Making Sense of Financial Aid

This is Duke University. “I’ve never done anything like applying for financial aid. How do I get started?” The first thing that I would recommend is that you get a folder and you write financial aid across in front of it. And then when you start filling out your forms or you start looking at the colleges that you’re interested in, you start putting information on the folder. In that way, when you need to know what the requirements are for financially aid for particular school you have it in your folder. “I don’t know if I’ll even qualify for aid. Is it worth the bother to apply?”

I’ve had a student call me to say, “I can’t come and I’m grateful for the offer of the admission but I’m really not going to be able to come in your institution.” And when we’ve dug out a little bit deeper and we find out that she never applied for financial aid and just had eliminated herself from consideration because she just really never thought that she would qualify. And once she applied and we walked her through the process, she was able to come, she was able to afford to come and she’s able to graduate and go off and do great things. So, I think the important thing is not to eliminate yourself from consideration before you even give yourself a shot.

“How do colleges decide how much my family has to pay?” Every school, will establish what they call their budget and that budget is your tuition, your fees, the room, your board, miscellaneous expenses and your book expenses, what they estimated to be your book expenses. So once that budget is established, then, the family contribution that has been calculated is then subtracted from that and what’s left over is what the college sees as your remaining need.

“Will my financial aid come in the form of grants, loans or something else?” Once a need is established, how much you still need in order to able to cover the cost of the college then the college can tell you “Well, this is how much we’re able to give you in grant aid to help you cover that need. This is how much you’re able you to borrow and usually in a Stafford loan which is a federally subsidized loan and then how much you’re able to work on campus in order to earn some money to go out and do the things that you needed to do in college.

“Which kinds of loans are the best for financial aid?” There are lots of different kinds of loans but you want to stick with the federally subsidize loans if at all possible. So the first loan that any family will probably looking at is a Stafford loan and the and most students will qualify for a subsidize Stafford loan which means the loan won’t accrue any interest while you’re in school.

“Where should I look to borrow the money?” I would talk to the financial aid office about what recommended lenders they have and where many of their students actually borrow from and see you can always go to your local bank and apply for a Stafford loan if that’s the bank that you want to use. But you don’t want to go and apply for a private loan or a credit card for example from your local bank in order to help you cover cost. That’s not what the way to go.

“How long does it usually take to repay financial aid loans?” The standard period of loan repayment is ten years. So that if but if you go to graduate school oftentimes those loans will defer so that you have time after your entire education is finished to pay those off ten years after that.

“What happens if my financial education changes while I am in school?” Unfortunately that all kinds of things happen while students are enrolled in school and the financial aid packages are reevaluated every year so all those documentation has to be handed in every year for a new award letter. And sometimes in midyear, things happen. People lose jobs, they have a new sibling, good thing happens too which are expenses. And in those situations you need to be in touch with the financial aid office to make sure that they know what the circumstances are so that they can take to look at the figures they used and see if they can be reevaluated.

“What’s the biggest mistake student make in applying a financial aid?” There are two, one, they don’t apply and, or the second one is that they apply really late. It’s a lost of opportunity. I mean I think if you don’t, once you do it, it’s not quite scary at it was. So I agree that the forms are intimidating, that they’re not the best things filling out. Not something that you want to do. It’s just like going to the dentist, you kind of do it because you have to but you’re much better off because you’ve done it?

“What happens if my parents are divorce?” If your parents are divorced there may be a some additional documentation that is required for each individual schools. So when you go to this school and found out that their financially documentation requirements are, you should definitely check to see what they require from what they will call non-custodial parent.

“What if I don’t live with my parents?” If you haven’t been living with your parents, then on the FAFSA form you need to indicate that you’re not living with your parents and so that their information will not come into consideration.

Produced by Duke University online at duke.edu.