What is Financial Aid
Financial Aid is a general term that incorporates all types
of money, loans, and work-study programs offered to a student to help pay
tuition costs and living expenses.
Nowadays, numerous financial aid tools are available to
students, along with scholarships, need-based awards, work-study employment,
and student loans. Let's talk about some of them.
Need-based Financial Aid
Need-based financial aid eligibility depends on two simple issues - cost of
education and family capability to pay. From institution to institution, the
cost of education can vary considerably.
In general, all reasonable costs
(tuition, room, board) of attendance would be included by these budgets. Need
based financial aid is received by over 50 percent of today's college students.
You require completing the Free Application for Financial
Aid (FAFSA) and, if appropriate, the College Scholarship Service's profile to
apply for need based financial aid.
Formulas and Applying
Need analysis formulas are supplied by both the Department
of Education and the College Scholarship Service to the information your
financial aid applications supply.
By means of important ways, these formulas,
which were designed by congress and by the educational community, differ, but
the amount towards educational expenses in the upcoming year to your family can
be estimated by these formulas.
Check the Department of Education and College
Scholarship Service (College Board) Web sites if you are interested in evaluating
these formulas. Also, in a variety of commercial publications available on
newsstands, you can also find these formulas outlined.
You are eligible for need-based financial aid, if you
demonstrate need. Demonstrated need is a straightforward concept -- it is each institution's
cost of education minus the designated family contribution.
College Financial Aid: Scholarships
For students of these days, many scholarships are available.
Let's look at the kind that's based on merit. Almost all parents anticipate that their child will win a
merit-based scholarship.
Many will, but, sorry to say, there are simply not
enough to go around. That aside, students should demand any for which he or she
may be eligible. You require knowing about four things in case of merit scholarships.
Parents and students require keeping merit scholarships in
perspective. Irrespective of what you might hear, merit scholarships are not,
by themselves, reason to attend a particular school.
A merit scholarship may
serve to emphasize the reasons for choosing a particular school, but remember,
academic and social interests and goals should constrain this decision.
Many different types of merit scholarships are there. Most
of them are based on academic merit, but others are based on leadership, artistic
or musical ability, dance, and even such focused activities as cheerleading.
You need to find out which schools provide merit
scholarships -- not all do. You can discover this out by asking for brochures
from each school that interests you or your young person.
Deadlines are critical to know for each scholarship, since you
need to know how and when to apply them. Don't give up scholarships since your
application was late. On a timely basis, the school's brochures will supply you
with all the information you need to apply.
College Financial Aid: Home Equity, Student and Parent Loans
The equity in the home represents the largest
"savings" account for many families. You should think about using it
to pay for college, if your home has equity value. Home-equity-loan interest
rates are often lower than those charged by commercial loan sources, although
this is not always true.
In addition, home-equity-loan interest is tax deductible,
which further lowers the cost of attendance. The fact that home-equity payments
can be extended over a longer period than just the four years of enrollment is
equally as important as low interest.
There are, of course, student loans and parent loans -- both
of which are becoming more important all the time as families try to pay the
rising costs of higher education.
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