Paying for College

Paying for college can seem overwhelming. Please remember that we're here to help you. This helpful guide covers the following information.

Defines financial aid
Describes the major financial aid programs
Explains the application process
Describes what happens after that
Shows you what aid is available
Answers your questions

Financial Aid is...

Gift aid (32%):
Scholarships
Grants

Self help aid (68%):
Loans (66%)
Employment opportunities (2%)

Financial Aid Can Be...

Need based:
Eligibility is based on the family's financial situation as determined by a federal formula from information provided on the financial aid application (FAFSA).

Merit based:
Eligibility is based on a specific attribute such as grades, artistic ability, athletic ability, etc.

Definition of Need

Cost of Attendance (school determines tuition and fees) - Expected Family Contribution (use figures from financial aid application) = Financial Need

Different School = Different Need

View Graph

What is the FAFSA?

FAFSA stands for Free Application for Federal Student Aid. It is available in paper form, typically sent to high schools, or in electronic form, which is preferred by ACC. The electronic version is quicker and more accurate, and can be signed electronically by parent and student with a PIN. You can access the electronic form at www.fafsa.ed.gov.

The information you provide in the application is used to determine your Expected Family Contribution. Please be aware of the deadlines to submit the application and beware of scams. The FAFSA is always FREE.

After the FAFSA

The college or university:

Receives the FAFSA results (Expected Family Contribution). You may be asked for additional information to complete the application process.
Uses the Expected Family Contribution to determine eligibility
Sends an award letter to notify the student

Sources of Aid

Federal programs
State programs
College & university programs
Private programs

Major Federal Programs

Pell Grant

Based on EFC and goes to neediest families
Maximum of $4050 this year

Federal Work-Study

Employment opportunity (usually on campus)
Paid periodically through payroll

Federal Perkins Loans

Fixed interest (5%) loan goes to neediest families
Nine-month grace period before repayment
Up to 10 year repayment
Deferment and cancellation provisions

Federal Stafford Loan

• Federal Family Educational Loan Program (FFELP) - funds provided by commercial lenders like banks, credit unions, and Nelnet
• Ford Direct Loan Program (Direct Loans) - funds provided by the federal government
• Loans may be subsidized (based on need) or unsubsidized (need not considered) or a combination
• Yearly undergraduate loan limits
  • $2625 1st year
  • $3500 2nd year
  • $5500 remaining years
• Variable interest rate capped at 8.25%
  • Currently 2.77% in school, 3.37% in repayment
• Loan fees deducted from proceeds
  • Up to 4% depending on lender
• Six-month grace period
• 10 to 20 year repayment period
• Deferment and cancellation provisions

PLUS Loans for Parents

• Variable rate capped at 9%
  • Currently 4.17%
• Loan fees deducted from proceeds
  • Up to 4% depending on lender
• Credit based loan
• Repayment usually begins 60 days after full disbursement

State Programs

• Various state grant, scholarship, loan and work programs
• High school counselors are best resource for information
• Watch deadlines!

College and University Programs

Schools may offer grant, scholarship, loan and/or work programs.

Be informed:

• Financial aid office
• Admissions office
• Publications
• Web site

ACC priority deadline for fall semester is June 30th.

Private Sources

• Scholarship search - start NOW!
  • Internet: nelnet.net/collegeplanning
  • Counselors
  • Community people
• Beware of scams
• Watch deadlines!

Check List

• Scholarship search
• Complete the FAFSA
  • Supply any requested info to college
• Receive award letter
  • Respond if required
• Apply for PLUS Loan, if needed
• Sign promissory notes, if required
• Funds are disbursed by college

Other Financing Options

• Credit cards
  • Typically 9% or higher interest rate
• Home equity loans
  • 4 - 5% interest rate
  Possible tax deductions
• Private (alternative) loans
  • Variable interest rates (usually higher than PLUS Loan)
  • Possible tax deductions

Common Questions

I know we don't qualify so why should we apply?
Everyone qualifies for something.

My parents are divorced so whose income do I report?
The one you lived with the most in the preceding year.

Can I exclude my stepparent's income?
No.

What if our income changes?
See the financial aid office at the college.

Why do I have to provide my parent's income information? Why am I considered dependent?
By law, you are considered a dependent until you:

are age 24
are a graduate/professional student
are married
have legal dependents other than a spouse
are veteran of the US Armed Forces
are an orphan or ward of the court