The vast majority of financial aid available is from federal, state and university-specific grants. In order to access all three types of funds you must fill out a FAFSA (Free Application for Federal Student Aid) during January or February of the senior year. The timing is very important because the deadline is March 2nd. This date trips people up sometimes because the government is basing your financial award on the previous year's income and assets, but most of us haven't done our taxes by the end of February! That's why you should check the "estimated" option and fill the form out as early as possible, using the exact amount from the year before. (Later you will need to make corrections, but this is just a standard part of the process.)
By submitting the FAFSA, the federal government will consider your family for various grants. (Grants are money that does not have to be paid back.) I'm going to skip trying to make any estimations of how much aid money a family would get based on their previous year's income because honestly, whatever I say now would be highly inaccurate, as the system is always changing anyway. But suffice it to say that the lower your family's income, the more money you will be offered--assuming that your child meets the eligibility requirements (e.g. having graduated from high school and not having a drug conviction after age of 18).
Most states also have grants that they offer to students who are going to stay in-state for college. It should only take minimal research (or a quick call to your school's guidance office) to get the specifics, and be sure to submit those forms on time as well. Using California as an example, students often get more from the state than from the federal grants! However, they won't be eligible for the state grants unless they submitted the FAFSA first.
The same applies to need-based university aid. Most schools offer some kind of grants or scholarships to students based on financial need, but the process for soliciting those grants from your specific college is to submit a FAFSA, which is then forwarded to the university.
You may be getting the picture that this is a very, very important document to submit on time.
Once your FAFSA is reviewed, you will receive a Student Aid Report (SAR). This is where you will make corrections to account for last year's tax information, and it will also give you your Expected Family Contribution (EFC) based on your original submission. (Unless there was a major change in family income or assets from one year to the next, this number is a good ballpark figure to work with.) Your EFC is going to remain the same regardless of what college you choose to attend. Essentially, it is the amount that the government has determined your family should be able to pay out of pocket for your child's college education. (I will keep my grumbling to myself.) You can find various EFC Calculators online if you want to do a little preliminary research.
Subtract the EFC from the cost of attending any particular college, and this gives you the amount deemed "NEED." This amount will be different depending on the school because tuition, housing and fees are unique to each. More expensive school = more need. Therefore, a really good question to ask prospective colleges is: Do you meet full need for all of your students? Most schools do not, but they may claim to come close, or to meet full need for some students, etc. It's a really important thing to know, though, if financial aid is a critical element for your choice of institution.
Eventually the colleges that have accepted your child will send a financial aid offer and then you can get down to brass tacks in the deliberation process. You may be surprised and find that private colleges have met so much of your need that the cost will be comparable, or even less, than attending your state university! This is why it doesn't hurt to apply to all good-match schools of interest in the fall.
Here are a few helpful tips:
- Many high schools hold FAFSA workshops, where professionals will help you fill out your form correctly as long as you bring your old tax documents. Contact your child's school to inquire about this option.
- You may appeal the FAFSA award at any time, and it is recommended that you do so if your family income has decreased (e.g. one parent lost a job).
- Sometimes a college will increase your financial aid package if you call the office and let them know you can't afford to attend their school with what they've offered, or you can tell them what a comparable school has offered and see if they will match it to get your business.
So, here we are in December and I highly suggest that you start looking at the FAFSA website to familiarize yourself with the form and requirements now so you will be ready to jump right in on January 2nd. It is not premature--in fact, there are parts (e.g. establishing a PIN) that you can start right away. The little bit of time you spend now can add up to several thousand dollars and expanded college options for your child in the near future.
And in case want a book on the subject, here are some options from reliable sources:
