11 minute read
MAKING SENSE OF FINANCIAL AID
Financial aid for college is a topic that can be as mystifying as it is intimidating. In order to take some of the uncertainty out, we spoke to Fred Amrein, a nationally recognized expert on the subject and the founder and CEO of PayForED, a company that offers software solutions to help navigate student loan and repayment decisions.
Our conversation with Fred will hopefully provide you with a solid foundation as you consider your own financial aid options and strategies.
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➤ At what point in the application process should students begin exploring financial considerations?
Fred Amrein: Most families do not begin to look at the financial aspects until the end of junior year. The problem is that the financial aid process uses a time frame called Prior Prior. This means it uses the tax filing information for college-bound students from their second semester sophomore year and the first semester of their junior year. The tax years and school years do not match. The best time to evaluate your financial aid position is before 12/31 of sophomore year. Any financial decision made after that time will impact financial aid. ➤ What is the FAFSA and what does it mean to me?
FA: FAFSA is the Free Application for Federal Student Aid. It is available every October 1 for the upcoming school year. As an example, the 2022–23 FAFSA will be available on October 1, 2021. It will use the tax information from the tax year 2020. This is related to the term Prior Prior. For most, it means you use the tax return you have in hand on October 1.
Every family should complete the FAFSA. It is critical to the student debt structure and repayment options if grad school will be required.
➤ Are there any basic starting points for evaluating
your options? How does one know where to look?
FA: The first step in evaluating your financial aid position is understanding your Expected Family Contribution (EFC). This is the resulting number a family will get after completing the FAFSA. The FAFSA is the federal financial aid process. The EFC will be changing its name to Student Aid Index (SAI) starting in the school year 2024 or before.
Families need to be careful here. To get the EFC you need to disclose your entire financial life such as income and assets.
Many free websites are collection sites used to collect this data. PayForED EFC calculator does need to be purchased but your data is not sold to any third party.
Each school is required to have a Net Price Calculator on its website. This can be helpful but many are not kept current.
➤ Some financial services provide subsidized loans
while others offer unsubsidized loans. What is the difference between these options?
FA: These are federal loans. A subsidized loan has no interest charged to the loan until the student graduates or stops going to school. Unsubsidized has interest being charged after disbursement.
These types of loans are determined by a student’s financial need. Financial need is calculated by taking the Cost of Attendance (COA) minus EFC = Financial Need
If a student has financial need, the college can include in their financial aid award a subsidized loan up to the need amount with an annual limit of (3,500 (yr1)/4,500 (yr 2)/ 5,500 (yr 3 & 4). They can also receive another 2,000 per year of unsubsidized loans.
If the student has no need they still can get unsubsidized loans (5,500 (yr1)/6,500 (yr 2)/ 7,500 (yr 3 &4). These are the annual limits based on the student’s academic progress.
To get access the family must complete the FAFSA.
➤ Can I appeal a college’s financial offer? If so, how do I
go about that?
FA: Yes, you can always appeal a financial award letter. Most schools have a formal process. Please visit www.payfored.com/ financial-aid-appeal-letter/ to see our recommended process. Any changes in a family’s financial position should be appealed.
➤ What happens if the financial circumstances for a family change after the student is already enrolled?
FA: COVID-19 is a great example. You use the appeal process discussed above. To improve your success, be direct, with numbers and make it short.
➤ Obviously, college is a massive investment and it can
be scary to take on a financial burden like this. Do you have any advice for keeping costs in perspective?
FA: In most cases, proper financial planning is not done and financial transparency to graduation is difficult to obtain. That is why we created the PayForED Process. Colleges only give student financial information one year at a time and it is hard to project total cost and debt at graduation.
Students and parents need to find tools to help them envision their outcome. This includes job opportunities, starting salary, and loan repayment options. The current process focuses on access and not affordability. The expectation of financial aid for most is overstated.
➤ Are there any financial aid tips you find yourself
sharing with families over and over again?
FA: Yes, first off 1) Focus on the outcome, not admissions. Determine the career path as soon as possible – education needed, salary, market demand. Evaluate the career center as part of your visit and the school’s offering. Use the career centers to determine your path or refine it with internship or co-op opportunities. 2) Understand your debt structure. Your student debt structure will determine repayment and forgiveness options. 3) Determine a target graduation date and map your course selection each semester to that date. Many will change majors - have a plan to graduation. 4) Learn proper time management skills. For many college students, it is the first step to independent living and adulthood. It can be a very expensive learning experience if not managed correctly. 5) Graduate on time. Nationally, less than 40% will graduate within four years. An extra year in college is not just the extra cost but the lost opportunity to earn a salary. As an example (college cost 40K + Starting Salary 50K) It is a 90K mistake not a 40K mistake.
➤ Thanks for your time, Fred! Anything else our readers
should know?
