WHEN YOU ARE KNEE DEEP in financial aid applications, desperately trying to figure out how you're going to pay for your child's college education, it's easy to forget one thing: The laborious process offers as many opportunities as it does headaches. Here's what you need to know:
How Colleges Calculate Your Need
Mastering the Paperwork
Finding Outside Grants
How Colleges Calculate Your Need
Colleges use two numbers to decide on your financial-aid package: their annual costs and your "expected family contribution." They reach the latter number by plugging the information you give them into a federal formula that takes into account family income, total assets, family size, number of children in college and even the parents' ages. Schools then subtract your family contribution from the total cost of attending college — tuition, books, room and board, transportation and living expenses. The difference is defined as your need.
Sound simple? Don't believe it. There are plenty of gray areas that also determine the amount of aid you receive, including:
Whether You're Divorced
The federal formula requires that schools include a stepparent's income when calculating the family contribution — even if the stepparent has no intention of supporting the child. This can increase the funding gap substantially.
Whether You've Chosen a Private School
Private colleges and universities have their own formulas that often figure in your home equity, the amount you expect to contribute to retirement accounts while your child is in school as well as the student's income and assets. Again, this can boost your expected contribution.
How Many Other Students Need Money
This number varies every year. If you happen to be applying when the school is under siege from needy students, your chances of receiving a good package are much lower. The lesson: Apply as early as possible.
How Desirable Your Kid Is as a Student
Schools will pay up for exceptional grades or athletic talent. There isn't much you can do about this after the fact, but make sure your aid officer knows what your child has to offer.
How Much Money the School Has Available
When it's gone, it's gone. One more reason to apply early.
Mastering the Paperwork
This is the most tedious, but in many ways the most important part of the process. One blank line or miscalculated number, and your application can be held up for weeks, putting you at a distinct disadvantage. Here are some guidelines:
Know Your Forms
There's no one financial-aid form. Depending on the college your child picks, you could end up filling out several forms.
Everybody must fill out the Free Application for Federal Student Aid (FAFSA), the standardized national form for U.S. government grants, work-study jobs, state grants and such student loans as Perkins (for low-income students) and Stafford.
Next is the CSS/Financial Aid Profile Form, or Profile, which is used by more than 600 colleges, universities, graduate and professional schools to help award nonfederal student-aid funds. The Profile is administered by the College Board, which charges a $5 online registration fee, plus $18 for each copy it sends out to schools. In addition to the standard financial questions, there's a section tailored to meet the criteria of each individual. Additionally, some private schools — especially the elite universities — have their own financial-aid applications, which they may ask you to fill out in lieu of or in addition to the Profile.
Finally, divorced parents may face one more form. Some schools require that a noncustodial parent fill out the Divorced/Separated Parent's Statement, available from the College Board. If a noncustodial parent's divorce decree specifies that he or she won't be contributing to the child's education, be sure to let the school's financial-aid officer know that. Or, for custodial parents who can't depend on their ex-spouse's help, make sure the school's financial-aid officer is aware of the situation. In either case, this additional information should go straight to the school. Do not attach it to the FAFSA or Profile.
Bring Up Any Special Considerations
Although you can't add any information to the forms you'll fill out, you can contact the schools directly about special circumstances that aren't covered. For example, the forms will ask how much a divorce agreement states that you should receive in child-support payments, but there is no space to write in whether or not you actually get the money each month. If you never see a dime from your ex, you'll have to explain your plight to the aid officers. In such situations, chances are you can convince them to recalculate your need in your favor.
Pay Attention to the Date
The due date on the financial-aid application isn't necessarily the same as a school's deadline. The date on the form represents the last day the financial-aid form processors — independent companies that do the calculations and then send the results to the schools — will accept your application.
Don't Give Up
Don't throw up your hands midway through the process because you think you'll never qualify for aid anyway. Even if you're right and you do have too much in income or assets to receive any grants, chances are you're going to need to do some borrowing to pay tuition bills. If you don't fill out the FAFSA, you can't qualify for any of the federal student-loan programs.
Don't Rule Out Any School, No Matter How Expensive
Private schools sometimes award more generous aid packages to help make up for their higher costs.
Don't Make the Most Common Mistake of All
An overwhelming number of financial-aid forms are rejected by the schools for one naggy reason: Parents put their own — and not their child's — Social Security number and birth date on the application.
Finding Outside Grants
Students seem to have the most success with outside grants when they concentrate their search in their own backyards. The best opportunities are often found through community and church groups that award academic and other types of scholarships. To find these, check with the student's high-school guidance department. In addition, check with the college the student plans on attending if there are any alumni grants he or she may qualify for.
On the Web, check out the College Board's Fund Finder service, which lists hundreds of sources of aid. Or visit the Princeton Review's site. Its search engine of the "best colleges" allows you to find out what sorts of grants are available at specific schools. Another great source is FinAid, sponsored by the National Association of Student Financial Aid Administrators.
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