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How to Pay for College

Paying for College is a multifaceted effort combining federal, state, collegiate, private, and family resources, making higher education affordable.  

When considering financial aid, there are merit aid and need-based aid.  Merit is based on the qualities of the student and how it matches up with scholarships that the particular school administers. Award of merit aid is part of the admissions process.  Need-based aid is driven by the calculation of what the student can afford to pay each year given the parents' and student’s income and assets.  This is accomplished through filing the Free Application for Federal Student Aid (FAFSA).  Some private and even larger well-known public universities also use the CSS Profile administered by the College Board. 

Once accepted to attend a college or university, an offer of financial aid follows combining federal, state, and collegiate assistance – grants and scholarships, work-study, and student loans. 

Grants and Scholarships: This is free money, meaning it does not need to be repaid. The more you apply for, the better your chances of reducing the amount you pay out of pocket. Grants and scholarships -- of any size – are valuable because they may cover tuition, fees, room and board, and/or books. 

Work-Study: The federal work-study program is a way for students with financial “need” to earn money to help pay for college expenses. Students work part-time on or off campus while enrolled in college and generally earn hourly federal minimum wages, which cannot exceed a specific number of work hours per year. 

Student Loans: Sometimes, grants and scholarships may not cover your entire tuition bill. In such cases, students can apply for loans. A loan is money you borrow and must pay back with interest. Be sure you understand your options and responsibilities before you sign the dotted line. In the majority of cases, it is better to borrow money from the federal government, which offers lower interest rates, more borrower protections, and better repayment options than private loans. You must submit the FAFSA to qualify for a federal student loan.

Certain students may receive a tuition waiver, which can significantly reduce or eliminate the amount of tuition paid. Waivers are available for adopted and foster children, senior citizens, employees, dislocated workers, and others in special circumstances. 

As previously stated, the submission of an application triggers consideration for merit aid in the majority of cases.  Award of federal, state and  collegiate need-based aid is based on the Student Aid Index (SAI), calculated when the FAFSA and or CSS Profile is submitted.   Each has its unique formula so the SAIs will be different.  It is important to note that every school uses the FAFSA, so plan on filing it after 1 October of the senior year of high school for the next Fall semester.  The deadline is June of that school year to receive assistance in arrears.

That brings us to the current changes that have been made to the FAFSA for high school seniors who will be enrolled in college in Fall 2024.  The new FAFSA is now available for: 

Not to get into the weeds on all the changes being implemented, here are the major items of interest:

  • Concerning divorce or legal separation, the parent who provides the most financial support to the student will be the parent providing their financial information

  • The new FAFSA will ignore whether grandparents or other well-wishers have given money to a child to pay for college costs. 

  • Child support is now considered an asset, no longer income

  • 401k/403b pre-tax contributions will no longer be included in untaxed income

  • Foreign income will now be included as income

  • The sibling discount is no longer available when multiple kids are in college at the same time.  Those already in school will not be shielded from the new rule.  

  • Co-op education earnings will now be included 

  • Negative SAIs are possible with a max of -$1,500, which will be automatically assigned to parents who are not required to file taxes

  • Families with multiple students in college at the same time need to shift their thinking.  We are told that schools that use the CSS Profile need not follow the new “multiple student discount” rule.   Small private schools will become more practical.  

Lastly, Private scholarships and grants are outside of the financial aid process and are sponsored by various organizations and companies.  They are all different, with varying values, requirements, and qualifications.  There are several online search engines that can be used to identify possible scholarships to apply for based on the profile of the student’s profile.  is one of the best.     

At the end of the day, families need to engage an advisor who can help sort through the costs and financial aid, and help create a payment strategy.     


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