FA: It’s important to manage expectations and stress throughout this process. Many have the impression that the colleges are going to select the best students. Many families can not understand why another student got more money, yet their child is a better student. Too often the process is simplified and generalization is applied. Colleges use a process called enrollment management. This brings the admissions and financial aid process together. The colleges are trying to find the right mix of students to fill certain sets at a certain price. It is a business. Admissions and the financial award may not be as straightforward as you would think. As an example, if a business has a job opening for a salesperson, yet a computer programmer applies who is really smart, is the company going to hire the computer programmer or the salesperson?
This is no different for the student who applied as a science major but the school was looking for a business major. It does not mean that the student could not have been successful. It just means they were looking for something else. Students and parents need to know this in order to reduce the stress and emotions of the entire process. The college will never tell you what they are really looking for each year as it changes based on their business goals and direction. CB
Sports Recruiting
By Uriah N. McClain
According to the NCAA, only 2% of high school athletes earn athletic scholarships. Students have a better chance of earning admission into the most selective schools in the United States. So why are so many student-athletes investing so much time, energy, and effort into playing sports when the chances of earning a scholarship offer are so low? The answer, money.
The truth of the college admissions process is that money is often the most important factor in selecting a college or university for families. The financial investment for students and their families in higher education has created a highly competitive environment both academically and athletically. Most college-bound students are very aware of the importance of their GPAs in the college admissions process. However, most student-athletes have no idea how college athletic programs recruit student-athletes.
Every collegiate sports program has a network of high school athletic programs, private club teams, and recruiting methods to identify and subsequently recruit studentathletes for their respective programs. Understanding how the recruiting process works for your specific sport is crucial. You need to know how to get coaches’ attention so that you can increase your odds of earning a scholarship offer.
Using football as an example, players must compete in statesanctioned games to have game film to show coaches. Once the football season concludes, players can participate in flag football, 7on7 tournaments, and various NCAA sanctioned events. These off-season events give coaches additional opportunities to evaluate prospective student-athletes. If the athletic performance of a student-athlete is supported by qualifying grades and standardized test scores, the student may be offered a scholarship (full or partial). Student-athletes may also be offered preferred walk-on status, which offers them a roster spot on the team, with no scholarship. These individuals may also be given more generous financial aid packages.
Here are three things you can do now to help you increase your chances of being a recruited student-athlete. 1. Get your grades in order. The most important thing for student-athletes to understand is that they are students first. This may seem obvious, but the importance of academics first cannot be overstated. The better your grades, the easier it is for coaches to help you get admitted into a school, period. Student-athletes who have higher GPAs make the athletic recruiting process significantly easier. The NCAA has strict guidelines for student-athletes’ GPAs and standardized test scores (i.e., The SAT and ACT). If you do not meet these requirements, you will not be offered an athletic scholarship. 2. Time management. One of the most challenging things for all student-athletes is managing their time. College coaches are investing large sums of money in students they hope will help them win. Students who cannot manage their time will likely struggle to maintain their grades, athletic commitments, and social life. If student-athletes perform poorly academically and/or athletically, they risk losing their scholarships and financial assistance. Learning to manage your time is an essential skill that will dramatically increase your performance academically and athletically. 3. Train to perform. Sport-specific training has many benefits but is not necessary to be an NCAA scholarship athlete. The vast majority of student-athletes competing in college today played multiple sports in high school. The key is to do things that will help you excel in the sport you love to earn a scholarship. If participating in other sports will increase your recruitment chances, or if you just love to play for the sake of playing, do that. Adding a training regimen that includes weight training, diet/nutrition, coupled with speed and agility training, will all help you on your journey towards being recruited. If you have the financial means to secure a trainer, it may increase your chances of getting recruited, but private training is expensive and does not guarantee scholarship offers. BONUS: Social media. Your social media presence is one of the most powerful tools you have as a student-athlete. The ability to reach out and network with coaches is unprecedented. However, like with all things, there are some negatives associated with social media. Beware of what you post. Colleges and universities have spent millions of dollars building their school brands; schools go to great lengths to protect their reputations. Student-athletes represent these institutions and should act accordingly. Individuals that post or share controversial materials place themselves at risk of not being recruited or having scholarship and admissions offers revoked. Student-athletes would do well to treat their online footprint with the respect it deserves. The power of social media should not be underestimated, nor should the potential for it to derail your college aspirations. Scholarships are not the only way student-athletes can continue their athletic careers in college, so it is essential to explore what options are available to you. If you do not secure a scholarship offer, you should not despair. Hopefully, your academic transcript demonstrates that you will be an asset to your future college or university. Can athletics increase your odds of getting into your dream school? Short answer, yes, but the devil is in the details. Student-athletes are not all created equally when it comes to talent and skill. The college recruiting process is unlike any other, but there is one common thread for all studentathletes: all you need to do is convince one school that you are the right fit for them! CB About the author: Uriah N. McClain is a social studies teacher at Collingswood High School in NJ and is the Owner/CEO of Flow Academics, a consulting company for SAT test prep and college admissions.
