Financial aid, FAFSA, loans — these words can make parents and their college-bound students confused and anxious. Fortunately, a few tips can help parents navigate college finances.
Fill out the FAFSA
FAFSA is the Free Application for Federal Student Aid and is used to determine a student’s and their family’s ability to pay for college. While it helps determine access to federal aid, such as grants and loans, it’s also required to secure other types of funding, such as state grants and sometimes private scholarships.
Filling out the FAFSA does not require the student to use the FAFSA funds, but it does help the student figure out how much federal aid they can access if needed. Students who don’t fill it out could be missing out on much needed financial aid.
“Though you may think you won't be eligible for federal financial aid, the algorithm which determines eligibility takes a lot into account and the vast majority of Americans are eligible for some federal assistance in the form of grants or low-interest student loans,” said Ashleigh Zimmerman, financial literacy coordinator at Southern Utah University.
There is a timeline associated with the FAFSA and the sooner it is completed the more likely a student and their family is to get a sum approved so they can receive financial aid offers from colleges and universities. FAFSA applications open Oct. 1 of a high schooler’s senior year.
Southern Utah University’s Financial Aid Office breaks the FAFSA application into two easy steps:
- Visit the Federal Student Aid website and create an FSA ID. The FSA ID gives access to the Federal Student Aid's online system and can serve as a legal signature.
- Once an FSA ID is set up, visit FAFSA.gov and complete the online Federal Application for Federal Student Aid (FAFSA). FAFSA applications can be complex and colleges have designated financial aid counselors to guide parents and students through the process.
Help find scholarships and grants
Whether it is the Dean’s List scholarship offered from a college of choice or a $500 scholarship from a local business, there are generally more scholarship opportunities available than students or their parents realize. Parents can help their child by guiding their search.
Start looking early. Make a scholarship application plan in the sophomore or junior year of high school or early in the senior year by finding a list of scholarships, their application deadlines, and their requirements. Compile a search list from reputable scholarship search websites, foundation or business websites, and college websites. Most high schools have an extensive list of available scholarships. The U.S. Department of Labor also keeps a list of over 8,000 scholarships.
Beware of scam scholarships or sweepstake scholarships. If it seems to good to be true — it is. A legitimate scholarship requires essays or at least a few short-answer responses and additional support such as transcripts, SAT/ACT scores, and recommendation letters. Most scholarships have minimum GPA requirements, although some private ones may have exceptions. Beware of scholarships that are awarded monthly and ask for nothing more than personal information. Legitimate scholarships are awarded once or twice per year.
Research private student loans
What happens if financial aid and scholarships are not enough or not an option? Consider researching private student loans. Most students have not established a credit history and are more likely to receive a private loan with a co-signer.
Research is key in this phase of securing funds, as there are many options for private student loans. Interest rates, terms, and benefits vary. This is where a parent’s experience can go a long way towards helping a student get the best deal.
Teach budgeting skills
Zimmerman has three ways parents can help their children manage their money once they start college.
1. Talk about money with your children. Sharing your struggles and successes can help set your child on the right path. College is often the first time students will engage with financial products and there is a lot of temptation for students to live outside their means by using too many student loans or credit cards. Help students estimate their monthly expenses and plan for how they will pay them.
2. Help students learn to grocery shop and cook for themselves. This may seem silly, but eating out is the number one thing students blow their budgets on. College can be hectic, so having a few fast, simple meals to throw together will help students stay on budget and make healthy choices.
3. Tell students to utilize their school's financial wellness or personal money management programs to learn more about their financial aid and how to manage their money while they are in school and after they graduate.
Paying for college and managing money during college is a process that requires planning and research. Finding and using the right resources for parent and child can help the financial planning journey be a lot less confusing.