Getting Started

Updated on March 10, 2008.

WHEN YOU ARE KNEE DEEP in financial aid applications, desperately trying to figure out how you're going to pay for your child's college education, it's easy to forget one thing: The laborious process offers as many opportunities as it does headaches. Though the labyrinthine aid forms make even the 1040 look simple, financial aid officers aren't like the Internal Revenue Service. They use a system you can easily master — and even beat. We'll show you how to squeeze the most out of the financial aid process.

How Colleges Calculate Your Need
Colleges use two numbers to decide on your financial aid package: their annual costs and your "expected family contribution."

They reach the latter number by plugging the information you give them into a federal formula that takes into account family income, total assets, family size, number of children in college, even parents' ages. The more family members attending college and the closer parents are to retirement, the more generous the government will be.

Then schools subtract your family contribution from the total cost of attending college — tuition, books, room and board, transportation and living expenses. The difference is defined as your need. Sounds simple? Don't believe it. There are plenty of gray areas that also determine the amount of aid you receive including:

Mastering the Paperwork
This is the most tedious, but in many ways the most important part of the process. One blank line or miscalculated number and your application can be held up for weeks, putting you at a distinct disadvantage. So, shore up your patience and make your way through the following guidelines:

Everybody must fill out the Free Application for Federal Student Aid (FAFSA), the standardized national form for U.S. government grants, work-study jobs, state grants and such student loans as Perkins (for low-income students) and Stafford. (See Student Loans Demystified for more on those types of loans.)

Next is the CSS/Financial Aid Profile Form, or Profile, which is used by more than 600 colleges, universities, graduate and professional schools to help award nonfederal student-aid funds. The Profile is administered by the College Board, which charges $25 for the application and sending a copy to one school. There's a $16 fee for each additional school. In addition to the standard financial questions there is a section tailored to meet the criteria of each individual. Some private schools — especially the elite universities — have their own financial aid applications, which they may ask you to fill out in lieu of or in addition to the Profile.

Finally, divorced parents may face one more form. Some schools require that a non-custodial parent fill out the Divorced/Separated Parent's Statement, available from each school's financial aid site. If a non-custodial parent's divorce decree specifies that he or she won't be contributing to the child's education, now is the time to let the school's financial aid officer know. Or, for custodial parents who can't depend on their ex-spouse's help, make sure the school's financial aid officer knows of the situation. In either case, this additional information should go straight to the school. Do not attach it to the FAFSA or Profile.

Don't Rule Out Any School, No Matter How Expensive
Private schools sometimes award more generous aid packages to help make up for their higher costs.

Don't Make the Most Common Mistake of All
An overwhelming number of financial aid forms are rejected by the schools for one naggy reason: parents put their own — and not their child's — Social Security number and birthdate on the application.
Back to Top

Two Rules to Live By
If you do nothing else, remember these two tips.

Finding Outside Grants
Students seem to have the most success when they concentrate their search in their own backyards. The best opportunities are often found through community and church groups that award academic and other types of scholarships. To find these check with your high school guidance department. In addition, check with the college you plan on attending if there are any alumni grants you may qualify for.

On the Web, check out the College Board's Fund Finder service, which lists hundreds of sources of aid. Or visit The Princeton Review's site. Its search engine of the "best colleges" allows you to find out what sorts of grants are available at specific schools. Another great source is FinAid.

First of all, only a tiny portion of the $90 billion in financial aid awarded each year comes from third-party sources. And the bulk of that money is tied to such specific requirements — earmarked for Purdue students named Murphy or the winner of the All-American Soap Box Derby — that a student's chances of qualifying are slim. Worse, many schools will deduct the amount of outside scholarships from their aid packages. And what about those billions in unclaimed grant and scholarship money? That number includes unused corporate tuition-reimbursement benefits — not too useful for an 18-year-old high school graduate.

Even the legitimate search firms are rarely worth their $50 to $250 fees. The first questions they're likely to ask are where you live and whether you're a veteran, then they'll fill you in on scholarship money that you'd find out about anyway. For example, Wisconsin's Talent Incentive Program Grant gives up to $1,800 in initial awards (and an additional $250 per semester) to low-income residents who attend in-state colleges or universities. This information can be found with a simple search on the State of Wisconsin Higher Educational Aids Board. "I can't tell you how many times I've seen those automatic grants show up on scholarship databases," says Jeffrey Zahn, financial aid director at St. Norbert College. His point: Why pay a fee to a search firm to "find" you money you can find yourself?
Back to Top