A college education is a smart investment—and more affordable if you take advantage of various financial aid opportunities. As your son or daughter applies to colleges, contact the Financial Aid Office. You might be eligible for scholarships and grants—money that doesn’t need to be paid back (see www.mbbc.edu/parents for scholarship information). Besides job opportunities on- and off-campus, several types of low-interest loans might also be an option if your total educational financial needs are not met. To be eligible for federal financial aid, you must complete the FAFSA form the first year and a FAFSA renewal form the following years.
What is a FAFSA? It stands for "Free Application for Federal Student Aid" form. Based on the information you provide, the U.S. government will determine your financial need and the amount your family will be expected to pay toward college (called your Expected Family Contribution, or EFC). This amount will be the same no matter what school your child attends. To estimate your EFC, use the EFC calculator at studentloan.com.
When should I file? File the FAFSA as soon after January 1 as possible. Keep a copy for your records. A FAFSA form must be filled out and submitted to the government for each child attending college in order to qualify for financial aid. If your income tax return is not finished, you can still apply and estimate your tax information on your application, but you will have to make corrections later if your estimated income or tax information was not accurate.
What information is needed to fill it out? The government will need such information as social security numbers of parents and child (if a dependent); the previous year’s W-2 forms and federal income tax returns of parents and child; and untaxed income records (e.g., Social Security payments, welfare or veterans benefits records).
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Loan Options
• Federal Stafford Loan (subsidized and unsubsidized): This is popular because of its low-interest rates (variable rate adjusted annually but capped at 8.25 percent) and favorable repayment options. It’s available to undergraduate and graduate students.
• Federal Parent Loan for Undergraduate Students (Plus): This low-interest loan is available to parents of dependent undergraduate students and based on satisfactory credit history. Repayment begins within 60 days after loan is fully disbursed with up to 10 years to repay.
• Alternative Loans: If you need additional money to cover the total cost of your education, check with banks. Citibank and other lenders offer student loans with no loan fees, low interest rates, no payments while in school, flexible repayment options, and interest rate reduction programs.
Why Get a Degree?
As the number of college graduates has grown, the earnings gap between high school graduates and college graduates has also widened considerably, according to the U.S. Census Bureau. In 2003, the typical full-time year-round worker in the U.S. with a four-year college degree earned $49,900, 62 percent more than the $30,800 earned by the typical full-time year-round worker with only a high school diploma. Unemployment rates are also lower for individuals (25 years and older) with higher levels of education—August 2005 rates were only 2.4 percent for adults with a bachelor’s degree or higher compared to 4.5 percent for high school graduates (Bureau of Labor Statistics, 2005). |
Is it worth it to fill it out? Yes! For one thing, it’s free. For another, everyone’s situation is different, so you don’t know what you’re going to qualify for until you apply. Even if you have a bad credit history, the amount of your aid depends on your financial need, not your past history. Most students at Maranatha typically qualify for at least some form of the Federal Stafford loan. In the 2005-06 school year, 752 of the 862 students enrolled for fall received financial aid.
Can I fill it out and submit it online? Yes! You can submit a FAFSA online at fafsa.ed.gov. After you’ve submitted the form online, it takes just hours or days to get processed by the Department of Education. Remember to secure a PIN number to sign the form electronically. (You can obtain a PIN number from the FAFSA website.)
Can I send it by mail? Yes, you may complete a paper application, which is available from public libraries, high school Guidance offices, college Financial Aid offices, or by calling 1-800-4-FED-AID. Keep in mind it typically takes the government longer to process these.
When will I hear back? No later than 4–6 weeks after you file the FAFSA, you and the schools you indicated on your FAFSA will receive a Student Aid Report (SAR). Colleges use the SAR—which includes a summary of the information you submitted, federal aid eligibility, and your EFC—to determine your eligibility for aid. After subtracting your EFC from the total cost of your child’s attendance, most schools will send you an "award letter" with the types and amounts of financial aid you can receive (typically a mix a grants, scholarships, work-study programs, and Federal Stafford Loan eligibility). Compare the packages you receive from each school and make a decision on how each college meets your spiritual, academic, and financial goals. Warning: Being eligible to receive loans does not mean you should borrow the full amount every year; remember, it’s easier to borrow than to repay. Choose the college you want to attend and accept in writing (while declining all other offers in writing).