It happens every year. High school students begin obsessing about getting into a particular college, while parents obsess over how to pay the tuition, fees, room, board and all the other costs of sending Junior or Missy to college. According to a January survey, about 75% of parent’s report that their children rely on them for financial aid information. If you are an overworked parent, you may not have had the opportunity to delve into the labyrinth known as federal student aid. In this article, we’ll define a few of the major concepts and then point out a few tips you should know before you begin applying for student aid.

Key Concepts

Federal student aid is financial assistance that the federal government provides to students and parents of students. The aid helps to pay for the costs of an education at a college or career school. Federal student aid comes in three forms:

  • Grants: A grant is financial aid the you don’t have to repay. They are often based on financial need. Do not confuse with scholarships, which are similar but do not originate with the Department of Education (DOE). Scholarships need not be based on financial need –students might get these because of their talents, affiliations their parents workplace, or for some other reason.
  • Loans: Loans are borrowed money that must be repaid with interest. The federal government has several student loan programs to help pay for a student’s education. Private student loans are also available, but lack many of the advantages afforded by federal student loans.
  • Work-study: This is a federal student aid program in which students work part-time while enrolled in school. Wages from work-study programs help pay for education expenses.

The key to unlocking federal money is the Free Application for Federal Student Aid (FAFSA). The idea behind FAFSA is to determine the expected family contribution toward education expenses. Whole books have been written on how to fill out the FAFSA to your best advantage, but a good place to start is the Department of Education website. In fact, the DOE Federal Student Aid website can get you up to speed on the information you need to unlock the federal coffers.

Financial Aid Tips

Here are five tips you should know heading in 2017:

  1. Working: Working at campus job that lowers the student’s college bill – by offering free room, free board, reduced tuition costs, etc. – can alter the expected family contribution and reduce loan-based financial aid awards. In other words, taking a campus job might reduce or eliminate your federal loan offer. Tread cautiously.
  2. Grants: Federal grants sound great, but usually they are measly. The most you can get is about $3,000 a semester, and that amount is reserved for those with the greatest financial need. Think twice before spending a lot of time and effort chasing a federal grant.
  3. Scholarships: Scholarships can be great, but they require a lot of work and you must start early (real early, like sophomore year). You need to identify sources of scholarships, such as foundations, private agencies, state agencies, employers, etc., and then apply as often as they’ll let you. A high-school advisor can help identify scholarships.
  4. State public assistance: Many states have agencies that provide public assistance to low-income students or ones who live in public housing. The money coughed up by the state may come with strings attached, such as course load requirements or choice of major. Get the facts before forfeiting your options.
  5. Dropped courses: If you drop a course and in so doing no longer shoulder a full-time course load, expect your federal aid to decrease retroactively. For example, if you are receiving a Federal Pell Grant, your award could be cut and you’ll be on the hook to repay that amount. If you don’t promptly repay the balance owed, you may be barred from attendance next semester.



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