Newspaper article The Christian Science Monitor

Think You Can't Get College Aid? Guess Again - Most Families Qualify

Newspaper article The Christian Science Monitor

Think You Can't Get College Aid? Guess Again - Most Families Qualify

Article excerpt

WHEN her eldest son decided to apply to a small, private university, where tuition runs around $25,000 a year, a local newspaper editor, who is divorced, didn't know how she'd be able to foot the bill on her salary.

But with the help of a financial planner, she received about $75,000 in grant and scholarship money. The woman (who asked that her name not be used) has paid about $8,000 out of her own pocket. And her son will graduate this June from the Massachusetts school with only about $8,000 in loans.

"We were absolutely amazed," she says.

More than half of all college students receive some form of financial aid through loans, grants, scholarships, and work-study programs. The majority of all aid now comes in the form of loans - most from federal funds. (See chart.)

This represents a shift from a decade ago, when students typically received half their funding from grants and half from loans, according to the College Board. Part of the reason for the change is that the grant money has not kept up with the skyrocketing cost of college.

Because Congress expanded eligibility in 1992, any family can qualify for a federal loan regardless of income. Still, many people rule out applying for aid, believing that their income or assets will disqualify them.

"The theory is the money goes to people who need it. The reality is it goes to people who successfully navigate the system," says Kalman Chany, author of "The Princeton Review Guide to Paying for College."

"Families should not be threatened by the process," says Barry McCarty, director of financial aid at Lafayette College in Easton, Pa. "{But} sometimes, because of their haste and not reading instructions carefully, they occasionally penalize themselves."

But competition for aid is stiff. And with most application deadlines in mid-February, now is the time to get busy.

All information about what forms to fill out, where to get them, and their deadlines is located in the financial-aid section of the admissions application.

At the very least, you will have to complete the Free Application for Federal Student Aid (FAFSA). By filling out this form, you automatically apply for federal financial aid. Rule No. 1: Do not wait until the student is accepted to the college to apply.

The federal government uses the FAFSA to determine your expected family contribution (EFC) - the amount your family can afford to pay each year toward the cost of college.

The college uses this number to calculate the total aid package a family is eligible to receive by taking the difference between the cost of attendance (which includes tuition, room and board, books, transportation) and what the family is expected to pay.

More than 400 schools also require a new form this year called the Financial Aid Profile, developed and processed by the College Board. This form asks more detailed information about a family's finances. Private colleges, which tend to have more of their own money to give out, generally use this form because they believe it better estimates how much a family is able to contribute.

To fill out either the FAFSA or Profile for the 1996-97 school year, parents will use their 1995 tax information.

Obviously, income is a major factor in determining aid. A family with $40,000 in gross income, for example, has an expected family contribution of $3,300; a family earning $80,000 a year will have to kick in $14,000.

But other factors influence aid, such as assets, unemployment, divorce, high medical expenses, and the number children in college concurrently.

"One of the glaring myths is that families with over $90,000 in income rarely demonstrate financial need," says Mr. McCarty of Lafayette.

"Need-based aid does go to families with six-figure incomes on occasion when there's more than one student in college. It won't if there's only one in college," says Barbara Tornow, director of financial assistance at Boston University. …

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