Getting Your Fair Share of Merit Aid
The basic premise of financial aid is that it is need based. Families fill out the government’s aid form, the Free Application for Federal Student Aid, so mathematical formulas can determine a family’s eligibility for federal financial aid. Colleges can use a different, though similar, methodology to make financial aid awards. However, the same student can obtain very different financial aid packages. If the financial aid process is truly need based, how could that happen? Part of it results from how individual colleges define assets for financial aid purposes. For instance, some include home equity, while others do not. Another part of the difference results from colleges competing to attract top students. High caliber students increase the college’s prestige. To encourage these students to attend their college, merit scholarships are often given or the mix of traditional need-based financial aid is altered. Financial aid consists of grants (which do not have to be repaid), loans, and work study programs. Two financial aid packages may have the same dollar value, but the one with a higher percentage of grants will be more valuable to the student. What implications does this have for a child approaching college? Consider these tips:
Encourage your child to do well on college entrance exams. Not only will this make him/her eligible for acceptance at a broader range of colleges, it may increase your financial aid package.
Don’t focus on entering one particular college. Start with a few colleges that would be acceptable alternatives and apply for financial aid at all of them. You may be surprised at how different the financial aid awards are, especially if your child is a strong student.
What should you do if your child has his/her heart set on going to one college, but you received a better financial aid package from another college? Talk to the financial aid officer. While some colleges are receptive to matching other colleges’ offers, others are not. In those cases, your best strategy is to review the financial aid calculations with the officer, looking for ways to increase the award. Many subjective factors go into calculating financial aid awards and you may be able to negotiate so the total award is increased. Perhaps just changing the composition of the award so more is given in grants will help.
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This newsletter was prepared by Integrated Concepts Group, Inc. The opinions expressed in this newsletter are for general information only and are not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. The views expressed are those of the author and may not necessarily reflect those held by PlanMember Securities Corporation. Material presented is believed to be from a reliable sources and PSEC makes no representation as to it accuracy or completeness.