I see it all the time. High schools hold financial aid nights, hosted by a college financial aid officer. Seems to make sense, but the problem is that colleges are businesses and it is not in their best interests for students to really understand financial aid.
These financial aid meetings explain the FAFSA and discuss various types of loans, scholarships and work study. But they don’t tell students what they really need to know about financial aid.
So what do you need to know that the financial aid officers won’t talk about?
- You need to understand how college financial aid works at a particular college. It is not the same for each college.
- You need to understand what percent of need a particular college is likely to meet.
- You need to understand what gapping means and, if the college gaps financial aid, what percent of gapping is typical.
- You need to know what the typical student takes out in loans by the time they graduate.
- You need to know if the college offers merit based loans and, if so, might you qualify.
- You need to know what the 4 year graduation rate is at the college.
- You need to know if the college has a particular package of grants and loans or if it differs depending on the student.
If you need financial aid and don’t understand these questions or don’t know the answers to each of these questions for each college you are considering, you are making a mistake that will cost you thousand’s of dollars.
To understand how college financial aid works, go to my financial aid page and it will all be explained.
To get some of the answers to these questions for the colleges you are considering, check out each college at the CollegeBoard website. Search for that college by name and then look at the page on Cost and Financial Aid. That page will tell you the cost of the college but more importantly, the number of students who had their full need met, the average percent of need met, the breakdown of a typical financial aid package between grants and loans, whether there are merit based awards and the average debt at graduation. If a college does not provide that information, trust me, the answer is not good.
These websites will give you the basic information you need to understand how college financial aid works without relying on the college that is trying to get your money. Want more in depth information about college financial aid? Check out Paying for College Without Going Broke by Kalman Chany. This book is updated each year so make sure you get the most recent edition.