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Tips for Students: Hunting for College Money

Plan of attack

Tips for Students: Hunting for College Money All right, so now you've been looking at colleges and you probably know where you want to apply. You might be nervous if you're applying to some expensive schools, but don't worry – there is financial aid out there for you, and we're going to help you get it.

The one thing that we can tell you for certain about financial aid is that you have to work hard to get it. It would be nice if it all worked out on its own and someone came to your door with a full four-year scholarship, but that doesn't happen. You have to fill out forms, keep track of deadlines, write essays, and check into dozens of resources – and do this not just before you go to college but also while you're there. It's a hassle and it's tiring, but persistence does pay off.

Plan of Attack
"Do some homework and know at least a little about financial aid. You can meet with your financial aid advisor to ask some questions and get an idea of how things work. The more knowledgeable you are, the better!"

– Financial Aid Advisor, SUNY-Cortland

Looking for money to pay for college is a time-consuming and often frustrating process, and getting organized before you start can help keep you sane as you go through it. It will also ensure that you don't miss an important step or a deadline that ends up costing you money.

To help you get organized, here's a general overview of the three main types of things you'll have to do as you go through the not-always-fun process of looking for money:

• Fill out required financial aid forms: FAFSA and PROFILE are the most common, and you'll have to fill them out if you plan to apply for any type of financial aid, including loans and need-based scholarships. You'll need your and your parents' most recent tax returns to fill out the required financial information.

• Search for scholarships: This is one of the most time- consuming but also potentially the most rewarding parts of finding money to pay for college. You should plan on searching and applying for local, national, and special-interest scholarships.

• Learn about your loan options: There are many different kinds of loans for which you could be eligible, and you should spend some time researching and understanding each option.

Below is a timeline of when you should try to complete each of the main steps.

Start looking earlyIt's Never Too Early
The sooner you start looking for money for college and begin filling out applications and forms, the better off you'll be. No question. If you and your parents file taxes early in the year, instead of waiting until April, you'll have the most up-to-date information about the state of your family's finances for the FAFSA and PROFILE forms. Writing scholarship essays early will let you be more relaxed and will give you time to have your mom, your little brother, your English teacher, and anyone else who's willing read them over and make them better. Some scholarships also have early deadlines, and you don't want to miss out on extra cash just because you didn't find out about it in time.

You should start learning about all of the available financial aid options during your junior year and be ready to write your scholarship essays and submit applications by the first semester of your senior year. It's not a bad idea to write a few scholarship essays during the summer after your junior year, and if you're working on your college essays at the same time, you can probably reuse some of the material. You'll fill out your FAFSA and PROFILE forms at the beginning of your second semester senior year, and you'll get your financial aid offers around the same time as your college acceptance letters in the spring.

As long as you're starting early, check in with students who graduated the year before you. Find out who won the biggest scholarships and ask them for advice and perhaps even to look over your essay. Not everyone will want to help, but it can't hurt to ask, and any advice you can get is useful.

Get guidanceGuide Me, Oh Wise One
"I talked often with my guidance counselor about my family's fear of not being able to pay for college. It must have stuck in her mind because she kept telling me about all these scholarships, and even recommended me for some of them."

– Recent Grad, Wesleyan University

It is your guidance counselor's job to help you plan for college and advise you on how to pay for it. Guidance counselors have lists of local and national scholarships, as well as resources for searching for scholarships. From their experience of working with many other students, they also know which colleges are more likely to give you a decent financial aid package, and they can recommend to you where to look for other financing options.

Set up a meeting with your guidance counselor during your junior year to talk about your plan of attack to find money for college, and continue to meet with him or her throughout the process. The more you talk to your counselor, the more he or she will remember your name, and the more he or she will realize your determination to find a way to pay for college. Your counselor will remember this when he or she is meeting with local scholarship committees, and it can help you in the long run.

If you find that your counselor isn't being very helpful – it happens – then you have to find other people who can give you advice. You probably won't be able to switch to a different counselor, but you should talk to your teachers, your principal, and other guidance counselors and ask for their help. You need good advice, and you have to work hard to get it.

