Paying for College

A college education is one of the best investments possible. Think of the benefits: knowledge and skills that lead to tremendously expanded opportunities for a good job, for earning a higher income, and for making the best decisions possible in everything from personal finance to voting throughout the rest of your life.

But that’s not all. The rest of society benefits too. When more people go to and complete college, there’s a better-educated work force that grows, attracts, and retains the best businesses and industries, for example.

Clearly, everyone should strive for a college education, but many people don’t have the financial resources to pay for college. There are many different types of financial aid that help people pay college costs, however. You just have to know how to tap into it.

So how do you get it?
The best time to start asking about the availability of financial aid is the middle of your junior year of high school. Your best source of information is the financial aid office at the colleges or universities that you are thinking about attending. When you ask for catalogues and other information from these institutions, be sure to ask for financial aid information as well.
In particular, make sure you get information about due dates for financial aid applications. Financial aid funds are limited, and you can lose the opportunity for getting it if you apply too late.

All colleges and universities will ask you to fill out and submit a Free Application for Federal Student Aid (FAFSA) to apply for financial aid offered by the state and federal governments. The FAFSA is available from high school counselors and college and university financial aid offices, or you can complete it online at www.fafsa.ed.gov. Follow the instructions provided with the form or online to complete and submit it.

After you submit your FAFSA, it will be used to calculate your Expected Family Contribution (EFC)—the amount you and your family will be expected to pay toward college costs. The calculation takes a lot of different things into consideration — parents’ income, student earnings, family assets, family size, and the number of family members attending college at the same time. It also takes into account family expenses, such as amount of income taxes paid, housing, clothing and food costs, and your parents’ need to save for retirement.

Within four to six weeks of submitting a paper FAFSA, or two to four weeks if you complete the FAFSA on the Web, you will receive a Student Aid Report (SAR). The Student Aid Report (SAR) will indicate your Expected Family Contribution (EFC).

Calculating Financial Need
Most state and federal aid goes only to students with financial need, and need is determined through a formula. First, the EFC is subtracted from a college or university’s cost of attendance, which includes tuition and fees, books and supplies, and living expenses. Then, any other types of gift aid (financial aid in the form of grants or scholarships that recipients do not have to repay) are subtracted. The result is your financial need.

Each financial aid program has its own set of eligibility requirements, and the financial aid office at a college or university uses the information you submitted on your FAFSA to determine your eligibility for different programs.

After these decisions are made, by early summer the aid office sends you a letter indicating the amounts and types of financial aid they will provide you. Generally, you must advise the college or university’s financial aid office that you will accept all or part of the aid that it has offered to you.

Types of Student Aid
The different types of financial aid include:

• Grants & Scholarships: gifts of money that do not have to be paid back. Scholarships are usually awarded based on grades or some special talent; grants are usually awarded based on financial need.

• Loans: borrowed funds that usually must be paid back with interest.

• Loan Forgiveness Programs: borrowed funds that usually must be repaid by performing some type of service.

• Tuition/Fee Exemptions: programs that decrease the tuition and/or fee charges for eligible students attending public colleges or universities.

• Waivers: programs that allow some non-resident students to attend Texas public colleges or universities and pay the lower resident tuition rate.

• Work-Study: part-time jobs provided by colleges and universities so students can work and earn money.

For More Information
More information about financial aid is available from the Texas Financial Aid Information Center. Call 1-888-311-8881 from 7 a.m. to 7 p.m. Monday through Thursday or 7 a.m. to 5 p.m. on Friday to talk to someone at the center about getting aid. Spanish-speaking representatives are available there, too.

Editorial provided by Texas Higher Education Coordinating Board Staff.