There are a variety of factors to consider when choosing colleges to apply to, such as how the school caters to your major, whether they offer an online program for distance education, etc. However, many students -- and their parents -- ignore one vital factor: how the colleges determine who will receive their financial aid.
To cut down on the number of surprises you'll encounter when you receive your financial aid award letters, following are the eight most important questions you need to ask.
1. What percentage of my college financial need does my chosen college cover?
An expected family contribution (EFC) is determined when your FAFSA has been completed. It is calculated using a formula established by the federal government based on the family's assets and income.
Your need is calculated by subtracting your EFC from the cost of the college you choose to attend and remains the same regardless of that cost. For example, if you choose a college that costs $30,000 per year and your EFC is $5,000 your need is $25,000. Conversely, if you choose a college that costs $25,000 per year, your EFC remains at $5,000 and your need is therefore $20,000.
Through a combination of options, colleges will meet your need, using work study and loans first, then grants for the remaining balance. When researching schools, ask what their standard loan and work study amounts equal before proceeding.
2. If you provide a PROFILE form and a FAFSA form, which is used to determine financial aid?
Different factors are considered on each form making the EFC different as well. The PROFILE typically provides a larger amount for the EFC due to other items included, such as the equity the family has in their home. Some schools will utilize the PROFILE numbers for all scholarships regardless of which form provides the highest EFC, while others will use the PROFILE numbers if they determine that the EFC is higher than that on the FAFSA.
You can also get an estimate of financial need using one of the various calculators found on each college website.
3. Is merit-based aid available at my college of choice?
Some colleges provide merit-based aid for those students who have a noteworthy talent, such as music, athletics, etc. that is given regardless of the need determined on the FAFSA. However, be aware that some of the more selective colleges don't offer merit-based financial aid, so if you fit into this category, you may want to research some less-selective schools. When looking for schools that offer merit-based aid, ask how many of these awards are available and what the value is of each.
4. How will my financial aid change after my first year at school?
Make sure when selecting your college that you question their policies. Be clear on what the average financial aid is following your first year so you won't face any surprises. Each year you must apply for financial aid.
5. How does my college of choice address outside scholarships?
Before choosing your college, determine if they will subtract any outside scholarships from your financial aid package. Some colleges will reduce the grant segment of your aid and this provides no benefit to you as a student. However, if you reduce the amount of the loans you need to secure, you will benefit from an outside scholarship.
6. What is the college's average loan amount due at the time of graduation?
There can be a large variation in the amount of loans required by various colleges. Asking this question will provide a good indication of the amount of loans that one school requires compared to others. Some colleges require a higher amount of funding from loans and some have recently eliminated them altogether. Do your research to make sure this amount isn't higher than it needs to be.
7. How much is the college's donation for each student?
Larger schools may have more funds available, but those funds also have to support more students. By comparing the amount of money that a college has available to support its mission, you'll have a better understanding of the resources that the college has to invest in other areas of college life. Typically, there is a relationship between a school's donation per student and the amount of financial aid they offer.
8. How does the college's four-year graduation rate stack up?
This is a very important question that you may not have considered in your search for the perfect school, but it directly relates to the number of years of college that you're going to have to pay for. For example, if the college you choose has a higher rate, you'll end of having to pay for four years, but if most graduates attend six-year courses, you'll have to pay for six, not four.
By taking the time to ask these very important questions, you'll make the wisest -- and most informed decision -- when applying to colleges.
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