Financial planning is probably the last thing that comes to a student’s mind when they seek out college education. College life is about finding your passion, designing your career path, and understanding the world you’re soon going to join. But the lack of financial awareness can lead to decisions that can haunt you for the rest of our life.
A college education is costly and you can end up with mountains of debt by the time you finish your college education. These debts will not only affect your present choices but also your future. From the choice for a car that you can afford to accumulating savings for retirement, each of your actions will be influenced in one way or another. Moreover, you’ll always feel a pressure to do well in studies and sometimes won’t be able to focus at all amid concerns of mounting debt.
But our aim here is not to discourage you, and certainly not to push you towards quitting your education. We just want to help you realize that financial planning for higher education is important. And, in fact, that’s why we’re here today. In this post, we’ll walk you through some of the most critical aspects of figuring out the numbers with respect to college education. Stay tuned to find answers to some of the most frequently asked questions by students in this regard. look at some of the most frequently asked questions
Before we suggest anything, let’s first understand the basics of managing financials so that we’re on the same page.
- What is the FAFSA?
The first and most important step to get a scholarship for college is FAFSA – a financial aid form that you will need to fill out for all colleges.
- Who fills out the FAFSA form?
According to the education department, students should ideally get it filled by their parents. If you want to fill it without a parent, then for federal purposes, you should be a dependent student. General information about your parent should be filled on the FAFSA form. If you’re not mentioning your parents on tax forms or not living with them, that doesn’t mean that you’re an independent student for purposes of applying for federal student aid.
- What is the CSS?
CSS form is an additional one that many private colleges may avail.
- What is EFC?
EFC stands for Expected Family Contribution; it’s the measure of one’s family financial strength and is a very important component of the FAFSA form. It’s an index number used by the college financial staff to measure how much aid you would receive. It also takes into account the number of siblings in the college to calculate the equation for expected family contribution.
- What is a financial aid calculator?
It’s a handy tool using which you can calculate the expected estimated amount of your family contribution before you fill the FAFSA form. Provided on most college websites, it allows you to predict the approximate cost of attending the college and your expected family contribution. You will need to subtract EFC from COA to determine the amount of financial need. This will help you understand whether you’re going to fit their acceptance criteria of financial aid or not.
- What is Merit based aid?
Merit-based aid is another form of scholarship that will help you to lower college costs. This type of aid is not given on the basis of need or family financial circumstances but is awarded based on your academics, athletic, talent contributions, or any other interest merit. The procedure is the same as others and you’ll be required to fill out the FAFSA form and apply to colleges that offer merit scholarships.
Application Free waivers
Most college applications require a fee and the purpose behind it is to assist the colleges to pay for the cost of your application review and admission decisions. Yet, these fees sometimes become pricey for students if they’re applying for a long list of colleges. Combining all fees like testing and reporting, your applications may require significant money.
Fee waivers offered by colleges allow students to apply without any application fee. Some colleges may even pay for your college visit in case you meet certain requirements.
How to get a free waiver?
There are several methods by which students can get college application fee waivers.
- The College Board’s SAT fee waiver – Students who are eligible for College Board’s SAT testing fee waiver will also be eligible for college application fee waivers. Although this is only possible if your family application falls in income eligibility guidelines, you’re applying under low-income student government programs, or you live in public housing that is federally subsidized.
- Apply online – Many colleges offer fee waiver applications if you apply online.
- Visit the school – Some schools also provide application fee waivers if you pay a visit to their college campus. They don’t require you to be in financial need. The process may be different for every school.
- ACT test – It’s the same as the SAT test fee waiver. If you get eligible for the ACT test, you may also request for a fee waiver or deferral of the college admission application fee.
- Simply Ask for it – If you’re a candidate with good test scores and GPA, you can simply ask for a fee waiver.
- NACAC – The National association for college admission counseling allows students application fee waiver under several schemes. If you meet the requirement for an SAT or ACT testing fee waiver, you will automatically become eligible for the NACAC college application fee waiver.
The Merit money
It is okay for you to rely on your parents for college money, but make sure they’re aware of all the expenses involved. Just because they can pay for your college doesn’t mean they will. It usually depends on various factors such as family structure, age of the parents, their values, and savings. Some parents might just not be willing to sacrifice on their dreams to pay for your college. And things may even get worse when you don’t qualify for need-based aid since you don’t fall under the criteria. This is where merit-based aid comes to your rescue.
The students who don’t qualify for need-based aid can still consider the option of merit aid. It will be based on your academic scores in high school and several other parameters such as leadership roles, good ACT or SAT scores, extracurricular activities, and community involvement to name a few. They may also consider your family income to take the decision sometimes. Ultimately, the decision will be based on why they’re offering the merit. They just need to be sure that their investment is worthy of the aid.
Merit-based aids are highly competitive, and hence, you need to apply early if you want to get in the merit list. Look for criteria and requirements that are needed for qualifying for the merit. Prepare yourself accordingly and always focus on the purpose of the scholarship.
Government funded merit scholarships
National merit scholarships or central government scholarships come in the government-funded category and are other forms of financial aid that you can consider. State scholarships are limited to students of a particular state but Central government scholarships can be availed by students all across the country.
Private-funded merit scholarships
These are the scholarships funded by private corporations, NGOs, trusts etc. They can be limited to a particular area and some are available all over the country.
To wrap it up
Financial planning is important when you foresee yourself as a college student. You wouldn’t want to end up with massive debts with no sources of income in the future. Financial aid is something you should research well. You should be aware of terms like FAFSA, CSS, EFC, and NPC to name a few. Understanding the basics is the key and you should also be aware of the different types of aids available for students. If due to some reasons you’re not able to avail need-based aid, don’t lose hope and look to get some merit-based assistance to manage the finances of your college education. Plan smartly and carefully assess what debt you may end up with. For starters, you should target that it shouldn’t be more than your first year's salary.