In April, many colleges and universities begin sending offer notifications to students who have been accepted for their incoming freshman class and have applied for financial assistance. Offer notifications list the cost of tuition and fees plus the amount of financial aid available through the school. When you’ve been accepted and receive financial aid offers from more than one school, you need to compare the offers, make a choice, and accept the offer that best fits your needs - and your budget.

How do you compare offers? Follow these guidelines and make a list of pros and cons of each school and the key reasons for your decisions. Most families need to consider the annual net cost of attending each school and the annual cash outlay required of the family. To figure these out, you can make a chart listing each school and include the following:

(A) Estimated Annual Expenses

• Tuition
• Fees
• Room
• Board/meal plan
• Travel
• Estimated price of books and supplies
• Personal expenses

(B) Total Gift Aid (aid that does not need to be repaid)

• Grants and scholarships
• Other gift aid

(C) Net Price = A - B (Each college participating in federal student aid programs should have a net price calculator on their website.)

(D) Work Study / Job Offers

(E) Loans to be Repaid

• Stafford Loans
• Perkins Loan
• Other student loans

(F) Cash Outflow = (C - [D + E])

Once you’ve completed the chart, consider the pros and cons of each school along with the financial considerations. Consider the nontangible factors (your feelings about the school and the environment) as well as the tangible factors (cost, course offerings). Listen to your parents but realize that the decision is ultimately yours.

Understanding the Financial Aid Award Notification

Once a financial aid administrator at your school(s) reviews your SAR, you will be notified regarding your eligibility and the amount of aid you may receive.

Financial Aid Awards
There are two types of financial aid awards: gift aid and self-help aid. Gift aid does not have to be paid back. Self-help aid must be repaid through money or labor.

Gift Aid

• Scholarships are based on merit (for example: good grades, music ability, or athletic skills). Some are also based on need. Scholarships are offered through colleges, the community, and other organizations.
• Grants are awarded by the federal or state governments or by the school and are usually based on financial need.

Remember that the financial awards listed above do not have to be paid back.

Self-help Aid

• Federal Work-Study is awarded to students with financial need. Students can work part-time to earn this award money to help with the cost of attendance. Work-study jobs can be found on or off campus through the school’s Financial Aid Office.
• Federal Perkins Loan is a low interest rate loan that aids students with a large financial need. As long as the student is enrolled in school, the federal government pays the interest on this loan. Financial aid officers at each college determine which students receive these loans and how much they receive.
• The Federal Subsidized Stafford Loan is a need-based loan. The federal government pays the interest on the loan while students are enrolled in college at least half-time. Please note: For Direct Subsidized Stafford Loans made on or after July 1, 2012, and before July 1, 2014, the interest subsidy provided during the six-month grace period has been eliminated. Here are the loan limits effective July 1, 2012. Please note: As of July 1, 2012, graduate and professional students are no longer eligible to receive Federal Subsidized Loans but will still remain eligible for Federal Unsubsidized Loans.
• The Federal Unsubsidized Stafford Loan is non-need based. All students, regardless of need, can receive this loan. Students are responsible for paying the interest while enrolled in school and during any grace period or deferment. Here are the loan limits effective July 1, 2012.
• The Parent Loan for Undergraduate Students (PLUS) is non-need based. These loans are available to parents of undergraduate dependent students, but the parents must have a good credit history. Parents can borrow up to the cost of education as determined by the school minus any financial aid received. Repayment usually begins within 60 days after funds are disbursed. However, rates, benefits, and deferment options vary for each organization or bank offering the PLUS Loan.
• Alternative or Private Student Loans are offered through organizations and banks. Rates, repayment plans, and borrowing limits vary for each organization or bank.

Remember that any self-help aid must be repaid through money or labor. For more information about Subsidized and Unsubsidized Stafford Loans, PLUS Loans, and private student loans visit the Student Loan section of this site.

