Financial Aid
Financial Aid Night is being held at Alcester-Hudson. The date and time is TBA.
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CONSIDER ALL YOUR FINANCING OPTIONS AND SCHOLARSHIPS
Scam-Proofing Your Students
It’s that time of year again, when students begin to think seriously about college and how they’ll pay for it. Which means it is also the season for financial aid scams – phony organizations that take advantage of students’ searches for financial aid to gouge them for little or nothing in return. The good news is, you can protect your students from scams by knowing a little about the way these phony companies operate.
Phony Scholarships
In the case of phony scholarships, the student often will receive a notice that in some way promises an award. Either the student has been designated as ‘eligible,’ or she has been named a ‘finalist’ or perhaps has ‘already won.” And then the catch: the fee. The student is told that to win this award, or enter, or to be registered, she has to pay a fee. The problem is that there is no award. Or there is one small award – a small dent in the scamster’s profits – used to lure unsuspecting students into applying for an award they have no chance of winning. Students should be especially wary of any company that asks for a checking account number or credit card expiration date to ‘confirm eligibility.’ This information can enable the company to access the account without the student’s knowledge.
Phony scholarship matching services
Phony scholarship matching services use different tactics. They charge students a fee for a list of scholarship leads. Typical claims include, “You can’t find this information anywhere else”; “We’ll do all the work for you”; or “We guarantee that you will win an award if you use our service.” The outcome? The student receives nothing for their money or they receive a useless list of awards for which they do not qualify – or which may or may not exist.
Phony educational loans
Phony educational loans can prove especially costly. The scammer offers a low-interest loan under the condition that the student pays an up-front fee. The money is paid, but the student never receives the loan. Students should also take care not to be fooled by an ‘official-sounding’ name. While these companies frequently use words like ‘National,’ ‘Federal,’ ‘Foundation,’ or ‘Administration’ in their titles, that doesn’t mean that they are legitimate operations.
Free seminars
Like the phony educational loans, free seminars about financial aid offered by such groups are often thinly disguised sales pitches for a bogus scholarship search or insurance offer. And although the seminar may be held at an official or educational facility, this does not mean that the company or scholarship search is legitimate – the group may not be sanctioned by the institution.
Shady financial aid consulting services
Shady financial aid consultants can be more difficult to pick out. While some offer legitimate services, students should be cautious in selecting someone to assist them in this important task. Financial aid consultants can be helpful to families who don’t have time to fill out the FAFSA, are unfamiliar with financial terms or have special financial circumstances. But students should be wary. Michael Alexander, founder of Student Financial Services, recommends that students find out how long their consultant has worked in the industry. Additionally students should consider the consultant’s qualifications (are they a Certified Public Planner or a Certified Financial Planner?) and call their school’s financial aid office to see if they have had trouble with any particular consultant. Most importantly, students should never use a consultant that encourage unethical behavior, since the student and his or her family will ultimately be held liable for any financial misconduct.
Want to know more? Go to www.fastweb.com for a list of organizations that can investigate your concerns.
Scholarships
Who is eligible? Scholarships are awarded to undergraduate or graduate students based on athletic or scholastic achievement, financial need or a combination. Your high school counselor is the best source for scholarship information.
How do you apply? You must apply for each scholarship separately.
Application deadlines will vary.
Amounts available.
Scholarship amounts will vary.
Repayment.
Scholarships do not have to be repaid.
GRANTS
Who is eligible?
Grants are awarded on the basis of financial need. The federal government funds two major grant programs for undergraduate students-the Pell Grant Program and SEOG (Supplemental Educational Opportunity Grant).
How do you apply?
You have applied for these grants when you fill out your needs analysis.
Amounts available.
For the 2003-2004 school year the maximum Federal Pell Grant was $4,050; up to $4000 for a SEOG.
Repayment.
Grants do not need to be repaid.
WORK-STUDY PROGRAM
Who is eligible? In this federally-funded, need based aid program for undergraduate and graduate students, students work up to 15 hours a week on-or off campus for a governmental or non-profit agency. Students are encouraged to work in an area related to their studies.
How do you apply?
You have applied for Work-Study when you fill out your need analysis.
Amounts available.
Students earn at least the federal minimum wage for their work. The actual amount depends on your financial need and the money your school has available for the program.
Repayment.
Work-Study awards do not have to repaid. They are earned and you will only be paid for the hours you work.
PERKINS LOAN
Who is eligible?
Undergraduate and graduate students based on financial need.
How do you apply?
You apply for a Perkins Loan when you fill out your need analysis. Your school is the lender for these loans and handles the paperwork. You will be required to sign a promissory note for the loan amount.
Amounts available.
The yearly maximum an undergraduate student may borrow is $4,000 and the yearly maximum for a graduate or professional degree student is $6,000.
Costs and Fees.
Interest during the repayment period.
Repayment.
5 % interest. Monthly repayment starts 9 months after graduation, withdrawal or dropping below half-time enrollment. $30 minimum monthly payment; 10 year maximum repayment period.
*The SEOG, College Work-Study Program and Perkins Loans are campus-based programs which are dependent upon financial need and based on the availability of funds at your school.
STAFFORD LOAN
Who is eligible?
Undergraduate and graduate students based on financial need.
How do you apply?
After your school sends you an Award Letter informing you of the loan amount you have been awarded, contact your lender.
Amounts available.
Undergraduate:
$2,625 for the first year of undergraduate study
$3,500 for the second year of undergraduate study
$5,500 per year for each of the remaining years of undergraduate study
$8,500 per year for graduate and professional degree students
Costs and Fees.
Origination fee paid to the Department of Education.
Guarantee fee paid to the guarantee agency.
Interest during the repayment period.
Repayment.
Interest is paid by the federal government while the student is in school and during grace or deferment periods. Repayment starts 6 months after graduation, withdrawal or dropping below half time enrollment.
PLUS
Who is eligible?
Natural or adoptive parents and legal guardians of students who meet federal government, guarantee agency and lender eligibility requirements. A credit worthy cosigner may need to be obtained.
How do you apply?
Call or stop by your local lender.
Amounts available?
$4,000 annually per child. Total aid (including PLUS loan) cannot exceed the cost of education. $20,000 cumulative total per child.
Costs and Fees.
Guarantee fee paid to the guarantee agency. Interest begins from the date of disbursement.
Repayment
Variable interest rate not to exceed 9% simple interest. $50 minimum monthly payment; 10 year maximum repayment period. Repayment begins within 60 days of disbursement. Contact your lender about repayment/deferment options.
Financial Aid is any money you may receive to assist in paying for post secondary education. Financial Aid can be in different forms; grants, loans, work study, and scholarships.
Need-Based Aid
To be considered for need-based financial aid, students must complete the Free Application For Federal Student Aid (FAFSA). This is a financial statement of the student and parents, documenting the amount of money the family can be reasonably expected to contribute toward the student's education. Complete the FAFSA as soon after January 1st as possible, but not before. The FAFSA can be filled out when taxes are completed. You can now fill out the FAFSA online. This is considerably quicker than by mail. To complete the FAFSA online the student and parent will need to register for a PIN number. The PIN number and online version of the FAFSA can be found at www.fafsa.ed.gov/. If you would like a paper FAFSA form please stop in Student Services.