College Financial Aid: Where is the Money?
By Dr. Gina La Monica
As parents are analyzing their financial aid awards before the May 1 college decision day deadline looming close ahead many are confused about their child’s financial aid awards. Additionally, some families made the common mistake of only applying to public colleges with the thinking that private schools were out of their financial reach. As I dissect each family’s financial aid award letter, it becomes evident which college is the most affordable for the family.
Generally speaking, public colleges have a tighter budget than private because their budgets are based on public funding, although, there are some public colleges that have done a tremendous job of acquiring huge endowments. Also, public colleges have complex funding restrictions that private colleges do not have to adhere to. With that said, a review of a college’s endowment and past history of giving will provide you with an insight into its financial aid practices. Furthermore, identify if the college’s student awards are need-based versus need-blind. Need-based means the institution funds strictly on the financial need of the family, which the majority of public colleges fall into this category. Whereas need-blind funding means the college funds are based on who they admit to the college, and most importantly, being of lower income or not having the funds to afford the college will not affect your chances of being admitted. Many private universities are need-bind and even state they will secure the student’s total financial costs of their tuition.
Completing the FAFSA and/or the CSS is the first step in obtaining any type of financial aid award. Even if you can afford to pay for your child’s college education, it’s important to complete at least the FAFSA in case the college would like to award your child a merit scholarship that is not need-based. Private colleges persuade overachieving, wealthy students to their colleges through merit awards. These institutions know these students do not need the money, but it is a way to secure their admission.
Your child will be awarded the highest level of funding as a freshman, so it is paramount to obtain these funds from the beginning for the four years of undergraduate education. There will be other grants and scholarship opportunities, but the majority are directed toward freshmen to assure their attendance at the institution. Once a student has committed to a college, there is little or no incentive for a college to offer the student additional aid; hence, financial aid is a vehicle to lure a student to their school. Therefore, when committing to an institution, negotiate as much funding as possible upfront for the full four years.
After completing the FAFSA, the government will calculate an expected family contribution (EFC) for each student that the parents are expected to pay. Thereafter, the remainder of the tuition minus EFC will be covered by various types of loans, grants/scholarships, and student worker funds. There also might be some need that is unmet that parents will have to obtain funding for. Awards vary by student depending on how badly the institution wants that student. Students with higher grade point averages, better test scores, and who complete a more rigorous course study will be more apt to get higher awards.
Dr. Gina La Monica has a Doctorate in Education and has worked as a high school counselor, college administrator, and professor at many universities and colleges including the University of California, Los Angeles, California Lutheran University, California State University, Northridge, San Diego State University, etc. She was a tenured professor and an expert in career technical education and adult learning. She currently teaches at a local college and helps students of all ages from kindergarten to the university level with career exploration, college admissions, learning assessment, tutoring, and education plans.