Comparing Financial Aid Award Packages
Once you receive financial aid award notifications from the schools to which you have applied, it’s time to compare the financial aid packages offered by each school. In order to make comparisons, you should follow these guidelines:

• Compare like terms. Make sure that the cost of attendance is the same for each school before comparing. Some schools may not include transportation or personal costs in their estimated cost of attendance.
• Compare ratio of gift aid to self-help aid. Generally, packages with a higher proportion of gift aid are more appealing because students may have less debt when they graduate. However, more gift aid may mean a larger family contribution at some colleges.
• Compare the terms of any loans included. Will the payments be affordable? Student loans with low interest rates and no repayment until after college may be more affordable than private loans or other consumer loans.
• Compare the effect of scholarships on other aid. If you are applying for or will qualify for outside scholarships, you should determine if it is possible for a scholarship to reduce your financial aid package.
• Check on future packages. What part of the financial aid award is renewable from year to year? Are there requirements for maintaining the awards?

Although very important, the amount of financial aid you receive isn’t the only factor you should consider in choosing a college. Neither the school that offers you the most financial aid nor the most popular school among your friends is guaranteed to provide the right fit for your personal and academic goals, so try to keep an open mind when weighing your options. There may be several schools on your list of choices that balance academic, personal, and financial needs.

After Receiving the Financial Aid Award Notification
After reading the financial aid award notification, you may realize that the awards listed are not enough to cover all expenses. However, there are other loan options that may not be shown on the notice. Your parents may be eligible for the Federal PLUS Program or you could consider getting a private student loan.

After receiving the financial aid award notification, you must let the school know whether or not you are accepting or declining the awards. Not everything that is offered has to be accepted. Declining an award will neither help nor hurt the award. Pay close attention to deadlines for accepting the award package. Deadlines are usually within two weeks after receiving the award notification. If a deadline is missed, you may risk losing a scholarship, grant, or loan assistance.

For more information about the financial aid award notification, contact the Financial Aid Administrator from the college.

College Goal Sunday

College Goal Sunday^SM is a free program that helps students and their parents complete the Free Application for Federal Student Aid (FAFSA), which is the form required by students applying for state and federal aid. This program specifically targets low-income, first generation students, although any student who needs assistance with the FAFSA is encouraged to attend.

Importance of Attending
Submitting the FAFSA is the first and most important step in getting aid for college (i.e. grants, scholarships, work-study, and student loans). You should attend a College Goal Sunday program in your area so you can get assistance from financial aid professionals with filling out your FAFSA. Financial aid administrators will go over each line of the FAFSA in-depth, and you will have the opportunity to ask specific questions. You will also be informed of all filing deadlines. It is crucial to submit your FAFSA as soon as possible, so you won’t miss out on potential aid.

When and Where
College Goal Sunday programs are held during financial aid season. Most states offer the program in February. There are some states that offer the program on Saturdays or even on weekdays. Many states also offer the program at several different locations. Click here to see if/when/where your state is offering a College Goal Sunday program.

Registration
While many states do not require pre-registration, some states ask that students register to attend College Goal Sunday, so administrators can provide the best possible service to students and parents. Visit collegegoalsundayusa.org to begin the registration process. Once you are on the College Goal Sunday site for your specific state, look for a student registration link to register for the program at a location near you.

Materials to Bring
To make the process flow smoothly, be sure to bring the following with you on the day of the program:

• Student’s driver’s license and Social Security card
• Income tax returns or as close an estimate as possible
• W-2 forms and other records of money earned
• Current bank statements
• Records and documentation of other untaxed income received (i.e. welfare benefits, Social Security income, veteran’s benefits, etc.)
• Records of stocks, bonds, mutual funds, and other investments
• Current mortgage information
• Business or farm records (if applicable)
• Documentation that you are a U.S. permanent resident or other eligible noncitizen

College Goal Sunday is sponsored by the Lumina Foundation for Education, and with the help of various agencies, this program should be offered to residents of every state in the near future. If your state does not offer a College Goal Sunday program or you are unable to attend, contact the Financial Aid Office at the school you plan to attend for resources or help filling out the FAFSA.

