Everything You Always Wanted to Know About Financial Aid (But Were Afraid to Ask)

Frank Resnick, a higher education professional for over 30 years, held an informative information session earlier this week at .  

Catering primarily to parents and guardians of seniors and juniors, Resnick described the process of applying for financial aid, including walking through the common applications used, the Free Application for Federal Student Aid and the College Scholarship Service's PROFILE forms.

Parents should be prepared to start early, be organized, and have copies of personal documents available, such as tax returns. Applications must be filled out every year and are available online. Resnick cautioned that parents should only fill out one each of the"FAFSA and PROFILE forms to avoid confusion. The FAFSA is available at fafsa.gov (not fafsa.com as it is a scam, for-profit site) and the PROFILE at collegeboard.com.

In addition, parents should not assume that their family won't be eligible for aid.  Since the vast majority of aid is funded by the government, programs can change yearly.

According to Resnick, "many parents simply give up after being denied a Pell Grant," one of the most common forms of aid; however, Pell Grants were originally designed for low to low-middle income families, and there is plenty of money available beyond Pell to assist families paying for college.

Understanding the two types of aid and the "needs analysis" are the keys to successfully navigating the process. "Merit-based" aid is a scholarship or grant earned by the student for academic, athletic, or talent achievements and often has strings attached, such as the maintenance of a minimum grade point average while in college.

The majority of funds are "need-based," which attempt to fill the gap between the "Expected Family Contribution" and the cost of attendance. Resnick explained that "the EFC is a fixed number and is determined via a simple mathematical formula" after the applications are completed, and is the same for all institutions to which the student applies.

However, since the need of the population exceeds the funds available for distribution, it's important to apply as early as possible. Resnick noted that "the need for aid can negatively affect admissibility" if the institution does not subscribe to the "need-blind admissions philosophy," especially for marginal students.  Parents should not hesitate to call the financial aid office to ask, as it is public information.

Once an offer of financial aid has been made in writing to a prospective student, parents should carefully evaluate the affordability of the school, remembering to include costs such as books, supplies, and travel expenses.  Since "unmet need," which is the amount left over after the family and institution contributions, can run in the thousands of dollars, parents should inquire early if there is a financial aid appeals process. Resnick considers loans "aid of last resort," since students can wind up tens of thousands of dollars in debt after graduation, with no means of repayment.

Meeting deadlines is critical, and they vary from school to school. Resnick noted that institution websites are "usually very clear" and often have a chart detailing when forms and documents are due. Saving important identification numbers and making copies of all documents speeds the process and saves aggravation later on.

During the meeting, many parents asked about the use of funds from 529 plans and UGMA accounts. Although Resnick was careful to note that everyone should consult a financial advisor, it is better for a student to have no assets when parents apply for aid; the student is required to contribute a higher percentage of personal assets toward their education. The popular 529 plans are considered parental assets.

There are some differences between the FAFSA and PROFILE applications, most notably in how home equity and family businesses are treated. The PROFILE application, which is customized to the applicant, also takes sibling assets into account and allows applicant commentary if there are special circumstances.  Retirement assets are not reported on either form.

Resnick also noted that parents "should avoid hiring professional advisors" that guarantee better aid packages in exchange for hefty fees. Financial Aid offices can answer questions, and there are several free websites as well: finaid.org, collegeboard.com/pay, fastweb.com, meritaid.com, and studentaid.ed.gov were some of the websites mentioned.

Resnick is the Director of Financial Aid for Central Connecticut University and has advised Weston parents for 30 years.