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Financial Aid Basics |
| Financial aid is money to
help meet school-related costs at schools, colleges, and universities. The
money for financial aid comes from the federal and state government, banks,
the schools themselves, and from organizations, corporations, and private
donors. Eligibility requirements, application procedures and other
characteristics of financial aid vary depending on the administering agency
and the source of the aid money. You must apply for financial aid to get it. Remember, you apply for aid separately from admission to the school. The amount and kind of aid you get is based on your meeting eligibility requirements, financial need, and on the kinds of aid available at the school you attend. Most schools require that you apply for admission before they will consider your application for financial aid. Most students who receive aid get a combination of grants, loans, and work study put together into a financial aid PACKAGE. The package is put together by the financial aid office at the school or college from information you provide. Financial aid applications and assistance are available from most high school counseling offices and college financial aid offices. Most school-sponsored financial aid is based on financial need. Using federally mandated formulas, the school will determine the amount you and your family should be able to provide toward the cost of your education. If there is a difference between your costs and the amount you and/or your family are expected to pay, the school will attempt to make up the difference with aid. In many cases, your financial aid package will be used to pay the bill for tuition and fees. Any money left over will be given back to you to pay for other expenses such as books, living expenses and so on. However, this is not always the case. Some scholarships are reserved for specific types of expenses. Some scholarships can be used to pay tuition and not fees, and some scholarships are only for books. Be sure to look at each scholarship you are applying for to see what costs it covers. There are many kinds of financial aid: grants, loans, and scholarships; work programs; military benefits; special reciprocity agreements between states or schools, which allow for reduced out-of-state tuition; and federal programs subsidizing specific target populations. When you apply for financial aid, the school figures out how much you and your family are expected to be able to pay. This is called the Expected Family Contribution. Then, the school compares the EFC to the amount they think that it will cost you to pay for tuition, fees, books, and living expenses. If the EFC does not cover all the costs, the school will try to make up the difference with financial aid. You can receive an early estimate of your eligibility for federal student aid by filling out the FAFSA (Free Application for Federal Student Aid) forecaster. If you are a dependent, you answer questions about your parents' income, your student status, and your income. If you are no longer a dependent, you don't need information about your parents' income. http://www.fafsa4caster.ed.gov/ Another option is a calculator available at: http://www.act.org/fane/index.html You can get a detailed description of how the EFC is calculated and get the forms for calculating your EFC at: http://studentaid.ed.gov/students/attachments/siteresources/0708EFCFormulaGuide.pdf Tax Credits Tax credits may be available to reduce your federal taxes. The Hope Tax Credit can be claimed during the first two years of college, up to a maximum of $1,500. The Lifetime Learning tax credit is available for any level of postsecondary study, up to a maximum of $2,000. Only one type of credit (Hope or Lifetime Learning) may be claimed for a student in any given year. If your parents claim you on their income tax return, they would be eligible to take the credit on their taxes. If you are not claimed as a dependent on anyone else's tax return, you would be eligible to claim the credit. The credits are available to single filers with adjusted gross incomes of $40,000 or less or joint filers with adjusted gross incomes of $80,000 or less. To receive aid from these programs, you must be an eligible citizen or permanent resident of the United States with a valid Social Security Number. You must also have a high school diploma or a GED certificate or pass an approved "ability to benefit" test and enroll in an eligible program as a regular student seeking a degree or certificate. The amount of financial assistance you receive will depend on your financial need, your cost of attending school, whether you are a full-time or part-time student, and whether you attend school for a full academic year or less. Contact for more information: http://www.ed.gov/offices/OPE/PPI/HOPE/index.html or http://www.irs.gov/publications/p970/ch02.html |
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| If you have to pay money to get money, it could be a scam. Finding financial aid is no simple task. Financial aid experts advise students to be prepared to put in hours of research and paperwork. Unfortunately, many students and their families are overwhelmed by the work involved and are still unaware of the free sources of financial aid information. They end up paying hundreds of dollars to companies offering to help them find money for college. These services use information about the student and family to provide information about scholarships for which the student "may" be eligible. In addition to providing scholarship source lists some of these services claim to actually help with students' applications, or "do the work for you." People who have paid for such services report problems, such as out-of-date scholarship contact names and addresses, or scholarships that are strictly for people of another race, gender, or age group appearing on a "personalized" list furnished by the service. Some of the listed scholarships are for specific disciplines and many students are ineligible. Many sources on the lists actually turn out to be either loan programs or contests. Some fraudulent companies require the student to apply for every scholarship or grant on the company's list and to provide proof of rejection for each one before giving any refund, conditions that are not disclosed until after the student pays the up-front fee. Because many of the sources on the lists don't provide scholarships or have expired deadlines, it may be impossible for consumers to obtain the required rejection letters. Be wary of scholarship-matching services that guarantee success, advance-fee loan scams, and sales pitches disguised as financial aid "seminars". Compare the private search company's offer to the information available to you in eCIS and in your local library before paying for this information. About 95 percent of college aid comes from state or federal government agencies, all of which are listed in eCIS (www.idahocis.org, Login: Lakeland, Password: hawk1) in the many topics covered in "Financial Aid Basics." If students are suspicious of a scholarship search company or offer, they should visit their high school guidance counselor, or those out of high school should call or visit a college financial aid office. There are some organizations or contests that do charge a fee for applying for their scholarships. Although most scholarships that charge an application fee are legitimate, a small number appear suspicious. Many scholarship applications for the performing or fine arts require entrance fees or application fees to cover the cost of the required performance concert, competition, or gallery exhibition. If the fee is larger than you feel comfortable paying you might ask the scholarship source what costs the fee covers or if they can tell you how many students applied last year and how many won. If the dollar amount collected from entry fees is much larger than the dollar amount given in scholarships it may not be a legitimate scholarship source. If students are suspicious of a scholarship application that requires a fee, they should visit their high school guidance counselor, or those out of high school should call or visit a college financial aid office. In addition to the information in eCIS, the Internet has a large variety of pages on the topic of student financial aid and scholarship scams. Featured here are some Internet sites and government agencies offering help or information on avoiding scholarship scams. |