Here are ten of the most common questions I get about financial aid and scholarships, and my answers to each.
1. Should we bother to apply if we don’t think we’ll qualify?
Probably, but here’s the litmus test. If a family cannot write a check for the full cost of their student’s college education next year, they should apply for financial aid. Many people who think they won't qualify actually do. And some schools may require students to complete the FAFSA for merit scholarships. You have nothing to lose but the time you spend filling out the forms, which isn’t inconsequential, but it’s less risky than forfeiting available financial aid by not applying.
2. Will applying for financial aid hurt my student’s chances of getting in?
No. First of all, it’s important to remember that just because you apply for aid doesn’t mean you’ll get any. So if you’re in the position of debating whether or not to apply for aid, the chances are that while you may get some aid, it won’t be a large enough amount to ever be held against you. Still, applying for aid has no negative impact at most schools. Many colleges are “need-blind” which means that the admissions officers don’t know whether or not you need aid. And even at schools that are not need-blind, the admissions office wants who they want. They see it as their job to pick the right students for the freshman class, while the financial aid office’s job is to decide whether or not those kids get aid.
3. At what parental income level is it not worth it for a family even to complete a FAFSA?
There is no cut off because there are so many other factors considered (number in the family, student income, assets, number of children in college, cost of attendance, etc.). So again, use the litmus test. If you can't write a check for the entire cost of attendance for the coming year, you should apply for aid. Use one of the previously mentioned calculators and see if you qualify.
4. What if we know we can pay without aid? Can that help our student get in?
It can at some colleges, particularly at less competitive private schools. Most applications will ask if you’re going to be applying for financial aid. Checking “No” tells them that you are full-pay. And if you know you’re capable of paying comfortably without any assistance, you likely wouldn’t have qualified for financial aid anyway.
5. Can a student establish residency at an out-of-state public university and then pay in-state tuition?
In the past, yes. But in recent years, it has become almost impossible unless the entire family moves out of state. If you couldn’t afford, or wouldn’t want to pay for, out-of-state tuition, attending an out-of-state college could be a risky thing to do. Don’t count on getting in-state residence.
6. What if parents are divorced or separated? Which parent’s financial information will be used?
The parent with whom the child resided most during the 12 months prior to completing the aid application is called the “Custodial parent”—that’s the parent who completes the FAFSA. Federal guidelines say that it is the custodial parent whose financial information will be used to determine the parental contribution to college. It’s important to remember that the custodial parent may not necessarily be the parent who was initially awarded custody in the divorce settlement. It is all based on who the kid lived with during the base year.
The aid formula also considers a stepparent who lives with the custodial parent as a natural parent. That means the financial aid formula doesn’t distinguish between biological parents and step-parents—it only cares which parent, or parents, the student lived with most during the first base income year.
Most colleges will never ask to see income or asset information from a non-custodial parent. The FAFSA has no questions about non-custodial parents, and while the PROFILE form asks a few questions, the processor does not take this information into account in providing the EFC. On the other hand, if you receive child support or alimony, it will appear as your income.
7. Can my student declare independence from her parents while she’s in college, and therefore, get more financial aid?
If the college decides that a student is no longer a dependent of his parents, then the college won’t assess the parents’ income and assets at all. But it’s the federal government and the colleges themselves who get to decide who is dependent and who is independent, and it is obviously in their best interest to decide that the student is still dependent. Don’t get your hopes up. Most kids who are considered independent are foster kids, or kids who have been legally declared independent from their parents.
8. Is it possible to negotiate with a financial aid office to get more aid?
Sometimes it is. If it looks like you might not be able to send your student to a school she really wants to attend because of money, or if two similarly ranked colleges offered very dissimilar packages, you might consider calling and asking the financial aid office to reconsider its offer. However, if you can comfortably afford what the college has determined that you must pay, then there is little chance a college will change its aid package. You’re not buying a used car here. Financial aid officers aren’t likely to do anything that feels like haggling. But I’ve seen it work. There are times when making that call can lead to a good outcome, especially if the two schools compete for the same applicants, and if the offers are very different. Approach this like a civil business discussion. Leave your emotions out of it. Be polite and respectful. If there are substantial differences between the two awards, the college will probably ask to see a copy of the other award. Offer to provide any additional documentation that might be helpful. And always thank the person no matter what the outcome.
9. What's the best way to find scholarships?
There's no need to pay to find outside scholarships. The best search sources are available for free at finaid.org and scholarships.com.
Having said that, I meet many families who have the impression there is a lot of
money available from outside or private scholarships. These are
little-known awards from private companies, foundations, community
organizations, churches and other benefactors. There is money to be had
from those sources, and they may be worth applying for, but you won’t
likely get a free ride from outside scholarships alone.
The best way to get scholarships is to apply to colleges that may pay. Financial aid offices earmark a certain percentage of money every year just to lure academically appealing students. This practice is called preferential packaging, and it’s not a dirty secret. The better the fit between you and a college, the more likely that school will entice you to attend.
10. Can applying early decision hurt my chances of receiving financial aid?
Yes. Under a binding early decision plan, colleges don’t have as much incentive to entice you with
unsolicited aid because you’re bound to attend if they take you. And if you’re accepted early decision, you give up the chance to compare offers of financial aid from other colleges.