Nail the FAFSANail the FAFSA
"Everyone should apply for financial aid no matter what their family income is. Fill out the required forms and then be told that your family makes too much money – if you don't apply, you will not be considered for any form of financial aid like merit awards, work-study, or loans from a particular college."

– Guidance Office, Monroe-Woodbury High School

"My parents did most of the filling in of financial aid forms, but I wish I had done more. Now that I'm paying hundreds of dollars a month to pay back the loans, I feel like the band that never read the fine print and was signed to a bad record deal."

– Recent Grad, University of Wisconsin-Madison

Even if you don't think that you'll be eligible for financial aid, you should apply. It can't hurt to try, and you won't have a shot at any aid if you don't file the required applications. You don't have to be poor to receive financial aid, and many families lose out on thousands of dollars in loans and scholarships because they think they have too much money to qualify. Don't miss out on aid that can save you thousands.

The first and most important thing you need to do is fill out the Free Application for Federal Student Aid – or, as it's widely known, the FAFSA.

• This is the bedrock of all financial aid forms – without it, you can't get any aid at all – so it's extremely important that you file it on time and accurately. There is no filing fee, and you can file this form online if you wish. We suggest that you take the opportunity to file the FAFSA electronically by going to www.fafsa.ed.gov. You'll get your Student Aid Report sooner, and since the online form has internal checks built in, you'll avoid careless errors. If you do want to fill out the paper version, you can usually get it from your school or by calling 1-800-4-FED-AID.

• You need to refile the FAFSA every year that you are in school to be considered for federal student aid, including grants, loans, and work-study programs. Often schools use this form to determine nonfederal aid as well. A change in your family's financial situation may increase or decrease the amount of aid you're receiving, and even if you didn't qualify one year, you might be eligible for aid the following year.

• You should file the FAFSA early during the second semester of your senior year. You can't file it before January 1 – you need to give the government the full picture of your family's financial situation for the most recent fiscal year – but you should file it soon after that. The Department of Education will process FAFSA forms all year while you're in college, but most school aid is distributed on a first-come, first-served basis, so it's in your interest to apply early. In addition, each school has a different priority deadline, many as early as February or March, and you need to meet that deadline to get your full potential aid. It's not necessary to submit your and your parents' tax return to the IRS before submitting your FAFSA, but since you will need some important information from your and your parents' taxes while filling it out, you should try to complete them beforehand.

• The FAFSA asks for details of your finances from both you and your parents, but you don't have to turn in your actual tax forms to your school or with the FAFSA. To ensure honesty, however, colleges do random audits where they check your information, and you risk losing all your aid if the information you supply to FAFSA does not match your filed tax forms.

It takes about six weeks for your FAFSA to be processed, and you'll then be sent a Student Aid Report (SAR). This report can look a bit confusing, but it's not so bad. The front page will have the date and something called the Expected Family Contribution (EFC), which will be followed by a number. That number is the amount of dollars that your family will be expected to contribute to your college education each year. The lower the amount, the more aid you'll likely receive. Here's an easy way to think about it:

Financial Need=Cost of Attendance-Expected Contribution

However, having a low expected contribution does not guarantee full aid. If your EFC is only $500, but you're applying to schools that cost $20,000, don't necessarily expect your financial aid package to fully cover the difference.

"My parents gasped when they looked at the expected contribution – it seemed ridiculously high. It was kind of panicky for a while, but we talked to the school where I really wanted to go, explained our circumstances, and they were able to give me some loans. Not ideal, but it was a solution."

– Recent Grad, Wesleyan University

Make sure you read your SAR carefully and review it for any errors you may have made. If you note any errors, make corrections on Part 2 of the form and mail it back promptly – you'll receive a new SAR. The federal processor of the FAFSA will send a copy of your SAR to each of the schools that you listed on the FAFSA, and they will use it to calculate your financial aid package.

