If you will be applying for need-based financial aid, you should begin the process early, and you should let your son or daughter’s counselor know. The application process is complex and each institution approaches it differently. Also, if your son or daughter attends the Abbey on need-based aid, please be aware that the formula independent schools use to determine need is more generous than that used by colleges. Finally, most states have government sponsored, nonprofit centers that will help you with the process. The College Planning Center of Rhode Island does an outstanding job- and it’s free to Rhode Island residents.
You should start the process by using the FAFSA4Caster to get your EFC (estimated family contribution) which will help you estimate your eligibility for federal student aid. Your estimate will be shown in the "College Cost Worksheet" where you can also provide estimated amounts of other student aid and savings that can go towards your son or daughter’s college education.
Next, you should fill out the Net Price Calculator (NPC) on each individual college website. You will need your tax returns to do this. Doing the NPC will give you a sense of the range of packages—and will give you an estimate of what you could expect from each specific college. It is reasonable to call individual financial aid offices to discuss these numbers in the process.
Some colleges have a shorthand cost calculator—My Intuition— which doesn’t require specific tax information. This tool gives an EFC range, although that range can be quite large. It is a good place to start, but you should really do the full NPC—and then call individual college financial aid offices with specific questions.
When you start the actual application process, you and your child will each need to obtain an FSA ID – it is your electronic signature for the financial aid process. Then, using the IRS Data Retrieval tool, you must populate the federal financial aid documents in the fall (starting Oct 1) with your tax returns from two years prior. Please note: there is a finite number of spaces to list colleges on the FAFSA. If you need to list more colleges than what is allowed in the FAFSA list, input the first batch of colleges, wait a few days, delete the old list, and input the remaining college names.
Nearly all private colleges require you to fill out the CSS profile. Unlike the FAFSA (which is free), this costs money and lives on the College Board website (the same company that brings you the SAT). You will be able to fill this out in the fall (Oct 1). You can start that process on the college board website.
- Meet Full Need: Means the college will meet the full demonstrated need of the accepted student as calculated by federal formula (and, for private colleges, by the individual college formula).
- Need Blind: Means the college will never review ability to pay as part of the admission process.
- Need Sensitive/Aware: For those students on the cusp (not clear admits or denies) the college reviews the student’s ability to pay as one factor in admission.
- Gap: Means that while the college might be “need blind” they do not “meet full need.” There will be a gap between your estimated family contribution and the money offered in the financial aid package. You will need to make up that gap by paying more than your EFC or securing private loans.
- Unsubsidized Loans: Means that interest starts to accrue the moment one takes out the loan.
- Subsidized Loans: Means that the government pays the interest while the student is in college—and then the repayment process commences (with interest) once the student graduates.
- PLUS Loans: These are issued by U.S. Department of Education—it is your lender. You must not have an adverse credit history. The maximum loan amount is the cost of attendance (determined by the school) minus any other financial aid received. The current interest rate on those is about 4.27%. You can find out more about those here: https://studentaid.ed.gov/sa/types/loans/plus#eligibility
- Perkins Loan: Available to undergraduate, graduate, and professional students with exceptional financial need. The interest rate for this loan is 5%. Not all colleges participate in the Federal Perkins Loan Program. You should check with a college’s financial aid office to see if they participate. The college is the lender; you will make your payments to the college that made your loan or your college’s loan servicer. Funds depend on your financial need and the availability of funds at your college. Find more information here: https://studentaid.ed.gov/sa/types/loans/perkins
- Grants: Free money.
- Merit Money: Many of the top colleges/university do NOT offer merit money—they only offer financial aid to those who are eligible. However, there are some colleges that offer merit money for a variety of different reasons. If, for example, a student is a highly qualified candidate for College X (test scores and GPA well above what the college publishes as the middle 50% of accepted students) and that college offers merit aid, College X might be compelled to offer that student a generous package which would include grants/scholarships.
For a comprehensive glossary of college and financial aid acronyms and terms, see the Financial Aid glossary.
Note: You should NEVER pay for financial aid help or advice!