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Meet 4- Financial Aid

Financial Aid: The Best Friend You Ever Had

I’m sure that as long as you’ve known what college is you’ve heard two things in conjunction with it: It’s expensive as all hell and you go in to crushing debt for the rest of your life. These things are partially true, but financial aid is designed to make going to college less costly. True the cost of college tuition is high, but unless your parents are very wealthy they aren’t responsible to pay the whole thing. The system is set up so that people are only asked to pay what they can. True you’ll probably have to take out some loans but as you get older you’ll come to understand that most people carry a debt and for much less important things.

I spent a lot of time at community college after high school and after like 4 years I finally filled out the FAFSA, the very next semester, my total cost for the semester was $49 when I was expecting to pay around $500. Financial aid is a wonderful thing, and I started asking other people what they had gotten. Overwhelmingly I heard people say they hadn’t done it because either a) they didn’t think they’d get anything or b) it was too complicated and they didn’t want to bother with it. I completely understand this attitude. After seeing this I decided that this wasn’t gonna fly. That’s one of the reasons I joined UCAN and other education groups. I was in the same position you guys are in now, young and probably intimidated by what is being asked of you. I believe very deeply that everyone deserves a chance to go to college but frankly you aren’t given the guidance that you deserve and I don’t blame people who don’t complete the FAFSA. It took me 4 years to get around to it, and I vowed that I would do what I could to make sure that didn’t happen to others. We designed this course to make it as easy as possible to get you to the money that you deserve, and make no mistake you do deserve it.

The FAFSA

The most important five letter acronym ever. Except maybe FUBAR. The Free Application for Financial Student Aid is your gateway to paying for college. We cannot stress enough how important it is to complete this thing when the time comes. With it you will be qualified for receiving potentially tens of thousands of dollars. Without it, you’re on your own.

The FAFSA is a ten page form asking for personal information about you and your parents. It also asks what schools you’re applying to.

Post Submission Snags

Every year, thousands of eligible students don’t collect their aid because of things that happen after they complete the FAFSA. They are not insurmountable, so follow our guide here so you know how to deal with them.

Reject Codes

Simple problems with the application. Usually an easy fix. Some of you are going to get an email or a letter saying that your FAFSA was “rejected”. Don’t panic. This simply means that there was an error in processing it. Three out of four times this is because it wasn’t signed correctly. Other times it’s because they think you haven’t registered for selective service (the draft), or you entered a number wrong for parents income. At any rate they’re usually easy fixes and won’t impact chances at receiving aid.

Verification

Schools are required to select 30% of applicants for verification. This entails furnishing proof of information you supplied in the FAFSA to financial aid offices at the school you applied to. Usually they ask for verified tax information. When this happens the office will tell you what type of proof they want and it’s up to you to send/fax/email it to them. A lot of students hit this obstacle and give up on the process. There are advocacy groups trying to get the number of required verifications down, because they very rarely actually find evidence of fraud, so really all it accomplishes is keeping kids from the money they need. If you get selected for verification, just shrug and send in what they want. In all likelihood your going to get your money so don’t worry. It’s just an annoying bureaucratic thing you have to work through…get used to stuff like this. It won’t be the last time you encounter it in your adult life.

Extra Documentation

Some schools go above and beyond the federal mandates and require you to submit more material. These can be signed acknowledgements of eligibility, photo copies of IDs, or student surveys. In an inefficient office this can hold you up for weeks and delay you aid disbursements, so if they ask for extra documentation get it to them immediately.

UCAN Financial Aid Course on Prezi

Types of Aid

There are a lot of different types of aid that you need to become acquainted with, but we’ll try and make it easy on you. You’re going to see the term EFC thrown around in the next section. We’ll expand on it in a bit, but for now know that it stands for Estimated Family Contribution. This is what the government thinks your family would be able to comfortably afford to pay for college.

Grants

You’re going to love this one. When someone says “Grant” they’re really saying “Free Money”. Grants are monies paid to you or your college with absolutely no obligation to pay back ever. You need only stay out of trouble and maintain modest grades. You don’t have to write an essay about what you did to deserve it or what you’ll do with it. Trust us, this is probably the only time in your life that anyone is going to write you a check for thousands of dollars and ask for nothing in return, so savor it.

Pell Grant

The Pell grant is the most common grant in the country. It’s awarded by the federal government on a needs basis, meaning you can get up to $5,500 based on your EFC. The money can go toward tuition, room and board, books, health insurance, or any other item on the approved school expenditures list. These grants can go to families making up to $60,000 per year, but the majority goes to families making less than $30,000 per year

Cal Grant

California’s grant system. They award up to full tuition cost at UCs and CSUs and $9,708 at private colleges.

