Sift your way through the financial aid paper trail

January 12, 2004|by ROSE RENNEKAMP

For a lot of parents, the first question that comes to mind when their teenagers prepare to attend college is, "How am I going to pay for this?"

Let's face it, college is expensive.

The good news: More than half of all college students receive financial aid. Unfortunately, the financial aid process isn't something most of us know much about until we have to dive right into it. Hopefully this column can help you understand what you're getting into before you sign on the dotted line.


Scholarships and grants are the best kind of financial aid. You don't have to pay those back. Scholarships and grants can either be "need-based," given because of the financial situation of the student and her family, or "merit-based," awarded to a student for strong academic skills or talents.

Some scholarships are a blend of need and merit.

While scholarships and grants may be what you're hoping for, there never are enough of those to go around. And rising tuition could mean you will have to pay a larger share of the college costs.


Loans are a form of financial aid that you will have to pay back.

Loans based on financial need often have lower interest rates and are subsidized by the federal government. Loans not based on need generally are not subsidized, and you will end up paying a higher interest rate. Make sure you understand all of the terms of any loans - the interest rate, the repayment schedule and when repayment must begin - before you commit.

Work study

Work study requires a student to work in order to receive money for school. Students typically work 10 to 15 hours per week, but no more than 20. Work-study jobs usually are on campus, pay at least minimum wage, and can be related to the student's major. A woman I know majored in animal science in college, on her way to becoming a veterinarian. She worked at the university's veterinary hospital as part of her work-study program. Because of that connection, she had a leg up when applying to the vet school.

When you apply for need-based financial aid, be prepared to provide a lot of financial information. It's a little like filling out your income taxes, and you'll need many of the same records. The form usually required is called the FAFSA - the Department of Education's Free Application for Federal Student Aid. Fill it out as early as you can in order to get the best shot at financial aid, because some aid is awarded on a first- come, first-served basis. You can find the FAFSA online at

The government uses the FAFSA to formulate an "Expected Family Contribution" - the amount of money that your family is expected to pay for college expenses each year.

I was more than a little shocked when I learned how much the government thought we should be able to pay toward our kids' college educations. You can get an idea of your expected family contribution using the free financial aid need estimator at on the Web. Just keep in mind that colleges have different ways of assessing need and awarding non-federal aid.

Financial aid is complex, confusing and even frustrating. The good news is that it does get easier each time you do it. (Yes, you have to do it for each child and every year they are in college.)

Just remember: Start early, make sure that the information you provide is accurate and meet every deadline. And, once you get those aid offers, compare them carefully. Most of all, be sure you read and understand everything before you sign anything.

Rose Rennekamp is the vice president of communications for ACT. Have a question you want answered in a future column? Send an e-mail to Rose at

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