The number of universities that plan to replace student loans with grants is growing. Last week, Haverford College announced that it would join the ranks of universities such as Harvard, Swarthmore and the University of Pennsylvania that intend to phase out student loans as part of a student’s financial aid package.
The move toward no-student loan educations is not without the proverbial catch. Universities who are moving toward non-student loan financial aid are generally doing so for only the lowest-income students. Students with higher family incomes can still expect to see college loans as part of their aid packages.
The University of Pennsylvania plans to offer the no-student loan deals to entering students whose family incomes are less than $100,000. The new approach will be introduced for the entering class in 2009. For families whose income exceeds $100,000, the university plans to reduce need-based college loans by 10 percent.
Haverford will also offer the student loan-free financial aid package to the entering class of 2008-09. As of now, Bryn Mawr has no plans to dump student loans.
If you’re just preparing to go off to college, you’re going to become very familiar with the financial aid process. Just about nothing gets done until you fill out the Free Application For Federal Student Aid (FAFSA). Even if you think you will not qualify for Federal Aid, it’s still wise to fill out the FAFSA form. Why? Many federal aid programs require college students to have completed a FAFSA form. Being turned down for Federal aid opens up some doors for aid from other sources that you probably don’t know about.
The FAFSA form today is a far cry from what the it used to look like. You can fill out the form online, which cuts down on the processing time. One thing you should not do is wait until the last minute to fill out your FAFSA form. The form is comprehensive and takes a fair amount of time to fill out completely. Although it’s long, you should still take the time to do it. The FAFSA form does requires that you document some of the information you include in the form. If you’re late submitting your FAFSA, answer questions incorrectly or omit parts of the form, you could be closed out of the financial aid process for that semseter.
The Department of Education (DoE) uses only the first FAFSA you submit to them. If you submit mulitple versions, only the first FAFSA will be used and subsequent submissions will be deleted. This is why it’s so important that you ensure your FAFSA application is fully completed and all information is correct. If you make an error on your FAFSA, you may resubmit corrections online at; FAFSA.ed.gov. You’ll need to apply for a PIN before you can fill out your FAFSA information. If you have a PIN but lost it, you can also request a duplicate PIN from the Department of Education at; PIN.ed.gov .
As part of the financial aid process, your FAFSA will be submitted to as many as six colleges you designate on the application. Each university has been assigned a special code for their college and you will need to enter the correct code for each college on the FAFSA form. Once your FAFSA has been processed, you’ll then receive a Student Aid Report (SAR) in the mail. Once that is received, check it carefully and make sure there are no errors. Keep your copy of your SAR and make sure not to lose it. If your SAR is fully complete and accurate, you’ll see your Expected Family Contribution (EFC) in the upper right-hand corner of the SAR document. Your college will use your EFC to determine how much federal aid you will receive for the year.
Although the FAFSA process is time consuming and requires you to follow the directions carefully. The process is not impossible and will result in the appropriate distribution of financial aid for you and your family. Take the time to fill it out, it will be worth it in the end.
