Financial Aid FAQ’s: The
Answers You Need Today!

Week 7 of 12

The end of the school year is always a time when parents feel like a huge weight is being dropped on their shoulders. Whether your child is getting ready for the first year of college or the last year at high school, this is an important time for you. While your child focuses on studying, you have to worry about paying the college bills.

And applying for aid isn’t easy. You’ll have to complete a giant stack of forms. You’ll have to keep an eye on your child’s grades and exam results. And you’ll have to arrange all of your tax and money issues to make sure that you can afford the fees that the colleges demand.

Here are the six most important things that you must know as this school year comes to an end:

1. Is it too late to ask for funding?

While it’s certainly best to get your FAFSA and Financial Aid Profiles in as early as possible, not everyone manages to complete all their paperwork on time. By the time Spring rolls around in your child’s senior year, if you’ve still got forms to fill out, it is still possible for you to get the help you need.

But don’t delay another minute! You do need to get those forms in quickly. It’s very likely that a large chunk of the available funds will already have been disbursed; you need to move now if you’re going to get a piece of what’s left. Any award can only help your situation, so make sure that you ask—if you don’t ask, you won’t get!

And there’s another reason not to give up on applying this year: many colleges won’t consider funding applications from parents who didn’t apply for aid during their child’s freshman year. If you don’t send off your forms now, you could well find yourself cut out of college funding help for your child’s entire college career.

If your child is a senior and your forms are still half-filled, you haven’t got a minute to lose. Get those forms off today or call (908) 857-4200 and ask us to handle them for you.

2. Do financial aid forms have to be filed every year for every child?

Many parents believe that once they’ve completed their forms and received their answers, their work is done.

They’re wrong.

Your financial situation can change from year to year. You could get a pay raise, a promotion or your business could pick up new clients that rocket your income. The financial aid administration is fully aware of this. They’ll want to see your financial situation before the start of every school year.

If you’ll be earning more money next year or if the value of your assets will have increased, that’s bad news: you’ll end up with less need-based aid. Of course, it’s also possible that your future applications will bring you even more help than in the past.

Either way, it’s important to remember that the financial aid process doesn’t stop at the beginning of the freshman year; it continues every year your child is in college.

3. Are there income limits for financial aid applications?

Financial aid comes in two forms: need-based aid and non-need based aid such as scholarships and merit-based aid. Obviously, high-earning families are unlikely to receive much, if any, need-based aid. But they can certainly get a share of the non-need based funds.

When the financial aid department allocates loans and scholarships, etc., they don’t only look at income. They may, for example, take into account the extra expenses of having more than one child at college. They could even look at your age to see whether or not you qualify for additional help.

It’s also possible to position your assets so that when your application is submitted you present your best financial front. In fact, if you take the correct action now, you might find that it’s possible to fund your child’s education, pay off your mortgage, keep putting money away for your retirement and maintain your current lifestyle—and do it all on a tax-favored basis. The Financial Aid Process can actually give some people an opportunity to do all of this. Most accountants have no idea how to put these things together, especially once you add in financial aid. We’d be happy to explain it to you. If you would like to book a Free 1 hour Diagnostic Evaluation, you can call my office at (908) 857-4200.

4. Which cost more out-of-pocket: public schools or private schools?

Take a quick look at the fees charged by private and public schools and you might think that private schools are far out of your economic reach.

That’s not necessarily true.

While tuition at private colleges is usually higher than at public schools, they often have more financial aid available too—and often times it’s free money, the best type.

When you’re applying for financial help with your child’s studies, you want to pick up grants and scholarships, the kind of free money that you don’t have to pay back. Because private schools tend to have wealthier alumni who like to give endowments, they also tend to have more scholarships and grants available to students. Public schools, on the other hand, tend to want the money that they distribute to be paid back with interest.

When you calculate the real cost of your child’s education, you shouldn’t look only at the size of the tuition fee or your EFC. The figure in which you should be most interested is how much will have come out of your pocket when the last check is signed. That’s the bottom line.

We always recommend that students apply to between eight and 10 schools, including both public and private colleges. Once the award letters have been issued, you’ll then be able to see clearly which schools will cost you less (out of pocket).

5. Are private scholarships the answer for my family?

When most people think of college aid, one of the first solutions that comes to mind is private scholarships.

Scholarships are sometimes awarded for academic or athletic excellence. They can also be used to help disadvantaged sectors of society. All of them are free money.

But scholarships are very rare. About 97 percent of financial aid is made up of grants or loans from the state or federal government, or from schools; only about 3 percent comes in the form of private scholarships. That’s unlikely to cover your child’s freshman book expenses, let alone a complete college degree.

Of course, you shouldn’t necessarily ignore scholarships. Every little bit helps and if you have some spare time, you might find some interesting opportunities in the Grants Directory (there should be a copy in your local library) or online. Just don’t bank on it.

And remember that even if your child does receive a scholarship, the school may reduce its own package by the amount of the award. You can negotiate a little, but often you’ll find that your child will have won a scholarship for the school and not for him— or herself.

You don’t want to exclude scholarships completely, but you’ll be better off building a more comprehensive funding package.

6. Do I have to understand all this financial aid jargon?

Even financial experts can feel a little lost when it comes to applying for financial aid. There are all sorts of special terms that just don’t turn up anywhere else.

In college planning, these terms will come up again and again. You must know what they mean:


There are two kinds of Expected Family Contribution (EFC): the Federal EFC is the amount that the government thinks that you should pay; the Institutional EFC is the amount that private schools and colleges think you should pay. Private schools usually think that you should pay more. The higher your EFC, the bigger your college expenses.

“Base Financial Year”

Your Base Financial Year is usually the year that your child is a high school junior. It’s that year’s financial figures—your assets, income and even home value—that will be used to calculate your EFC. You must know which year is your Base Financial Year.

The fact is, there are lots of ways to arrange your assets to keep your EFC down. If you’ve got a big expense such as a roof repair or a new car purchase coming up, you could be better off paying the bill before you fill in the forms so that that money is no longer counted as savings.

We can create a Customized College Funding Solution to maximize free money and minimize loans. For a FREE 1 hour Diagnostic Evaluation, just give my office a call at (908) 857-4200 and we’ll arrange a personal appointment.


“Need” on financial aid forms is the difference between your EFC and the cost of sending your child to a particular school. The size of your need will depend on the school and how successfully you’ve managed to keep your EFC down. The higher your need, the more aid you may be eligible for.

Whether your child is preparing for college or getting ready for his or her senior year at high school, you’re not alone at this difficult time.

Until next week…

Ian Welham, CCPS
Certified College Planning Specialist
(908) 857-4200

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