Cal Grant A

At CSUs and UCs, this Cal Grant covers system wide fees up to $5,472 and $12,192 respectively. If you are attending a private college, it pays up to $9,708 toward tuition and fees.

Cal Grant B

Provides low-income students with a living allowance and assistance with tuition and fees. Most first-year students receive an allowance of up to $1,551 for books and living expenses. After the freshman year, Cal Grant B also helps pay tuition and fees in the same amount as a Cal Grant A. For a Cal Grant B, your coursework must be for at least one academic year.

Cal Grant C

Awards help pay for tuition and training costs at occupational or career technical schools. This $576 award is for books, tools and equipment. You may also receive up to an additional $2,592 for tuition at a school other than a California Community College. To qualify, you must enroll in a vocational program that is at least four months long at a California Community College, private college, or a career technical school. Funding is available for up to two years, depending on the length of your program.

GPA Verification for the Cal Grant

To get the Cal Grant you must do two things: 1)Fill out the FAFSA(more on the later) and 2)Submit a GPA verification form to the state. This is exactly what it sounds like. Some schools will do this automatically, but you should check with the counseling office. If not then go here and download the form and give it to the counseling office.

Loans

Stafford Loan FAQ

A short aside is in order here. This is what everyone fixates on when they try and talk you out of college, or what you might tell yourself when you’re worried about paying for college. Yes it does suck to be in debt to someone, but it’s really just a part of life to owe money. Consider the following and tell me what you think:

People buy cars all the time. The price for a decent and sensible late model car is going to run you around $20,000, which you take out a loan for. But don’t forget that since the bank owns the car you need to pay at least an extra $100 a month for premium insurance. You probably had to pay, let’s say $2000 upon signing so you owe $18,000. You pay $200 a month (which is low by the way). At that rate you’re going to be paying $300 a month for 95 months, or about 8 years. Everyone is fine with this, no one makes a big fuss about car debt.

Now consider student loans. You don’t have to pay them back until after you graduate, you have a long period to pay them back, and once you get your diploma you have a much greater chance of getting a job with a salary and benefits. A car doesn’t get you a better job, a college education does. All that said, let’s look at loans

Stafford Loans

These are loans issued by the federal government. The amount you qualify for is determined by individual financial aid offices and you receive it in at least two installments. They come in two flavors:

Unsubsidized

These are available to anyone who wants one. Interest right now is set at 6.8% annually. You don’t have to start paying until after you graduate, but interest is accumulating from the moment you receive it. You can pay it back as you go, or wait until you graduate.

Subsidized

These are the ones you want.  They’re awarded on a needs basis. The big difference is that interest doesn’t accrue until after you graduate. You can see how this would be an advantage.

Applying for Loans

Once you decide to take out a loan you will be asked to complete an online “counseling” session to make sure you understand everything about the loan process. After that you sign what’s called a Master Promissory Note (MPN). This is just a form stating that you understand the terms and conditions of the loan and promise to pay it back.

Scholarships

More free money. You’ll have to work to get these. They are given out mostly by private organizations. The typical process for getting these goes like this:

  • Find a scholarship
  • Fill out their application before the deadline
  • Write a short essay about why you deserve the scholarship
  • Pray

There are several scholarship aggregation sites like www.fastweb.com that are enormous indexes of scholarships.

Work Study

This is a program in which you work at school. Employers love this because the government pays most of your wages which go toward paying for college. They pay up to a certain amount per term and at the end of this the employer will decide whether or not to keep you on. This is beneficial for several reasons.

  1. It gives you work experience in diverse fields so you can learn to work in a settings like office, cafe, retail, or grounds keeping.
  2. You gain connections and references with your employer. These can lead to future employment
  3. If your employer decides to keep you on, you’ll have a job. College towns are notorious for not having employment opportunities for all the students living there, so getting your foot in the door is invaluable.

How Aid Gets to You

Right about now I’m positive that a few of you are thinking “How the hell am I going to know which one is right for me? What if I apply for the ‘Cal Grant B’, but I should have applied for ‘A’.” Well I haven’t yet told you how financial aid is handled on the colleges’ end. When you fill out the FAFSA and mark off your prospective colleges, they take care of all this stuff for you. Financial Aid offices at individual schools are told everything that you qualify for and then prepare a package for you made up of the best possible options. So you don’t need to worry about applying for individual grants because the financial aid office at your future school has already picked the best one for you. You will be informed of your awards with your acceptance letters. This will help you determine your final college choice.