• Need-Based Financial Aid

    Need based financial aid is determined by a formula summarizing the family’s financial situation to determine their Expected Family Contribution, or EFC. The Total Cost of Attendance (this number often does not include all the travel required if the student attends school out of state) minus the EFC equals the student’s Demonstrated Financial Need. The student and his family must file a FAFSA and sometimes a CSS Profile to qualify for need based aid. This article describes ways to optimally position one's resources before filing the FAFSA. It is worth a read.

    Need based aid may be awarded in several forms: work study (the student works at an on-campus job & his earnings are applied to his school bills); grants or need based scholarships which do not need to be repaid; and loans to either the student or the parents which must be repaid. It is important to understand the types and terms of any loan a student and/or his parents take out. This link explains some student loan issues, Understanding Loans.

    Some need-based aid is funded by the federal government. Some need based aid is funded by certain private schools. Some very competitive schools with large endowments guarantee that they will meet 100% of a student’s Demonstrated Financial Need. Some elite schools offer only need-based aid and do not offer merit based scholarships. Many other schools offer only a limited pool of need-based aid and award it on a first come, first served basis, so it is important for students to apply early for financial aid.

    Some pertinent resources:
    FAFSA Government Federal Student Aid
    FAFSA printable worksheet to prepare for online application
    PIN.ed.gov Application for Federal Student Aid PIN
    Collegeboard.com CSS College Board Aid Application

    Merit-Based Financial Aid

    Merit-based financial aid is determined by a student’s academic merit, special talents, occupational goals, service record or other specific attributes. Many colleges and universities offer merit-based scholarships. The student should look for these scholarship opportunities on the Admissions/Financial Aid webpage of the schools to which he is applying. It is a good idea to apply early for these scholarships. Often to qualify for merit aid from a school, the student must apply for admission by a priority deadline, which is before the general admissions deadline. Students should check the Admissions/Financial Aid webpage of the schools to which they are applying very carefully.

    Students can also research scholarships by signing up on search engines, such as:
    College Board's Scholarship Search
    Peterson's Scholarship Search Engine

    Furthermore, more information on scholarships is available on the Naviance. 

    Note - Some merit based scholarships include a component of financial need and may require the student to file a FAFSA. Whether merit or need based, or both, scholarships do not need to be repaid.

    Another note - Receiving scholarships from organizations other than the government and your school can effect your financial aid package. Read more

    Student Loans

    People take out loans to afford things they can’t afford at present, such as houses and educations. When considering loans, it is important to realize that many purchases are both investments and consumption decisions. In considering a house, certain features of a house determine whether or not it is a good financial investment. Other features may be purely enjoyable. It is prudent to understand what portion of a loan is going towards a financially sound investment and what portion is going towards life style aesthetics. Weighing the future financial obligation relative to the life style/consumption portion of the purchase can be a worthwhile exercise. In considering college educations, ideally one considers the purchase in the same way. Borrowing for your education is an investment in your “human capital” (i.e. your skills, knowledge and credentials) and this often is a sound investment –but there are limits. Paying for the experience of being on a beautiful campus for four years is a consumption choice. The future financial burden is worth considering ahead of time.

    Unlike most other forms of debt, student loans are extremely hard to get rid of if you find that you can’t afford to pay them off. Bankruptcy is almost never an option. For a list of ten daunting statements about student debt, read this shocking article. Some of the statements in this article may seem wholly unbelievable. The possible ramifications of debt that are suggested in this article are worth researching.

    Student loans may indeed be the appropriate solution for some people. Here are some resources for learning more about student loans:

    estudentloan.com for learning about and comparing student loans

    US Department of Education

    Finaid.org offers information about savings, loans, and calculators

    Co-op Programs

    Co-operative education programs at universities have students spend part of their time in the classroom and part of their time working in a corporation or lab doing closely supervised, paid work related to their field of study. The earnings from participating in a co-op program can play an important role in off-setting the cost of one’s education. Students in co-operative programs often graduate with four or more semesters of real-world work experience. This work experience can be very valuable in helping recent graduates to find jobs, too.

    This article in Forbes discusses co-op programs. Here is US News’ list of the top ten co-op programs. College websites, for these ten schools as well as other colleges that offer co-op programs, will further detail the programs.

    Tax Credits

    Tax credits may offer significant financial help. Please read about tax credits offered by the federal government at irs.gov. The two types of credits offered are the American Opportunity Credit and the Lifetime Learning Credit.

    Another tax benefit that some people qualify for is the Student Loan Interest Deduction. Read about that at irs.gov.