Making college affordable
The skinny on financial aid and financial literacy
When Dave Peterson goes on the road and talks to parents and students about paying for college, he hears one question more than any other:
“My family makes (X dollars) a year. Will we qualify for aid?”
His answer is always the same: It depends.
“How many people are in your family?” asks Peterson, the University of Cincinnati’s assistant vice provost for enrollment management/student financial aid. “What is the age of the oldest parent? How much of your family’s income comes from investments? How much of that income is liquid?”
That may seem complicated. But there are simple steps you can take to make the financial aid process as straightforward as possible.
Before doing anything else, Peterson reminds parents and students not to make assumptions. “There are students whose families have significant incomes who qualify, and those whose families have less income who don’t,” he says. “There are a lot of misconceptions. That you have to be under a certain income level to qualify for aid. Or that you have to be a minority. All ofthese are wrong.”
To see if you qualify for aid, start by completing the FAFSA (the Free Application for Federal Student Aid). It’s the mandatory first step to claiming Pell Grants, work-study opportunities, student loans and other aid awarded annually by the federal government. Even if you don’t thinkyou’ll qualify for federal aid (or don’t want it), many colleges and universities require that you fill out the FAFSA before they’ll determine how much they’re willing to offer in scholarships or other institutional aid.
You can fill out the FAFSA starting each October for the next academic year. Peterson’s advice: Fill it out as soon as possible. And then start talking to financial aid counselors at the colleges and universities in which you’re interested, to see where you stand. “We like to have a relationship, and a name with a face,” Peterson says. If you know how much money you’re willing to pay out of your own pocket every year to go toward a degree, let the financial aid officeknow – they’ll tell you whether you’re on track, or if you might have to adjust your plans.
Peterson encourages parents to speak candidly about finances with their college-bound students to make sure everybody’s expectations are in sync. “You may need to be flexible to make your college goals work out,” Peterson says. That may mean taking on a roommate, or living at home, or even considering a different institution altogether if the finances don’t work out. At the University of Cincinnati, students often find they graduate with less debt because of the university’s co-op program. In fact, UC invented co-op in 1906 and has been innovating career preparation ever since. Co-op gives students a chance to alternate classroom learning with on-the-job experience – and earn money doing it. UC co-op students earn a collective $75 million annually, working for 1,800 local, regional, national and international employers such as Apple, Boeing, Disney, Fisher Price, General Electric, HBO, Kroger, NASA, Nike, Toyota and many more.
“Co-op provides a good opportunity to earn quite a bit of money if you’re smart about it,” Peterson says.
Peterson offered several other suggestions to keep the process manageable, and college more affordable:
- Know where you stand. Every college is required to offer students a rough estimate of what they can expect to pay via an online calculator. Even before you fill out the FAFSA, you can get a rough estimate of how much a particular university is likely to cost.
- Chase scholarships like it’s your job. “We had a student this summer who didn’t pay a dime out of her pocket,” Peterson says. “She had seven different scholarships. She applied for more than 100 – but the ones she landed paid for her tuition.”
- Stay on top of deadlines. When institutions say they give full consideration only to applicants who submit requested materials by a certain date, they mean it. If you’re applying to a scholarship with room for 70 slots, and 60 have already been awarded by the time you complete your application, you’re not in a great position.
- Build your financial literacy. “So many students come in and don’t know how to do a budget,” Peterson says. So while many students’ aid packages include a campus job to help cover living expenses, they sometimes burn through their paychecks too quickly. “Families really need to have financial discussions much earlier on.”
- Get ready to do it all again. Applying for aid is an annual process. And take heart – even if you don’t qualify for financial aid now, you may in the future.