Frequently Asked Questions About Financial Aid
This article was written based on the information and opinions presented by Vinay Bhaskara in a CollegeVine livestream. You can watch the full livestream for more info.
What’s Covered:
- General Financial Aid Questions
- Factors that Impact Financial Aid
- Need-Based and Merit-Based Scholarships
General Financial Aid Questions
What is the process for applying for financial aid?
The process for applying for financial aid can be summarized in four steps:
- Decide if you’re applying for financial aid.
- Complete the Free Application for Federal Student Aid (FAFSA) and College Scholarship Service (CSS) profile.
- Upload your financial aid information so that colleges can verify the information on your FAFSA and CSS profile.
- Receive and review your financial aid offers. You may want to appeal your financial aid award and negotiate a better offer.
For a comprehensive walkthrough of the process, read the Complete Guide to Applying for College Financial Aid.
How accurate is the net price calculator?
The CollegeVine net price calculator is a fairly accurate estimate of what you can expect to pay for college. It takes into account the background of the student and their parents, the parents’ income, cash balances, investments, the composition of the student’s household, and the student’s financial situation.
It is also important that you input your information correctly and accurately. If so, then most net price calculators are acceptable, but some tend to overstate the amount of aid that a student will receive.
Factors that Impact Financial Aid
How do investment properties, such as a rental house, impact a student’s financial aid award?
Parents’ assets are taken into consideration when calculating the expected family contribution. A family’s primary residence is not included in the asset calculation but other properties are included. The contribution from assets is determined by taking the parents’ net worth (sum of assets), subtracting any deductions, and then multiplying this value by 12%. As the quantity and value of assets, including properties, increases, the more money a family is expected to contribute to paying for their child’s education.
How does being self-employed impact the estimated family contribution (EFC)?
If you are a parent who is self-employed, then your financial situation will be evaluated based on the income you earn from being self-employed and the valuation of your business as an asset. The type of business that you operate will determine how your income is calculated and reported on your taxes and whether your business has a valuation.
If you are a parent over the age of 60, how does this impact the financial aid eligibility of your student?
If one or more parents are over the age of 60, the FAFSA and CSS profile will protect a greater portion of that parent’s income and assets.
How does having more than one child attend college impact your expected family contribution?
Contrary to popular belief, having more than one child attend college does not significantly reduce your expected family contribution. Each additional child attending college qualifies for a deduction of approximately $3,340 based on the most recent EFC Formula Guide.
Need-Based and Merit-Based Scholarships
If a student is not likely to receive financial aid, should the student still apply for aid at need-aware colleges?
If you and your family’s financial situation is such that you only have a slight chance of receiving financial aid, it is probably not worth applying for financial aid at the need-aware institutions to which you are applying. Instead, you should focus your efforts on applying for merit-based scholarships.
Does it hurt your chance of gaining admission to a prestigious university if you ask for financial aid?
If the university practices need-blind admissions, then applying for financial aid should not impact your chances of admission. However, if the school practices need-aware admissions, then applying for financial aid will definitely impact your chances of admission. Read this article to learn more about the difference between need-blind and need-aware admissions.
To receive scholarship money, do you need to demonstrate both high financial need and strong academic performance or is one more important than the other?
To receive financial aid, you need to demonstrate high financial need. To receive merit scholarships, you need to have a record of strong academic performance. Selective private colleges disburse more need-based financial aid and non-selective private colleges award more merit scholarships. Consequently, financial need is more relevant at selective private colleges whereas strong academic performance is more relevant at non-selective private colleges in the process of determining which scholarships and financial aid you will receive.
Do you need to apply separately for merit-based scholarships?
There are two different types of merit scholarships: general merit scholarships and specific scholarship programs. Typically, after you apply to a college or university, you will be automatically considered for their general merit scholarships.
For schools that offer specific scholarship programs, there may be a supplemental application that you need to complete. This may require additional application forms, essays, letters of recommendation, interviews, or other materials to submit.