Some schools require further paperwork than the FAFSA. They'll ask that you fill out their custom form or something called the PROFILE. The PROFILE is also administered by the College Board and is used by many private colleges to determine your eligibility for nongovernmental loans such as those provided by the school itself. The PROFILE is more in-depth than the FAFSA and uses different methodology to calculate your financial need. To file the PROFILE online, go to www. profileonline.collegeboard.com. Make sure to check with each of the schools to which you're applying to see if you need to file a PROFILE, or if there are any other forms you should worry about.

Many high schools offer information sessions for seniors on applying for aid and filling out the proper forms. If yours does, take advantage of them, and bring your parents. It's not the most fun you'll ever have, but the more help you get in this process, the better off you are.

Search for scholarshipsFree Cash, Anyone?
"Start searching for scholarships during your junior year in high school and continue the search right up through your junior year in college. That way, you are prepared and will know what scholarships you are eligible for in advance."

– Financial Aid Advisor, SUNY-Cortland

You should apply for as many scholarships as humanly possible if you're serious about getting through college without a load of debt. Chances are you will have to take out some loans, but the more scholarships you have, the less debt will weigh you down after you graduate. Scholarships are the best kind of financial aid you can get because you don't need to pay them back.

Billions of dollars are given out in the form of scholarships each year to undergraduate students. That's a lot of money. You can earn a scholarship for all sorts of things – if you do well in school, write a certain essay, play a certain sport, speak a certain language, come from a certain racial or ethnic background, have a family member in the armed forces, plan to go into a certain field after college, or possess any number of other qualifications. Each year, many national foundations and corporations give away thousands of dollars in scholarship money that could be yours.

"I applied for LOTS of scholarships. The problem was, I applied for the general ones, the ones that are for "high school seniors and juniors" and "women under 35 with leadership potential." Everyone has something unique about him or her, be it an interest in community service, religion, sports, ethnicity, or another characteristic. Look it up-there is probably a scholarship for it!"

– Freshman, Emory University

We won't even attempt to list scholarships here because there are great resources where you can easily search for them. Our favorite-and the biggest and most popular-is FastWeb (www.fastweb.com). You can search based on your background and profile and find scholarships best suited for you. For a more detailed list of some good places to search for scholarships, check the Helpful Resources section at the end of this book. The local businesses and organizations in your town will also give out many types of scholarships. Talk to your guidance counselor or financial aid officer about where you can find applications for these scholarships and go after them.

Go after any scholarship that you even remotely qualify for, regardless of how small the amount. Every little bit helps, and often, there's less competition for smaller scholarships. And remember to continue to apply for scholarships even after you begin attending college. Often we're motivated during the application process and don't keep at it later on. It's worth your time.

Remember that you have to report every scholarship that you receive to the colleges and universities where you apply and to the school that you decide to attend. They will likely lower the amount of your loans as a result, and the fewer loans you have, the better off you are.

The loan mazeThe Loan Maze
"The most challenging part about financial aid was understanding what my dad was talking about with fixed rates and subsidized loans and the economics of loans – if I had known those words meant thousands of dollars back then, I would have read up a bit more on what I was getting myself into."

– Recent Grad, University of Wisconsin-Madison

Although none of us likes the idea of graduating with a load of debt, more than two-thirds of undergraduate students take out some type of loan to help them pay for college and, on average, students graduate with about $16,000 in debt. This sounds like a lot, and it is, but you should find some comfort in the fact that millions of students just like you have managed to pay back these loans.

There are three general types of loans, outlined below. You should become familiar with them and understand what forms – besides the FAFSA – you'll have to fill out to apply for them. (But as we mentioned, the FAFSA is your first and most important step in the financial aid application process.)

Student Loans
Student loans are either provided or guaranteed by the government, and they're the best kind of loans to get because they have extremely low interest rates.

The two most popular student loans are the Stafford Loan and the Perkins Loan.

