New Processes for College Financial Aid

My son, who’s an important part of this business, is in his senior year of high school. Financial aid for his post-secondary education is on our minds.

It’s never too soon to think about college costs. Take a look at the financial aid worksheet below to get an idea of the expenses you can expect. It’s from the college tuition information night recently held at Saguaro High School.


Financial Aid Worksheet
Steps ASU recommends to calculate college financial aid

Before I continue, take note that the whole FAFSA process is brand-new this year. Whatever you’ve done for your older kids, or you’ve heard about from friends, neighbors, family, etc., just forget it. It’s a new game out there.

FAFSA: The Gateway to College Financial Aid

So what is FAFSA?

It’s the Free Application for Financial Student Aid. It’s on the web, as and They’re the same site. And it’s very important for your high school senior to open a FAFSA account  because all student financial aid that comes from a college, state, or Federal government goes through FAFSA.

Many private financial aid sources, like grants from employers and community organizations also ask to see FAFSA information before deciding on an award.

The accounts are free. Do not use any service that claims to handle your FAFSA account for you. They aren’t all that difficult to set up and you’re walked through the whole process. Sit down with your kid and open an account together.

FAFSA stores documents you upload to the site that help college financial aid offices and other organizations decide how much funding they will give your student. It also calculates how much a family is expected to contribute to pay for college expenses. These decisions are based on information from your income, taxes investments like the 529 college savings plan, and other financial information.

FAFSA stores student and family financial information online.

In the old days, you had to send all this information by email or US Mail. But for the past several years, this has been done online.

Yes, this means storing sensitive information in the cloud. If you don’t want to do this, then you’re giving up the opportunity to get financial help most kids need for college. Don’t get angry with me: I’m just the messenger! And for what it’s worth, online storage services are harder to hack than email accounts. It’s also a lot easier to make corrections and update information when it’s stored online.

FAFSA will begin accepting information for the 2016 – 2017 college year on October 1. That’s the first day high school seniors can open accounts and start filling out information. The deadline to apply for popular Federal financial aid like Pell grants is June 30, so there is plenty of time.

Keep in mind that students don’t have to open a FAFSA account to apply to a college. Colleges can wait until later in the spring to settle details about how tuition, room and board, and other expenses will be paid.

Beginning this year, FAFSA will be able to tell students as early as January how much financial aid they can get for the upcoming college year. In the past, this information wasn’t available until March. Many competitive colleges need to know as early as May if students will be attending in the fall. This didn’t give families a lot of time to consider options. Now, they have several months instead of several weeks to make these decisions.

What Kind of Financial Aid is Out There?

Once your student gets a FAFSA account started, he or she will begin to receive information about financial aid available. Some aid comes through grants, which do not have to be repaid, while others are loans, which generally do have to be repaid.  Some loans are forgiven (in other words, cancelled) later on in exchange for working certain jobs in certain regions.

Students must prove they are eligible to get financial aid from the government. This doesn’t pose huge obstacles for most high school students.

  • They need to be US citizens or US Nationals
  • They must have a social security number
  • Boys over 18 must be enrolled in the Selective Service (i.e., register for the draft) at age 18. Right now, women are not required to register.

There are some exceptions to these rules. Here’s a link to eligibility requirements—which you will see also requires a FAFSA account.

Many Arizona students who enroll in full-time undergraduate (associate or bachelor) degree programs apply for these federal grants:

  • Pell Grants, which are awarded by the federal government based on financial need. The maximum Pell award for the 2016 – 2017 college year is $5815.
  • Federal Supplemental Equal Opportunity Grants (FSEOG) are given to students whose Pell application shows the greatest need for assistance. They provide up to $4000 per year.
  • The Federal Work-Study Program arranges part-time jobs on campus or with public interest organizations to students who show additional financial need. Students can work for up to 20 hours per week.

Remember, grants do not have to be repaid, ever.

Most grants can be renewed each year.  Virtually all require students to maintain a strong GPA. College admissions offices often steer students, particularly freshmen, for counseling to make sure they aren’t, frankly, blowing away the money or their grades.

There are also college loans to think about.

Most parents and students will want a loan backed by the Federal government because the interest rate (currently 3.7%) is fixed and repayment doesn’t start until after graduation. (These loans used to be called Stafford Loans.) In many cases, payment can be deferred (postponed) until a graduate is settled into a job and earning enough to start paying back the loan.

  • Subsidized loans are granted to students with financial need (according to their FAFSA documents) and don’t charge an interest rate while the student is enrolled at least half-time and for six months after graduation. Deferred loans usually stay interest-free.
  • Unsubsidized loans are open to anyone regardless of financial need but usually carry interest from the moment they’re signed. Keep in mind that colleges determine the amount of a federal loan a student can receive.

Some loans can be completely forgiven if the graduate works in public interest jobs in underserved areas, and/or they maintain an excellent payment record for 10 years.  Here’s more information about government-backed college loans. Note that Perkins Loans are no longer available.

Private loans are what get people in trouble. People (meaning parents) with good credit can usually get a stable bank loan with pretty good interest rates. Some institutional loans (loans offered by the college or university) might carry higher interest rates. Those are the ones you’ve heard about, that leave students (particularly independent young adults) with debts up to $100,ooo or more. Reputable colleges won’t let students go down that road.

Staying in Arizona? You’ll Get Pretty Generous College Financial Aid

Arizona residents get a pretty good deal from the three major public universities. Each of these schools maintain close contact with high school guidance counselors, who are excellent sources for information about  applying for financial aid. Here are links to Arizona universities’ financial aid offices:

  • ASU (Arizona State University)
  • U of AZ (The University of Arizona)
  • NAU (Northern Arizona University)

Our three public universities offer a variety of grants and loans. Their staff work with high school students applying for financial aid and current college students who need to renew theirs. They also help students with less pressing financial need find campus and off-campus jobs.

All three universities participate in the Earn to Learn savings program that encourage students from lower-income families to save for college in exchange for very generous financial help. (Here’s the eligibility chart.) Students who save $500 can qualify for $4500 in college tuition credits: an 8 – 1 return!  The program also provides personal financial training to students and boasts an 87% retention rate, higher than the schools’ average freshman return rate. About 10,000 students will be helped by this program through 2020.

Print Friendly, PDF & Email

Leave a Reply

Name *
Email *

This site uses Akismet to reduce spam. Learn how your comment data is processed.