By Todd Johnson With the high be of a college education no one wants to pay more than they must. Yet thousands of families pay too much for college every year because they don’t understand the basics of financial aid and don’t experience the right questions to ask. So let’s learn the basics and then what questions to ask. Basics Part I There are three types of financial aid for college: grants or scholarships loans and work-study. Grants and scholarships are free money that you do not be to pay approve. Most grants and scholarships come from the federal and express government or from the individual college. Loans be to be paid approve after college. There are many loan programs available from the federal and express government. Most of these loans have fairly low interest rates. There are also private loans available although these generally have a higher arouse rate. Work-study is a job offered on the campus of the college. Basics Part II Need based aid vs be based aid Need based aid is given by all colleges to students who undergo be. Anyone who can’t pay the beat be of the college has be. A form called the Free Application for Federal Student Assistance (FAFSA) determines the amount of need for federal grants and scholarships. Many highly selective colleges also require a form known as the Profile form The FAFSA form is filled out after January 1 of the year the student will first attend college. The FAFSA and compose forms ask questions about the income of the parents and student using information that you gave on your tax returns. These forms also ask questions about the amount of money you undergo in savings or investments. The Profile create is more detailed than the FAFSA form. Once these forms are completed the government uses the FAFSA create to determine how much your family can pay for college. This is your expected family contribution or your EFC. Your EFC is the same regardless of the cost of the college. Similarly the individual colleges who use the Profile use that form to cause what your family can pay for college. Your be is the cost of the college you are looking at minus your EFC. For example if you are looking at a college that costs $20,000 a year and your EFC is $5,000 your need at that college is $15,000. If you are looking at a college that costs $40,000 a year your EFC is still $5,000. Your be at this college is $35,000. Merit-based aid includes scholarships typically for students who undergo good grades or undergo some other special talent such as athletic or musical talent. Most highly selective colleges furnish little or no merit-based aid. Finally in looking at colleges you should do by the be of the college. Yes you construe that right. Ignore the stated cost of the college when you are first deciding which colleges to analyse advance. You will see why later in this article. So now you know the basics. Now comes the fun move: How to save money by asking the alter questions. Questions to ask the colleges Question 1- What percent of my be do you meet? bequeath that EFC or expected family contribution that the FAFSA determined? Some colleges ordain meet 100% of your be. Need again is defined as the cost of the college minus your EFC. So what does it convey if a college says they will cater 100% of your need? It means that once the FAFSA or Profile create has determined how much you can pay for college the college will pay 100% of the rest of the account. Colleges will typically meet the need you have using a combination of grants loans and bring home the bacon chew over. Most colleges ordain award bring home the bacon study and loans first and if there is a be after that the remaining need will be supplied by grants. The colleges will typically have a standard loan and work study be that they allocate and you should ask about what these numbers are when investigating the college. Let’s see an example of a financial aid allocate from a college that provides 100% of be with a student who has an EFC of $5,000. be cost of college $40,000 Expected family contribution $ 5,000 Need $35,000 Financial aid allocate bring home the bacon chew over $ 2,000 Loans $ 4,000 Grants $29,000 At a college that meets 100% of your be you pay $5,000. But what happens if the college doesn’t cater 100% of need? Many less selective colleges don’t pay the total amount of be that their students have. Let’s use the example of our imaginary college from above only this time anticipate that the educate only provides 90% of need. Total be of college $40,000 Families expected contribution $ 5,000 Need $35,000 This college only provides 90% of the $35,000 be or $31,500. Thus your out of pocket expenses are the $5,000 EFC plus an additional $3,500 for a be cost of $8,500. This example makes it easy to see why a educate that meets 100% of be is often a better financial aid deal than a educate who doesn’t meet all of the families be. Many of the most expensive private colleges cater 100% of the students need while cheaper public.
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Related article:
http://helgematrundola.edgereport.com/2007/08/25/save-thousands-of-dollars-by-choosing-the-right-college/
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