Money for College 3 – of red tape and “need”

As the giant mountains for snow slowly transform to great gray mushy globs, it’s time for a similarly mushy subject: need-based aid.

But first, a Shameless Plug! I couldn’t think of any way to connect this to today’s topic, but I am thrilled that one of my heroes, Dr. Thomas Lovejoy, has joined the George Mason University faculty. He has a whole slew of academic accolades and accomplishments, but I’ll admit to knowing him best as the founder of the PBS show, “Nature,” which is, according to the linked article, “the most popular long-term series on public television.”

Need-based aid is, for the most part, determined by the Free Application for Federal Student Aid, or, in street lingo, FAFSA. Actually, it would more likely be “FAFSizzle”, but that’s not important right now. The U.S. Department of Education works hard every year to make the form easier, but the truth is that any way you cut it the form is going to be somewhat time consuming and confusing. On the upside, lots of the information you’ll need is the same as what you’ll put together for your family’s taxes. As a result, the year you are applying for college is a great year to get your taxes done early.

Once you submit the FAFSA, the Department of Education works much magic to come up with your Estimated Family Contribution, or EFC. The EFC is how much the government believes you can afford to pay for college. You can do the estimate yourself – just decide how much you can afford to pay for college and assume it’s a lot more than that.

While the government is deciding how much you can pay, the colleges are reporting how much we cost. Our Total Cost includes room, board, books, tuition, and fees. The basic equation that drives the financial aid system is Total Cost minus EFC equals NEED, the amount of money the government believes you need to afford college. Colleges then try to meet your need in four ways: scholarships, grants, loans, and workstudy.

You’d think that would make things really clear. That’s, however, when it gets REALLY complicated. Each college will have a different mix, higher or lower percentages of scholarships and grants compared to loans and workstudy. And they all have different Total Costs. Bottom line – it can take a lot of time and careful examination to determine exactly what each institution is planning to charge you.

Next up: all the many many many ways your scholarships, financial aid, and costs can change. Be seeing you.


Post-Snowmageddon, Money for College Part deux

Now that digging out from the snow has ensured that my chiropractor’s kids can all afford any college, it’s time to continue helping the rest of you.

The last column covered basic merit-based scholarships, and while these are the bulk of the awards, they are not the only ones. No matter how incredible your academic record, you’ll likely be shocked when that kid who slept all through junior year gets a larger scholarship from the same school. How is this possible? Just remember, scholarships are awarded to help colleges and universities get the students they want to enroll, not to be fair, just, or even reasonable.

Non-academic talent scholarships are probably the easiest to understand. Athletic awards tend to be the best known, along with scholarships in the performing arts (and you can add forensics and other special extra-curriculars to that mix – Shameless plug: Mason’s forensics team continues to have one of the strongest wining records in the nation!). Of course, those tend to be focused on actual talent and what you can do for the team/program/department – so the question is whether the school is looking for a basketball guard or a shot putter, a male dancer or double-reeded instrument player, etc. These are nearly always awarded by the individuals that run those programs: coaches, artistic directors, team directors, etc. While admissions offices will occasionally refer students, in general you want to be in touch with the people that run that team/program/department directly to find out about any funding opportunities in your area of talent. Note: athletic recruitment is a bizarre and complex process – check out the NCAA clearinghouse website for more information.

There are two additional sources of merit-based funds, although neither is nearly as large as the academic and talent awards noted above. The first are donor-based scholarships administered by colleges and universities. These, by and large, are created when someone decides to give money to an institution to assist some group of students they like, or who they feel are like themselves. These can be as basic as strong students in a particular major, or as bizarre as students from a particularly zip code with a certain hair color with experience in both quilting and raising bees. Many of these awards are based on college performance (so open only to students already at the institution) or on financial need (which I’ll go into in one of my next columns). The awards that are open to prospective students are usually listed on the financial aid or admissions websites and/or, on rarer occasions, in the university catalog.

Many external organizations also offer scholarships. There are a variety of websites to help search for these, and your school guidance counselor(s) often have lists of local awards. Beware of any individual or organization that tries to get you to pay to qualify for these funds. Most, if not all, are scams – the information on legitimate awards is readily available online and is nearly always free, although you will often have to hand over your contact information so that the web sites can then sell them back to the colleges, universities and, at times, credit card companies that are, of course, only using the data in your best interests (cue laugh track).