The College Goal Sunday^SM program was created by the Indiana Student Financial Aid Association with funding from Lilly Endowment, Inc. and with supplemental support from Lumina Foundation for Education.

Preparing To Submit the FAFSA

The Free Application for Federal Student Aid (FAFSA) must be completed by students applying for state, federal, and institutional financial aid. Even if you don’t think you’ll qualify for need-based financial aid, you should still complete the FAFSA to be eligible for student loans. The FAFSA can be completed online at www.fafsa.ed.gov as soon as possible after January 1st of the year for which you are requesting aid. Here are the steps you should take when preparing to submit the FAFSA.

Find out the FAFSA priority deadline for your college(s). Financial aid is awarded on a first-come, first-served basis. Therefore, it is crucial for you to submit your FAFSA in a timely manner. Many priority deadlines are as early as February. Although priority deadlines do not affect a student’s eligibility for federal student loans, if you don’t file early, you may miss out on possible aid opportunities such as money awarded directly from the institution.

Request a Personal Identification Number (PIN). If you file the FAFSA online, both you and one of your parents (if you are required to submit parental information) will need to register for a PIN number at www.pin.ed.gov. PIN numbers are required to sign the online FAFSA application. You can also use your PIN to:

• Review and correct answers on your electronic Student Aid Report (SAR)
• Electronically sign loan promissory notes
• Reapply for student aid every year you are in school
• View information about federal loans and grants you have received

Register with Selective Service. If you are male and at least 18 years old, you must register with Selective Service before you can submit the FAFSA.

File your taxes. Since the FAFSA requires current tax information, try to file your taxes early. If you can’t, you can still submit the FAFSA using estimated taxes. Just keep in mind that you must update your FAFSA using the IRS Data Retrieval Tool once you file your taxes.

Find your school codes. You will need school codes so your FAFSA information can be sent to the schools to which you want to apply. Schools use your FAFSA info to create your financial aid package. Click here to find school codes.

Complete FAFSA on the Web Worksheet. If you are filing the FAFSA online, be sure to complete the FAFSA on the Web Worksheet so you can organize your information. This worksheet allows you to read and complete the questions before entering your information online. The questions are listed in the same order as they appear on the website.

Attend a financial aid workshop. Be sure to attend a financial aid workshop at your school or in your community to learn more about filling out the FAFSA. Financial aid professionals will be able to answer any questions you have regarding the application.

Gather required forms. You will need the following information when you fill out the FAFSA:

• Student’s driver’s license and Social Security card
• Income tax returns or as close an estimate as possible
• W-2 forms and other records of money earned
• Current bank statements
• Records and documentation of other untaxed income received such as welfare benefits, Social Security income, veteran’s benefits, AFDC, or military or clergy allowances
• Records of stocks, bonds, mutual funds, and other investments
• Current mortgage information
• Business or farm records (if applicable)

Know your history. If you filed a FAFSA last year, you can use your PIN number to complete the online Renewal FAFSA. Since many elements of the FAFSA do not change (i.e. your name and date of birth), the online Renewal FAFSA will ask you to confirm last year’s info and provide updated info for other entries such as your grade level.

Most of the above-mentioned steps can be completed before January 1st, which is the earliest you can submit the FAFSA for that upcoming year. By being prepared, you can help ensure that your FAFSA will be filed in a timely manner so you can get as much aid as possible for your financial situation.

Financial Aid 101

Are you clueless about the financial aid process? Here is an overview of the financial aid basics you need to know.

FAFSA
The first and most important step in the financial aid process is to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is the form you need to complete in order to see if you are eligible for any kind of federal financial aid. You should submit the FAFSA as soon as possible after January 1st of the year for which you need aid. Every college-bound student should submit the FAFSA. Even if you think your parents’ income is too high to qualify for aid or you plan on getting a lot of scholarship money, you should still fill out the FAFSA. Income is only one of the criteria on which financial aid is based; and although not every student will qualify for grants or need-based scholarships (gift aid), every student is at least eligible for participation in the Federal Student Loan Program (self-help aid). Furthermore, even if you plan on getting a lot of scholarship money, you never know when there might be more grant or loan money that could cover incidental qualifying expenses, such as room and board, textbooks, computers, etc.

