click here for more info. 

 

 

 

 

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