Applying for College Financial Aid: How It Works and Mistakes to Avoid
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What is the main topic discussed in this episode?
Here's your money briefing for Wednesday, April 27th. I'm J.R. Whelan for The Wall Street Journal. We're halfway through our week-long series about taking on student debt. Today, we focus on one of the more intimidating parts of the process, applying for financial aid, the forms to fill out, the family financial disclosures, the time constraints, and the uncertainty.
There's this assumption that it's kind of arbitrary in a black box, and it's not. But that doesn't mean that it's straightforward and spits out a number that you think is fair, right? What a family thinks they can afford is often quite different from what a financial aid letter will tell you they think you can afford.
Coming up, our higher education reporter Melissa Korn is back with us to go through the nuts and bolts of applying for financial aid, what students and families need to know. That's after the break.
So we've talked about how families with college-bound students can get a handle on their financial situation. We went through the sources of cash that can help make higher education more affordable.
Why is the financial aid application process so intimidating for families?
Now let's go over how to actually get that financial aid. WSJ higher education reporter Melissa Korn has been digging into this area of college finance, and she joins me to break it all down. Melissa, thank you so much for being with us again. Thank you. So Melissa, let's just acknowledge right off the bat that the financial aid application process can seem pretty intimidating. What is it about this process that can make it so overwhelming?
It feels invasive for a lot of families to have to kind of open up their bank accounts, open up their files and tell somebody, here's how much money we make. Here's how much money we spend. Here's how much we think we can afford. And here's how much you think we can afford.
What is the first form every student should file to access federal aid?
So it's invasive. It also is a time consuming process. You have to pull a lot of numbers, pull a lot of records. Fill out a lot of forms. And it's a high stakes process, right? If you mess up a form and you somehow aren't eligible for a particular scholarship, that can have tens of thousands of dollars in costs associated with it.
All right, so let's break things down one at a time. You were with us earlier in the week talking about parents having the money talk with their kids. So once they've settled on a set of schools and they want to apply for financial aid, be it a loan or a grant or a scholarship, what's the absolute first thing a student and their family should do?
So whether or not a family thinks that they will qualify for financial aid, they should fill out the FAFSA. That's the Free Application for Federal Student Aid. That opens the spigot to Pell Grants, which are based on financial need. It opens the gate to loans that students can take out and that parents of undergraduates can take out. It also kind of starts the process of the family being considered for institutional aid, so scholarships and grants that a school might give out based on need or merit.
Where can families find FAFSA instructions and what documents should they prepare?
It's always worth applying for aid. The worst that happens is that it's determined that, no, you don't qualify for need-based aid, but you still can take out loans, even if a school and the federal government determine you don't have a financial need by their calculation. And if loans are going to be a part of the way you pay for college, you need to fill out the FAFSA.
Okay. So how do you go about getting the FAFSA form and getting ready to fill it out?
Yeah, so it's pretty simple. The Department of Education has a ton of details online, very extensive website that goes through all the different types of aid that are available and how to apply, you know, what information you should have on hand when you're about to start the application process. how to make it easier to kind of navigate, you know, have all here at once, have all your files ready to go rather than stopping in and out 10 different times, talks through what information a student needs to provide, a parent needs to provide. So your first stop should be school's financial aid website and the Department of Education's student aid website.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–1:07
2
Why is the financial aid application process so intimidating for families?
1:07–1:45
3
What is the first form every student should file to access federal aid?
1:45–3:01
4
Where can families find FAFSA instructions and what documents should they prepare?
3:01–4:34
5
When do some colleges require the CSS Profile in addition to the FAFSA?
4:34–5:53
6
What deadlines and timing issues affect state and institutional aid decisions?
5:53–7:44
7
How do schools calculate award amounts and what does a financial aid package include?
7:44–10:11
8
How should families evaluate award letters to distinguish grants, loans, and net price?
10:11–12:49
Speakers
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