Eligibility varies when it comes to financial aid

Getting accepted to a college or university is one thing, paying for it is another. These days students and families can be particularly wary about the cost of higher education in the wake of a recession that has seen tuition rates rise across the country. Top that off with some of the misconceptions about financial aid, not to mention a fairly detailed application process, and it can all seem like an incredibly daunting process.

Yet, the federal government has more than $150 billion available in college financial aid every year, not to mention institutional funds such as grants and scholarships that schools award on their own. Nevada’s seven public colleges and universities awarded $544 million during the 2010-11 academic year, the Nevada System of Higher Education said.

College administrators also note that the FAFSA, or free application for federal student aid, which all students must complete before being considered for assistance, has been simplified over the years. Applicants, for example, can now directly attach tax information to the online version of the form via an IRS data retrieval option.

The key is to approach financial aid wisely — carefully consider the terms of the financial award packages, seek advice from college financial-aid personnel and understand that eligibility is as varied as each individual student.

Common misconceptions

One of the biggest misconceptions about financial aid eligibility is the belief that one’s personal or family income is too high to qualify for any aid. But there are many other factors considered, such as number of dependents in the household, and what one pays in federal and state taxes, says Tina Holcomb, assistant director of financial aid for the College of Southern Nevada.

Also, despite what some may believe, there are certain investments that are not considered assets, such as 401(k) retirement accounts and the equity of a primary residence.

“Students will just assume if they’re not hurting and they feel like if they’re not desperately living on the streets, then they absolutely could not be somebody who qualifies, and so that’s the biggest misunderstood thing inside financial aid … but it’s not black and white,” she said.

Christina, a 28-year-old single mom working at a local bank, was convinced her salary was too high to enable her to receive any aid. But when she decided about a year ago to apply to Nevada State College to pursue a bachelor’s degree in psychology, she filled out the FAFSA anyway and ended up with a $700 federal grant.

Eventually, she left her job and took a part-time position as a receptionist at the college and moved with her son into her parents’ home.

“If I was going to get this done then I had to give up working full time and just go full force into school,” said Christina, who asked that her last name not be used.

More grant money followed after her significant dip in income. And, just a few weeks ago, she received a scholarship funded by the Nevada State College Foundation that is large enough to fund her entire four-year education. Christina, who wants to be a clinical psychologist, said that the merit scholarship included a written essay as part of the criteria.

“The biggest sacrifice I had was obviously my income. I had a career previous to this and was making really good money … but I knew deep down in my heart, because this is my passion and that I’m working toward my goal, that it’s going to be totally worth it because I’m going to be able to do something that I absolutely love,” she said.

A full-tuition scholarship such as Christina’s is certainly the exception. But students are only cutting themselves short by letting preconceived ideas prevent them from applying, said Norm Bedford, University of Nevada, Las Vegas director of financial aid and scholarships.

“If it takes you a half hour to complete (the FAFSA) and you can get a $1,000 scholarship out of it or a $1,000 grant out of it, I don’t know too many people that make $1,000 for half an hour of work, that’s a pretty good return on your time for completing it,” Bedford said.

Other roadblocks to applying are the reluctance to share personal information on the FAFSA, or seek any kind of financial help. Neil Woolf, director of enrollment services for Nevada State College, often sees students who are the first among their family to attend college, and many times they are the ones who struggle the most to ask for assistance.

“They’re not used to coming up to strangers and saying, ‘You know what, I don’t make enough money so I need your help.’ And it’s not like that, but it feels like that, particularly for first-generation students who don’t know of all of these resources that are out there for them to use if they just simply apply, but getting students to apply is always the challenge,” he said.

Finally, many have visions of being saddled with debt after graduation if they accept student loans, particularly now. Student-loan debt and delinquency in this country have been steadily rising and is reason for concern. Students and parents need to look closely at the terms of any loans and decide what kind of debt they can realistically take on.

“We try to get students to think about having a loan payment you can afford right out of college, not years later when you’re at your peak earning capacity,” Woolf said.

Getting started

Financial aid staff make it their job to help students walk through the process, particularly when it comes to avoiding mistakes on the FAFSA that can make a significant difference in determining financial need. All schools also are required to provide loan counseling on issues such as repayment responsibilities before a loan is disbursed as well as loan exit counseling when a student is getting ready to graduate, Holcomb said.

The FAFSA is online at www.fafsa.ed.gov. This website also includes a link to studentaid.ed.gov, which answers frequently asked questions, including those about types of federal aid.

