What type of services do you provide? At College Financial, for over 23 years, we have been providing college financial aid consultation services to thousands of families across the U.S. We take a hands-on approach and pride ourselves on unparalleled service. We’re with you every step of the way. We specifically help with filling out the proper forms (FAFSA and CSS PROFILE), advise on college funding strategies and assist in college financial planning. To learn more about our services, visit the Services page.
How do your services differ from other available providers?
We’re not here to productize the experience for a low subscription fee, rather deal with each family individually. Each family’s finances have a different make-up, and therefore requires a unique approach. This is likely the biggest decision and opportunity a parent and child will embark on as a team. Partnering with a professional advisor, who will provide you the necessary time is an invaluable resource and will empower you with the confidence and knowledge you need when applying for need based financial aid.
What forms do I need to fill out for financial aid?
There are two main forms that need to be filled out in order to be eligible for financial aid from the federal government, the state and/or private institution. All public and private schools require the FAFSA (Free Application for Student Aid) and access to federal grants and loans are issued through submitting the FAFSA. The College Board manages and distributes the CSS PROFILE form which is required by over 500 private institutions. Visit the College Board website to learn which schools require the PROFILE.
What can I expect to see within a financial aid award letter?Within a financial award letter you can expect to see up to three different types of need-based and non-need based aid. The first is need based grants and/or scholarships, which do not need to be repaid. Grants, can consist of federal (e.g. Pell), state and institutional. You might be awarded a subsidized Stafford loan or Perkins loan which are both need based. These loans are federally subsidized which means the federal government will pay the interest while the student is in school. Re-payment begins 6 months after your education is finished for Stafford loans and 9 months for Perkins. If the students' attendance falls beneath half-time, re-payment will begin.
There are limits on the amount of the combined subsidized and unsubsidized Stafford loans. For example, for dependent students the loan limit for their first year is $5,500, $6,500 for second year and $7,500 for remaining years. However, subsidized amounts are capped at $3,500, $4,500 and $5,500 for first, second year and remaining years, respectively. Students must attend school at least half-time. to receive Stafford loans. For independent students, loan limits are significantly higher.
What type of loans are available?
In addition to the federally subsidized Stafford and Perkins loan, which are awarded based on a need assessment, you can also expect to see an unsubsidized Stafford loan and Federal Work-Study. For work-study, expect your child to work 10-15 hours per week, although it will vary depending upon the school. If you accept the work-study award you'll need to communicate with the school's financial aid office to secure a position. Be aware, that the money earned by the student will be paid to the student, but will not be deducted from the parent's bill. Additionally, work-study wages are not counted against family contribution as you apply for financial aid the following year.
Other unsubsidized loans are available, such the Federal PLUS Loan and private student loans. The Federal PLUS Loan is for parents, not students. Loans are made by FFEL (Federal Family Education Loan) lenders and has a fixed interest rate of 8.5%, although is subject to adjustment twice a year. Parents are allowed to borrow up to the cost of the education, less other financial aid. There's usually a 3% origination fee and repayment begins 60 days after the loan has been disbursed.
Private student loans are also available through such accredited banking and credit institutions such as Chase, Citibank, Discover, Wells Fargo and others such as Sallie Mae. Obtaining a private student loan is more challenging than it has been in the past given the current state of the economy. Additionally, most lenders limit the loan amount to the cost of education, less other financial aid, similar to the PLUS loan. The student will want to consider how much debt they're willing to take on and COA should play a role in the decision making process when they choose their school.
What if I don't think I'll be eligible for aid, should I still apply? Everyone should be applying for financial aid. There are many variables that factor into the eligibility equation such as parent and student assets and income, in addition to the number of children in college. The institutional methodology, adopted by College Board and its PROFILE form, takes into account a broader range of assets. Also, some schools look at only the custodial parent in the case of divorce and some both parents.
Self-employed parents, filing a schedule C, have an advantage in that only their net income from the schedule C is taken into account. Additionally, all federal loans, unsubsidized and subsidized, are issued only with the submission of the FAFSA.
When should I begin my preparation for the financial aid process? For the high school graduating class of 2010, the clock began ticking as of January 1, 2009. Your need-based aid is calculated based on the 2009 tax year. Strategies deployed to maximize your eligibility might be jeopardized if you wait too long. Research into the financial aid application process should start as early as the student's junior year. Seek professional advice in order to deploy successful strategies to maximize your chance of research on the admissions process. While you and your student are looking at schools, while the curriculum, faculty and location might be of interest, so should be their financial aid policies and practices.
What's factored into COA (Cost of Attendance)? The COA (Cost of Attendance) can vary from school to school. In most cases, the variables consist of tuition and fees, room/board/meals, books and supplies, personal expenses and transportation. Schools allocate costs differently based on a number of different factors, but generally speaking you can find out COA estimates from the school.
How is the recession affecting the availability to secure financial aid?
There is a record number of college bound students for the 2009-2010 academic year and applications for financial aid are up roughly 20% due the current economic challenges facing so many families today. The federal government and private institutions realize now is not the time to be cutting financial aid. As a result, schools are attempting to preserve that pool of aid dollars through hiring freezes and keeping admissions growth in check.
There are some schools that cut back on merit aid and reallocate to students that require need based aid. In addition, the federal government increased the maximum amount of a Pell Grant award by 13%, from $4,731 to $5,350 for the 2009-2010 school year. However, as stated above there's more competition for those dollars, both federal and institutional. Bottom line, there is an estimated $144B of federal, state and institutional aid for the 2009-2010 academic year and the competition for those dollars has been fierce. Expect the same for the 2010-2011 year.
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