You can fill out the FAFSA for free at www.fafsa.ed.gov. If you file the FAFSA online, you will need to register for a PIN number. You must reapply for financial aid each year by filling out a renewal FAFSA.

Please note: Some schools require other financial forms (in addition to the FAFSA), such as institution-specific forms or the CSS Profile. Schools using the Profile are mostly higher cost, highly selective institutions. Check with the schools you want to attend to see if they require financial forms in addition to the FAFSA.

SAR
The Student Aid Report (SAR) summarizes the information you report on your FAFSA. If you file the FAFSA online and provide a valid e-mail address, you will receive an e-mail within a few days of filing that contains a secure link so you can access your SAR on the Web. You can also check the status of your FAFSA and print a copy of your SAR at www.fafsa.ed.gov. If you file a paper FAFSA or do not provide a valid e-mail address, you will receive a paper SAR in about three to four weeks after submitting the FAFSA. In whatever form you receive the SAR, it is crucial that you review it and make sure it is accurate and complete. If you find anything that needs to be corrected, you can make those changes on the paper SAR and mail it to the Central Processing Center, or you can log into your FAFSA at www.fafsa.ed.gov and make corrections online. The schools you listed on your FAFSA will receive your SAR information electronically. The financial aid office staff at your school(s) will review your SAR and use the information to determine if you’re eligible for aid. One other note: you may notice on your SAR that your application has been selected for verification. (If there is an asterisk next to your EFC, then you’re selected.) If you have been selected for FAFSA verification, read more information on what you need to do.

Award Notification
Once a financial aid administer at your school(s) reviews your SAR, he will put together your financial aid package and send you an award notification. The award notification will include the financial calculation that determines the amount of aid you receive: Cost of Attendance (COA) minus Expected Family Contribution (EFC) = financial need. It will also list the financial aid awards that the college has determined you are eligible to receive. Financial aid awards may include:

• Scholarships. Scholarships are awarded to students based on financial need or to award them for special talents in academics, music, athletics, etc. They are offered through colleges, the community, and other organizations. Scholarships do not have to be paid back.
• Grants. Grants are awarded by the federal or state governments or by the school and are usually based on financial need. Grants do not have to be paid back.
• Federal Work-Study. Federal Work-Study is self-help aid and is awarded to students with financial need. Students can work part-time to earn this award money to help with the cost of attendance. Work-study jobs can be found on or off campus through the school’s Financial Aid Office.
• Student Loans. Student loans must be repaid. The Federal Perkins Loan is a low interest rate loan that aids students with a large financial need. As long as the student is enrolled in school, the federal government pays the interest on this loan. Financial aid officers at each college determine which students receive these loans and how much they receive. The Federal Subsidized Stafford Loan is a need-based, low-interest loan in which the government pays the interest while the student is in school and during deferment. The Federal Unsubsidized Stafford Loan is a non-need based, low-interest loan in which the student is responsible for paying interest. The Parent Loan for Undergraduate Students (PLUS) is a non-need based loan available to parents of undergraduate students and is based on credit history. Private student loans are offered through organizations and banks. Rates, repayment plans, and borrowing limits vary for each organization or bank.

Once you receive the different financial aid award notifications from each of the schools to which you have applied, you need to compare the financial aid packages offered from each school. For more information on comparing the award notifications and for more thorough info on the different types of financial aid awards, please read Understanding the Financial Aid Award Notification. Once you have decided on a school, you should take action by accepting or declining the offered financial aid. Pay close attention to deadlines for accepting the award package. Deadlines are usually within two weeks after receiving the award notification. If a deadline is missed, you may risk losing a scholarship, grant, or loan assistance. If you find that the college you want to attend offers less aid than your financial need, be sure to look into ways of filling that financial aid gap.