The Stafford Loan can either be subsidized – the government pays the interest while you're in school – or unsubsidized – you're responsible for the interest, although you can usually defer actually paying it until you graduate. You have to qualify for financial aid in order to receive a subsidized Stafford Loan. For the 2004-2005 year, the most you could borrow with a Stafford Loan was $2,625 during your freshman year, $3,500 during your sophomore year, and $5,500 for each additional year. Many students choose both the subsidized and unsubsidized loans to get the maximum amount.

Students who demonstrate exceptional financial need receive the Perkins Loan. Your college or university will actually administer this loan, but the funds are provided by the government. This is the best kind of loan that you can get – it's completely subsidized, and the government pays the interest while you're at school and for a nine-month grace period after you graduate. In 2003-2004, you could borrow up to $4,000 a year in Perkins Loans, and you were limited to a total of $20,000 over the course of your college education.

"Now that I have finished college I can look back and see what I could have done differently. First of all, I would not have taken so many types of loans. Basically, I took whatever they would give me in loans that did not have interest accruing during school. This was a good strategy, but now I have four separate payments to make each month."

– Recent Grad, University of Wisconsin-Oshkosh

Whatever Stafford or Perkins loans you get, the money will go directly to the school each semester. You won't be getting a big fat check from the government or a private organization that's lending you money through the Perkins or Stafford programs. In contrast, when you get a scholarship, you'll most likely be receiving a check from the organization sponsoring it – unless it's directly from your college, in which case the scholarship money may be dispersed directly to the bursar's office.

Parent Loan for Undergraduate Students (PLUS)
Your parents can take out the PLUS loan to help pay for your education. They can borrow as much as they need to supplement the financial aid package that you receive, but they can't borrow more than that. This loan is the responsibility of your parents, whereas the Stafford and Perkins loans are your responsibility to pay back.

Private Loans
If your family does not receive enough financial aid in the form of Stafford, Perkins, PLUS loans, scholarships, and work-study, your parents might have to apply for additional loans from private lenders. There are many sources for this, but the terms are not as great as those that are provided or supported by the government.

Treasure huntingTreasure Hunting
"I never thought that the local fireman's union would offer a $1,000 scholarship to a graduating senior in our high school . . . until I got it. I wish I'd checked out more resources rather than just focusing on national scholarships."

– Recent Grad, Wesleyan University

There are so many places to find money for college, and you should make sure you consider them all. Big or small, local or national, you should check into every resource. The billions of dollars given out in financial aid each year can help you pay for college, but they won't come looking for you.

Look everywhere. For example, your parents' employers might offer tuition benefits. The local business owners' association may have a scholarship for students planning to study business. The armed forces offer several options for students, including the Reserve Officer Training Corps (ROTC) program, which pays for tuition, fees, and books, and gives you a monthly allowance in exchange for a service commitment. There are tons of essay contests that are based on a certain topic or a book – even if the particular topic is not one you know a lot about, do some research, read the book, and write the essay.

A great place to visit to check into the many sources of aid for college is www.finaid.com. It has clear explanations of every potential source, as well as links to scholarship search engines, specific programs, and government offices.

Deadlines Rule
"Be sure to read college publications for the DUE DATE of application materials for financial aid. The money awarded, especially at private institutions, is limited and late filers can be denied simply because they failed to meet required deadlines."

– Financial Aid Advisor, Lehigh University

Can you imagine anything worse than going through all the work of writing essays and filling out applications only to miss a deadline? Everything has a deadline, from the FAFSA to individual scholarship applications. To keep them all straight, write them down on your calendar or in your organizer that you regularly use.

And here's a little cheat technique that we've found works really well – if an application is due on March 1, mark it down as due on February 15 so that you remember to send it out and get it there before the deadline. Every time you learn about a new scholarship that you plan to apply for, mark the due date in your calendar. Make sure that you know whether the due date is when your application must be postmarked or actually received. And never, ever, ever wait until the day before the deadline to submit your application – you never know what might happen to it in the postal service maze. Deadlines also change from year to year, so don't use last year's due dates, thinking they are the same as this year's.