Mr. Buskirk explains in plain English what is changing and what is remaining the same in college funding for the coming year. He also offers a little good advice in the process.

 Blog excerpt from Peter Van Buskirk

Across the country, colleges and universities award billions of dollars in financial aid each year to students whose families could not otherwise afford the cost. In addition, the Federal and state governments provide grants and loans to help families manage college costs.

Unfortunately, the process of finding access to this type of assistance can be very confusing. As a result, many students give up before they can find out how much financial aid they might be able to receive. There are encouraging signs, however, that access to funding is becoming easier and that there will be even more funds available to students.

President Obama and his administration are taking steps to help students achieve their educational goals by making it easier for them to receive much of the funding they need in order to enroll in college. The following are the steps aimed at reducing cost barriers:

• More money is now available from the government in the form of grants (free money) and low interest loans for students from low-income families.
• The form used to apply for financial aid online, the Free Application for Federal Student Aid (FAFSA), has been shortened and simplified.
• Beginning in January 2010, the online FAFSA will automatically access relevant financial information from the tax returns submitted by their families to the Internal Revenue Service (IRS).
• Students can get instant estimates of their eligibility for Federal Pell Grants and Guaranteed Student Loans by using online FAFSA forecasters.

The Role of the FAFSA
The following are the primary sources of funding, in order of importance, for students as they attempt to pay for college.

1. The student’s family is expected to be the first source of funding for college.
2. The Federal Government makes funds available on the basis of “need.”
3. The college the student will attend may offer need-based and merit-based financial assistance.
4. Students attending colleges in the state where they live may also receive funding from their states.
5. In addition, some students receive scholarship assistance from places where their parents work or community service organizations.

The FAFSA is used to determine the amount of money your family is expected to contribute to your educational expenses. This amount is known as the “expected family contribution or “EFC.” The FAFSA also determines your eligibility for funding (grants, loans, work study) from the Federal government and, possibly, your state government. Ideally, the EFC and the funding made available by the government would cover the entire cost of attendance for you at the college you choose.

When the money you get from your family and the government adds up to less than the cost of attendance for a college, you have demonstrated a financial “need” that must be met in order for you to be able to attend that college. Most of the time, that “need” is met by the college itself when it makes an offer of financial aid.

While these new developments are very exciting in terms of how you can gain access to money that can help pay for college, there are three things you need to keep in mind.

1. Your ability to complete the new FAFSA may depend on the availability of tax (IRS) returns for your custodial parent(s) or guardian for the most recently completed tax year.
2. The online FAFSA forecasters will not always tell you how the colleges themselves will assess your expected family contribution (EFC). In particular, many private colleges use the College Scholarship Service (CSS) Profile, a form that often determines a higher EFC.
3. Even if a college agrees with the EFC reported by the FAFSA forecasters, it may not provide financial aid to meet your need.

The bottom line: make sure you understand from each college how it will determine your EFC and, subsequently, your financial need. The reality is that colleges and universities fund the vast majority of financial aid that is awarded each year. In doing so, they are not obligated to meet a student’s full need as demonstrated by the FAFSA or the Profile. That’s why you also need to find out from colleges how they will provide financial aid to meet your need. While you are not likely to receive any guarantees of funding, it is certainly worth exploring these questions with each of the schools on your list before you apply for admission. Do not make any commitments to enroll until you are satisfied that you will have the necessary financial support.