MPN
If you choose to accept a student loan, you must sign a Master Promissory Note (MPN). A Master Promissory Note is a legally binding contract in which by signing you agree to pay back the student loan(s) you borrow and agree to all terms and conditions included. Once you sign your MPN, a new one is not required for any new loans (unless required by your school). You can sign a new MPN each year if you want to do so. You can electronically sign (e-sign) your MPN or complete a paper copy. The electronic process is the fastest and most efficient method of meeting the MPN signature requirement. To e-sign, you will need a PIN number assigned by the U.S. Department of Education. (If you filed the FAFSA online, you will use the same PIN number to e-sign the MPN. If you completed the paper version of the FAFSA, you should have been mailed a PIN number by the federal aid processor. If you forgot, do not have, or wish to change your PIN number, go to www.pin.ed.gov.) Your school will provide you with specific instructions on when and how to complete your MPN.

Loan Entrance Counseling
If you choose to accept a student loan, you must also complete entrance counseling. Loan entrance counseling applies only to first-time borrowers. Federal regulation requires that you complete an entrance counseling session before you get your loan (and an exit counseling session before you graduate or drop below half-time attendance). Counseling will show you how to manage your loans during and after college. Your school will provide you with instructions on when and how to complete your student loan counseling.

For more extensive information about the financial aid process, please review all the articles in the Paying for College section of this website. If you have any questions, contact the college’s Financial Aid Office.

When you take out a Stafford loan, you will have certain responsibilities and rights as a borrower. Make sure you are familiar with the following responsibilities and rights before you sign the promissory note.

Responsibilities

• You must provide complete and true information on all of your loan documents.
• You must notify the Direct Loan Servicing Center immediately about any changes to your name, address, telephone number, Social Security Number, or student status.
• You must repay your loan on time even if you do not complete your education, are dissatisfied with the education that you received, or are unable to find employment after graduation.
• You must make repayments on your loan even if you don’t receive a bill or repayment notice. Billing statements or coupon books are sent as a convenience. You are still obligated to make payments even if you don’t receive these reminders.
• You should notify the Direct Loan Servicing Center if you are having trouble making payments. You may be able to postpone or reduce your payments.
• If you apply for a deferment or forbearance, you must continue to make payments on your loan until you are notified that the request has been granted.

Rights

• You have the right to a grace period before your repayment period begins. Your grace period begins when you leave school or drop below half time status.
• Before you begin to repay, you should receive a repayment schedule and detailed information about interest rates, fees, balance owed, and repayment options.
• You have the right to prepay your loan in whole or in part at any time without penalty.
• You have the right to defer repayment for a specific time period if you qualify.
• You have the right to request forbearance.
• You have the right to a copy of your promissory note, and return of the note once your loan is paid in full.

Be sure to read your promissory note for a more detailed description of your rights and responsibilities.

If you will be taking out student loans to pay for college, it is imperative that you borrow responsibly and make sound investments in your education.

Educate Yourself
Be sure to research the different types of student loans and make note of interest rates, eligibility, repayment terms, etc. eCampusTours offers several articles and resources about student loans to assist in your research:

• Borrower Responsibilities and Rights
• Deferments and Forbearances
• Federal Student Loans
• Grad PLUS Loan
• Income-Based Repayment
• Student Loan Repayment
• Student Loan Repayment Calculator

Repayment Plan
It is important to remember that you must repay your student loans even if you do not graduate from college. Use the following budget worksheet to help you determine how your estimated student loan payments might fit into your current budget:

• Budget Worksheet While Attending College

After graduation, hopefully you will secure a job in your field of study. Please keep in mind that student loan repayments should not exceed 15% of your monthly income. Use the following budget worksheet to help you determine your financial situation after college graduation:

• Budget Worksheet After Graduation

As you begin and continue through your college career, please realize that taking out student loans is a commitment. Educate yourself on the implications of student loan debt and make the best decisions for your present and future financial situation.