Financial Aid and Scholarships

Almost everyone worries about the cost of college because it can be very expensive.  Students and families should make good, strategic decisions about college that take cost into account.  Yet it’s important to remember that college is a great investment!  According to 2015 data by the Bureau of Labor Statistics (http://www.bls.gov/emp/ep_chart_001.htm), college graduates make, on average, $24,000 more per year than high school graduates. 

A great overview of Financial Aid information: www.studentaid.ed.gov

There are two kinds of aid for students who attend college:

    • Need-based aid
    • Merit-based aid

Need-based aid can come from the federal and state governments or from colleges.  There are two primary tools to apply for need based aid:

FAFSA (https://fafsa.ed.gov) is the Free Application for Federal Student Aid.  All federal and state aid awards are based on the FAFSA.  Some things to know:

    • The FAFSA application opens on October 1st of the student’s senior year.  It uses financial information (tax returns) from the prior prior year.  So, for a student attending college in 2017-18, families would report financial information for 2015. 
    • Students who have divorced parents use financial information from the parent they live with the most (50.1% of the time) and that parent’s spouse.  If the student lives with both parents equally, it is based on the financial information of the parent who provides more support for the student. 

CSS Profile (https://student.collegeboard.org/css-financial-aid-profile) is an additional aid application tool used by about 400 private colleges to gather additional information about the family’s financial situation. 

Minnesota Dream Act Application https://www.ohe.state.mn.us/mPg.cfm?pageID=2065 state aid for college for undocumented students.

Merit-based aid comes from the college and is given to students because the college wants them to enroll.  Often merit aid is given to students who have grades or test scores at the high end of the applicant pool for that school or special talents that the college values.  Some colleges are more generous than others with merit aid.  Here are some tips and resources regarding merit aid:

Know how to apply for competitive scholarships given by the college.  Some of these are awarded on the basis of your college application.  Others require an additional application.  Read the websites for the colleges you are applying to!

Know which schools are most generous with merit aid.  Below are two lists of colleges that provide significant merit aid:

Time.com 
US News 

Estimating College Costs
Because of need based and merit aid, the posted cost of tuition and room and board may not tell you anything about what the college will cost you.  Below are some tools for estimating college costs. 

Net Price Calculators are required by federal law to be offered by every college on their website.  These calculators will ask for financial and academic information in order to give you estimates of the price of the college after need-based and merit aid.  Ask admissions offices how accurate their net price calculators are.

FAFSA4Caster will give you an estimate of your eligibility for federal financial aid.

Types of Aid

Grants are offered by the federal government, state government, and some colleges based on need. The funds do not have to be paid back.

Scholarships are offered by colleges and private organizations based on student qualifications.  They sometimes require an application and essay.

Work Study is a federal aid award that will allow you to earn money for college by working a job on campus.  A large portion of the pay for the position is funded by the federal government.

Loans are available from the government and from private lenders. 

Federal Subsidized Loans are need based and the government pays for the interest while the student is in school.  The loans are eligible for income-based repayment and other programs.

Federal Unsubsidized Loans are not need based. Every student is eligible for federal unsubsidized Stafford loans that start at $5500 for freshmen.  Interested students must complete a FAFSA. The loans are eligible for income-based repayment and other programs.

Private Loans are offered by banks and eligibility is determined by credit score.  They require a co-signer, the interest rates are higher and they aren’t eligible for special repayment programs. 

Education Tax Credits
Education tax credits are available to families in the year after education costs have been paid. From the IRS:

Education tax credits can help offset the costs of education. The American Opportunity (Hope Credit extended) and the Lifetime Learning Credit are education credits you can subtract in full from the federal income tax, not just deduct from taxable income.

https://www.irs.gov/individuals/education-credits

Financial Aid Night: Financing A College Education (PowerPoint) 

Searching for Outside Scholarships
The most successful students set aside time each week to search and apply for scholarships. Consider making a “scholarship” email address so that when you register on these websites, you don’t clog up your inbox with their messages. 

Peterson’s has scholarship search filters and many other college tools.

UNIGO has many tools including a scholarship list that students can browse and scholarship-matching based on a profile.

Fastweb has long been the go-to site for scholarships. You must make an account and a profile.

Cappex needs you to register. It has a “What Are My Chances” tool that calculates the odds that you’ll get into a certain college before you apply.

Scholarships.com  has a very large database updated daily. It is searchable without a profile, but you can make one.

Reduced Out of State Tuition Options

Reciprocity: Minnesota has agreements with neighboring states to provide lower tuition for Minnesota residents to attend public colleges and universities in those states. This is called reciprocity. Typically, non-resident admission fees and tuition are reduced (or eliminated) if you're a reciprocity student.  Minnesota has reciprocity agreements with WisconsinNorth Dakota, and South Dakota. It also has an agreement with the Canadian province of Manitoba and a limited agreement with Iowa Lakes Community College in northwestern Iowa. 

Midwest Student Exchange: Students from Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota and Wisconsin may be eligible for tuition reductions at certain Midwest public and private schools and programs of study through the Midwest Student Exchange Program.