The headlines are full of the rising costs of college and high levels of student loan debt, deterring many from even applying for college. However the costs of attending college are met by several different means beyond student loans with financial aid available to many. Financial aid is assessed on the difference between the cost of attending college and the expected family contribution.
Both the federal government and the individual colleges expect the family to contribute towards the costs of college, providing their income allows. The family contribution is not just the parent’s responsibility but that of the student too, and some colleges expect an annual student contribution from summer earnings and a percentage of savings. The FAFAS should be completed by all students in order to access federal grants and low interest student loans.
The individual colleges use the FAFSA to determine if additional institutional aid will be given, and some apply stricter criteria than the FAFSA. Families should not make the mistake of not completing the FAFSA on the assumption the student will not be eligible for aid, as it also gives access to certain college grants and scholarships which do not require an application.
The FAFSA form only requires information from the custodial parent if the student’s parents are divorced, whilst some colleges require information from both parents. Step parents information is also required by the FAFSA if part of the household. If parents refuse to provide the information then the student will not be eligible for financial aid or federal loans.
The government and colleges’ stance is that the family must contribute where they are able and it is the primary responsibility of the family rather than government and colleges to pay towards a student’s education. Students are not considered independent until the age of twenty four, unless they fall into one of the independent categories such as married.
The expected family contribution is determined by the FAFSA based on the gross family income; assets in savings which include college saving plans; property which is additional to the family home; the size of the household; and the number of family members enrolled in college. Retirement savings and home equity are not considered. Some individual colleges do include home equity when determining the expected family contribution along with other assets. If a family has high medical expenses these can be taken into consideration.
Families with incomes of below $50,000 are not usually assessed on any assets they have. Family income is the main consideration when assessing the expected family contribution and the lower the family income is the more financial aid the student is eligible for. Contrary to popular belief if a student is awarded a college scholarship this does not reduce the expected family contribution, but it can reduce the students self help requirement at many colleges, and the need for student loans.
Assessing what your expected family contribution may be can be aided by utilizing a net price calculator which some college websites already provide. The post secondary education federal cost transparency requirement requires that all colleges provide an online net price calculator from fall 2011. The FAFSA and most colleges provide an expected family contribution calculator to assist in helping you to assess what your individual expected family contribution may be, but this may not provide the same figure as that of an individual college which imposes more criteria.
Any student or their family which is dismissing the idea of college due to the high costs should use the available tools to assess how much their own contribution is likely to be and how much financial aid it may be possible to receive. Some of the most expensive colleges in the country actually provide the most generous financial aid which can make the cost of attending college an affordable one.