9 Financial Aid Questions and Answers

This post is for current and future college students. It attempts to provide answers for questions that impact each and every undergraduate student seeking assistance with financing their college education.

  1. Can I know exactly how much a college education will cost before the freshman year?

Unfortunately as much as we’d like to know and be able to plan for college costs, until one completes college, one doesn’t really know how much a college will cost. Here are some reasons why one cannot know the entire cost of college on the front end.

First, financial aid eligibility. Need and/or merit based grants come with financial and/or academic requirements. If one does not meet those financial and/or academic requirements eligibility for these grants can be lost. Losing a grant means that students and/or parents need to come up with a way to cover college costs.

Second, the financial aid packet for each student is different. In other words, it is very unlikely that two students entering the same institution (college or university) as a freshman class will have exactly the same financial aid packet. Hence, a lot of effort goes into developing financial aid packages for each student. Additionally, eligibility for grants and/or loans can be lost for various reasons. Consequently, the financial aid packet can change over time due. In other words, the financial aid packet for a student during freshman year it is likely to look very differently by the junior year.

Third, tuition, fees, and overall cost of attendance varies. As discussed before, cost of attendance is a combination of tuition, fees, room and board, as well as books and other expenses. The elements that make up the cost of attendance though are independent and can be increased as needed. For example, even if tuition or fees remain the same, costs associated with room and board costs may change on a regular basis to keep up with inflation. Similarly, tuition can be increased even if the other elements making up the cost of attendance are not. These increases may come in response to factors outside of the college or university, such as changes in the macroeconomic factors – inflation, recession, etc., that are hard to plan for.

Finally, one in three students transfer and whenever that happens financial aid eligibility changes and students need to file FAFSA again. Contingent on the cost of attendance at the destination institution financial aid eligibility will change.

These are just some of the things that complicate pinning down the exact price tag for a college education, on the front end. However, estimations are possible and there are tools that help with this estimation. Some of these tools include new price calculators, college/university websites, College Board (www.bigfuture.collegeboard.org), College Navigator (https://nces.ed.gov/collegenavigator), etc.

 

  1. How many times should FAFSA be filled?

FAFSA needs to be filed every year. To maintain financial aid eligibility, especially when eligible for Pell grants as well as subsidized and unsubsidized Federal loans, FAFSA needs to be filed every year. Alternatively, if you have no need for financial aid and can afford to cover the entire cost of the college education on your own then there may not be a need for filing FAFSA every year.

 

  1. What does the cost of attendance refer to?

Cost of attendance refers to tuition, fees, room and board, as well as books and supplies. Tuition represents the amount of dollars an institution charges per credit hour. Fees can follow a similar structure with tuition. Room and board fees are contingent on the school’s flexibility on living arrangements, some schools require students to live on campus while others don’t. Books and supplies are typically the category of costs that take most students and parents by surprise. Go here to find out more details related to cost of attendance and how each of these costs can change over time.

 

  1. Can Pell Grants can be used only for tuition costs?

Pell grants can be used to cover the cost of attendance.

 

  1. If I am eligible for Pell grants, can rely on these funds to cover the vast majority of my cost of attendance?

The maximum amount of Pell a student is eligible for is $5,920 per year, but students may be eligible for less than this amount depending on various criteria, such as financial need, cost of attendance, etc.

Overall, the cost of attendance tends to be quite significant. Therefore, Pell grants tend to be small in the big scheme of things, and will rarely be able to cover the total cost of attendance. More details on Pell grants here: https://studentaid.ed.gov/sa/types/grants-scholarships/pell#how-much-money

 

  1. If I am eligible for Pell grants and maintain my eligibility can I use the grants for as many semesters as I need to?

Pell grants are time limited. Therefore, students that maintain their eligibility can benefit from it for maximum 12 semesters, roughly 6 years. More details on Pell grants here: https://studentaid.ed.gov/sa/types/grants-scholarships/pell#how-much-money

 

  1. If I am eligible for merit aid, would I be eligible for need based aid as well, or vice-versa? Or are they mutually exclusive?

Need based aid is awarded due to financial need. Merit aid is provided for academic achievement, for the best and brightest students. Students who are eligible for need based aid can be eligible for merit aid as well, and vice-versa. Therefore, financial aid packets tend to include both need and merit based aid.

 

  1. My financial aid packet has been finalized, will it remain the same over the next 4 years?

Financial aid packages can change over time for various reasons. The most important drivers to changes in the financial aid packages are changes in eligibility for need and merit aid as well as academic performance. Specifically, if you are eligible for need based aid and one of the parents/guardians gets a better paying job your eligibility will change. Similarly, merit based aid is contingent on students meeting certain GPA requirements, if the GPA drops below the specified thresholds merit aid eligibility will change. For more details see the tuition discounting post.

 

  1. Are there any academic progression requirements tied to my grants and/or loans?

Academic requirements are tied to both need and merit aid, especially to grants. Pell grants, for example, require that students demonstrate satisfactory academic progress. Merit based aid almost always has academic performance standards, such as specific GPA, tied to it. Therefore, merit aid can be lost if these standards are not met on a regular basis. If you are eligible for need and/or merit based aid and are not familiar with the academic progression requirements check out your school’s website or contact the financial aid office.

For more details regarding Pell Grant eligibility go to: https://studentaid.ed.gov/sa/eligibility/staying-eligible

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