There are, for example, Pell Grants, which are based on financial need and, as grants, do not have to be paid back. The maximum Pell Grant for the 2012-13 school year is $5,550.

Besides grant funds, other types of aid include subsidized and unsubsidized federal loans, the former being based on financial need, with the government paying the interest as long as the student is in school at least half time; federal work-study programs, which allow students to take part-time jobs at their school and use the earnings to help pay college expenses; and aid for military dependents.

What students need to remember is the FAFSA not only helps determine who qualifies for federal aid but is often used by schools to help decide their allocations of institutional grants and scholarships, Bedford said. It is important, therefore, for applicants to meet each school’s deadline for submitting the federal form because only so many of the awards are available.

Eventually, a student will receive the financial award notifications from each of the schools being considered, spelling out the details of the various aid packages. That’s when it is time to take a close look and realistically compare the actual cost to attend each school, from tuition to bus fare, with the awards.

Sarah Boeder, executive vice president of operations at Grand Canyon University in Phoenix, notes that this is when the financial aid staff has to be “very conscientious” in explaining to students the details of their award letters so they understand, for example, what kind of debt they may incur.

“Students really need to understand the sources of funding, the requirements for each source and repayment terms. Just pretend everything must be repaid and ask those questions, and then you’ll know directly when it doesn’t need to be repaid,” she said.

Finally, if for some reason the family’s financial status takes a turn, say a parent is laid off or there is an illness in the family that means significant medical bills, students can appeal their current aid award by contacting the college’s financial aid office.

Funding at private schools

Boeder noted that prospective students often look to state-funded colleges and universities because of the lower tuition costs, but points out that private schools award federal aid as well.

Grand Canyon University, a private Christian school with an enrollment of about 25,000, received more than $46 million in federal Pell Grant funds for its students in 2011, she said. Although the published rate for tuition and fees at GCU is $16,500 per academic year, the average student pays closer to $8,000 because of institutional aid alone, she added.

“If you’re a student with a good grade-point average or some other sort of promising skill or way to give back to the university, they are more than willing to share institutional aid with those folks and that can really bring the price down,” she said.

Pima Medical Institute, a medical career college that includes a campus in Las Vegas, offers both certificate and associate degree programs in medical specialties such as respiratory therapy and dental assisting. A typical certificate program at Pima takes about eight months at an average cost of $11,000, according to Chief Operating Officer Fred Freeman. Two-year programs range from $22,000 to $24,000.

Pima students are usually working at least part time while attending school and many fill out the FAFSA form to see if they qualify for federal aid. But even if they don’t, Pima gives students the chance to pay their tuition in installments.

“We allow students to kind of pay as you go. If that works in your situation and you prefer not to take out a loan, you’d rather just pay the school, oftentimes we’ll finance that institutionally with zero percent interest,” Freeman said. “So a lot of folks take advantage of that so when they leave school they have no debt.”

Remember the scholarships

There are all kinds of scholarships awarded by the schools and their foundations, or directly through private donors, and they often have very specific criteria, Bedford noted.

“It’s not wide-open, nebulous,” he said. “(The donors) are looking for characteristics that have some sort of intrinsic meaning to them.”

College websites will usually list information about scholarships, including basic applicant qualifications.

A recent search through the UNLV scholarship search engine, for example, listed awards for elementary education and hotel administration students, but there were also very narrow scholarships designated for cocktail servers, for example, and the child of a firefighter or police officer killed in the line of duty.

Award amounts can be the same every year or listed as “varies” because they are endowment funds dependent upon earnings. But they usually go anywhere from a few hundred dollars to a few thousand, Holcomb said.

The Internet is also full of information on different scholarships not associated with specific schools; it is just a matter of applying for the ones that make sense based on their criteria, Bedford said.

He recommends using the “funnel effect,” or narrowing the choices down to regional scholarships, for example, and those where the criteria fits the student based on specifics such as background, academic interests and talents. He also notes that students can use technology such as Google Alerts, which can automatically notify them via email of any new, relevant scholarship information on the World Wide Web.

Just be extremely wary of any scholarship sources that ask for money or bank account information because there are some scams out there. Donors should be all about giving money, not taking it, he said.

Finally, trying to land the biggest scholarships is not always wise.

“The home run isn’t always necessarily the way to go. I think a $1,000 scholarship sounds good but 10 $100 scholarships do the exact same thing, and so there could be fewer people applying for some of those smaller hits,” he said.