One other way to get that “How in a rational universe is it possible for THAT KID to get a SCHOLARSHIP” feeling: there are an increasing number of offers from very expensive private colleges and universities billed as “scholarships” awarded to students who, to put it bluntly, are shocked to qualify for any award. This is one of the great mysteries/super-secret marketing efforts of the college funding process: many expensive schools know they can charge less and still make money. Of course, it wouldn’t look nearly as impressive if they sent a letter out saying, “You’re not all that academically impressive, but we realize our cost is CRAZY high, and we need a certain amount of students paying SOMETHING to keep paying the gas bills for heating our jacuzzi, so here’s a coupon for a few thousand off our cost. You’ll still pay WAY more than many other schools, but don’t let that worry you.” You can see how that kind of honesty might slow down enrollment. SO much better to call it a scholarship.

Today’s Chronicle of Higher Education has an article noting that some private institutions have gotten REALLY aggressive about this since the economic downtown. One admissions director admitted (bragged) that, when she realized in April that institutional enrollment deposits weren’t what she had hoped, she sent out new, bigger awards to the people who hadn’t yet deposited. What a great feeling that must be for their most enthusiastic and committed students that deposited early. Those lucky students will get to pay more – but since they love the school, I’m sure they’re not bitter about that at all. Be seeing you.

Money for College, part I, in preparation for the snowpocalypse

As I sit here preparing to wage war on the snowy elements, another skirmish comes to mind. Following closely behind the frenzied battle arena that we lovingly call the admissions process is the every-bit-as-stressful and, if possible, even less well understood challenge of seeking funding for college.

I’m by no means a financial expert (really – ask anyone) and will make no attempt to guide you on investment strategies, fiscal positioning, or appropriate debt loads (which, since we’re in the D.C. area, appear to be fine as long as your within one or two trillion dollars of your target). Since even the basic terms we use in the funding for college process can be confusing, however, I’ll use this and the next couple of posts to provide a broad overview of the college funding process (unless, as usual, I get distracted along the way).

Although we call them by LOTS of confusing names, there are really just two basic types for funding support for college that doesn’t come out of your family’s pocket: merit-based and need-based aid.

Merit-based aid is awarded for something you are, have done, or might yet do. It includes, for the most part, what we typically call “scholarships.” Scholarships can be awarded for being a great student, a great athlete, or a great artist. They could also, as I’ll explain further, be awarded for being the only one-eyed, red-haired, tuba playing engineering student at some particular school, although that’s obviously less likely.

The vast majority of merit-based aid is used, to put it bluntly, to buy students. A nicer take is that colleges have goals for our incoming students. We want them to be smart, talented, popular, and, preferably, incredibly successful with a tendency toward long-term donations. As a result, we offer discounts to those students we want most. Calling them discounts, however, would conjure up unfortunate images of clipping coupons and/or car sales, so we use the far more civilized “scholarship” term to make everyone feel better.

It’s important to understand that, in general, admissions officers try really hard to be fair in our admission decisions. Fairness, however, can take a pretty good smackdown when it comes to scholarships. That’s because institutional goals often have more to do with perception – building institutional reputation – than student achievement/quality. Many schools, for instance, never ADMIT that they grant scholarships based on just test scores, and yet offer merit-based aid for national merit semi-finalist status, an award based on…wait for it…just a test score. In general, test scores tend to be WAY more important in scholarships than in the general admission decisions, as is rank-in-class and grade point average (often of the weighted variety). While not universally true, these measures gain more traction in most scholarship award processes as colleges seek to improve measures that raise their rankings profile and/or reputation.

Shameless plug: Speaking of reputation, one of my favorite recent graduates sent me a Facebook message early this week letting me know she had TURNED DOWN the FBI position she was offered (and for which I had recommended her) because the job she took with the company where she interned is SO AMAZING that she’s decided to stay with them. Yes, there are THAT many opportunities in the Mason/D.C. area!!

Most academic scholarships are awarded based on documents you complete when you apply for admission. Some schools have no additional paperwork and just use the admission application. Others (like Mason) add additional essays while others have a completely distinct scholarship application. These differences don’t necessarily have anything to do with how hard or easy it is to get awards – the processes just differ from school to school, so be sure to check carefully for any supplemental questions or documents you might need to complete.

Next up, the answer to the burning question, “How in the heck did THAT kid get a scholarship!!!??!!!” to be followed soon after by, “Is it possible that need-based aid could be ANY more complicated!?!”. Be seeing you.