Financial Aid

Educational Avenues

Financial Aid

Educational Avenues helps parents and their student attend a college that is a good academic and social match as well as a good financial fit. We do this by discussing and understanding the following:

1. family's own values regarding money and education

2. where the student fits into the admission pool of the colleges to which he/she is applying

3. what is the family's real budget each month.

This process helps parents avoid mistakes, such as applying to colleges based on the cost; not applying at all because of the cost; applying to a college with a less expensive learning disabilities program, relying on wishful thinking and forgetting to apply to financial-safety colleges. We have provided below some of the key concepts to this very important but often confusing area

Any U.S. citizen and permanent resident can receive financial aid, even students from high income families and their parents can get student loans , and sometimes, other aid too. The information each family is required to complete is the FAFSA (Free Application for Federal Student Aid), at www.fafsa.ed.gov Through this form and conversations with the financial aid administrators at the colleges of their choice, families can work out ways of handling college costs.

Every family is expected to help fund their child's education to the best of their ability, and so, an Expected Family Contribution (EFC) is the calculation of a base amount that all families can afford to contribute, given an analysis of their income and assets.

Financial aid awards can vary substantially, from college to college, depending on many factors, from the college's institutional resources to grants and scholarships available through one's State and other organizations. Furthermore, the student's academic and extracurricular achievement plays a major role in securing merit-based awards.

CCS/Profile: Some private colleges require that students and their families file a CSS (College Scholarship Service) profile in addition to the FAFSA. While most colleges use the FAFSA-produced Expected Family Contribution to determine all of their awards, a minority do calculate a second EFC that they then use to distribute their institutional funds. Some colleges require their own questionnaire.

Financial Aid Packages: Colleges and Universities offer many types of financial aid "packaging" in order to respond to their institutional needs, particularly those related to their enrollment management and revenues. Thus you may find that your child is packaged differently depending on whether or not a specific institution finds your child to be a more or less desirable candidate.

"Institutional effectiveness is not the same as student effectiveness". (Tom Mortenson, Higher Education Opportunity).

Packaging: Educational Avenues will help you to understand how your student is being "packaged" by an institution. Your Expected Family Contribution will be the same at all schools but the amount of institutional funding offered can greatly affect the amount of aid and tuition discounting that a student may receive. This is also called "preferential packaging".

Cost of Attendance (COA): The Cost of Attendance varies from Institution to institution. For example, the COA at a community college will be considerably lower than that at a state university which in turn usually has a lower COA than a private college. The Cost of Attendance includes tuition, living expenses, books and supplies, travel costs and personal expenses. Each school determines its own COA following federal guidelines*.

The family's EFC is subtracted from the college's COA and the result is the student's "need". in theory, when each college receives the student's FAFSA information, it will put together a financial aid "package" that will meet the student's need. Unfortunately, most colleges are unable to provide aid that will match the student's full need. Nonetheless, completing a FAFSA gives the schools most of the information they need to begin working on financial offers*.

Student Aid Report: After you file the FAFSA, your family will receive a Student Aid Report (SAR) that restates the information provided. You should carefully read the SAR to make sure it is correct.

Verification: If you are selected for this process (the Department of Education requires schools to verify 30% of all applicant files), it is imperative that you provide all the information that the school is requesting or you may lose your federal financial aid award.

Goal: student should attend a college which is a good academic and social match, as well as a good financial fit.

*The following information marked with asterisks was excerpted from The Journal of College Admission , a NACAC publication (National Association of College Admission Counselors) Spring/Summer 1999 newsletter.

Types of "free" financial aid:

*Scholarships: are awarded on the basis of attributes that students possess, such as athletic ability, musical or dramatic involvement, family background or organizations that your student belongs to. These are also referred to as "merit aid".

*Grants: are based on financial need. The federal Pell grant, worth up to $3125 in 1999-2000 is the best known grant and is reserved for the neediest students. Students who qualify for the Pell grant also might receive the Federal Supplemental Educational Opportunity Grants (SEOG).

*Federal Work Study: this is a program that makes it easier for needy students to get part-time jobs while they are in college. Ideally, these jobs relate to the students' academic or career interests. In many cases though, they are simply a way for students to help cover their expenses and stay in college. Undergraduates in FWS positions are paid an hourly wage (often the minimum wage) and can use the funds for any educationally related expenses.

Types of "self-help" financial aid:

Loans: Many students resort to loans to fund their college education. Loans are obligations and must be repaid even if the student does not graduate or does not like the program he/she enrolled in.

The most advantageous student loan available right now is the Stafford Loan. It has a variable interest rate that is capped at 8.25%.

· The Subsidized Stafford is based on need and the government pays the interest on the loan while the student is in school.

· The Unsubsidized Stafford is available to every undergraduate student regardless of need. The interest accrues while the student is in school. The annual maximum borrowing limits are set by the government. First year students who are dependent in status, can borrow up to $2625. In second year, $3,500; in third and fourth year, $5,500.

· The PLUS loan (Parents Loan for Undergraduate Students) is a federally sponsored education loan for parents. Many lenders, from your local bank to the government offer parents this loan. It is important to shop carefully for rates as the best deal this year may not be such a good deal over the four years of college. Also, it is important to make sure all loans have one servicer so that all loans are in one place. The PLUS loan has a variable rate that is capped at 9.25%, zero % origination fee and a 3% processing fee. Some lenders vary the rates and terms. Educational Avenues can give you clear information so that you can decide what's best for you with respect to financial aid.