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Hebron - February 2, 2005

Counselor’s Corner
By
Dr. Gaylynn Becker
National Certified Career Counselor
Hebron & New Salem High Schools

Financial Aid: Part 3 In A Series

What happens after the college receives my FAFSA information?
After the college receives the student financial information from the federal government based upon the information the student and parents placed on the Free Application for Federal Student Aid (FAFSA) form, the college will send the student a financial aid package. This package will indicate the amount of various grants, scholarships, work-study, federal subsidized and federally unsubsidized loans, and any other financial aid that the student is being offered. The student and parents should examine this financial aid package from the college. If the student is agreeable to what is written on the form, the student signs the form and returns it to the college.

If a student applied to more than one college and also indicated these additional colleges on the FAFSA, the student will also receive financial aid packages from these other colleges as well. Looking at the total financial aid package sometimes really assists the student in the college selection process as one college may cost significantly less. Sometimes a college that has higher tuition, fees, board and room rates may offer more in various forms of financial aid and may in the end actually cost less. The financial aid package provides this bottom line financial information.
As one can see the federal financial aid a student receives does not come directly from the federal government but rather is channeled through the college financial aid office. This package however is heavily based on the information placed on the FAFSA.

Do I Have to accept the entire financial aid package offered by the college?
No, one does not have to accept the entire financial aid package offered by a college. Prior to accepting the financial aid package from a college, the student should understand the various types of financial aid in the package. For example if a loan is accepted, understand whether the loan interest is paid for by the federal government while you attend college (subsidized federal loan) or if after a few weeks you need to begin making payments with interest on the loan (unsubsidized federal loan). In most unsubsidized loans, the borrower can elect to have the interest added to the principal instead of making the interest payments while enrolled in college on a half-time basis or more. However, this needs to be communicated to the lender in advance.

If the student does not want some of the financial aid that is being offered – such as a federal subsidized or unsubsidized loan, work study, etc. – the student may cross out and indicate on the form that the student is not accepting certain parts of the financial aid package that is being offered. Then sign and return the form to the Financial Aid Office that sent it to you. Be sure to photocopy the letter and keep it for your own records.

If application was made to more than one college and if these colleges were listed on the FAFSA, the applicant will receive a financial aid package from each institution. Contact those institutions that you will not attend as soon as you have decided not to attend them so that they can make their necessary changes as well.

How come is the amount of the loan sometimes less than what is listed on the financial aid package from the college?
Sometimes students and parents accept and sign the documents without understanding what is being signed. Also, if a loan is being signed, be sure to understand how much of the principal of the loan you the borrower are receiving. Be aware that usually the lender keeps a percent of the federal student loan as an up front fee and the borrower actually receives less than the face amount of the loan. The borrower will pay interest on this fee and will also need to pay this part of the principal that the lender keeps.

An origination fee (currently 3%) on all federal subsidized and unsubsidized loans is applied. In addition, a guarantee fee (not to exceed 1%) may also be applied. Currently, Student Loans of North Dakota (SLND) - a unit within the Bank of North Dakota - does not charge a guarantee fee.

Completing the FAFSA Online
The FAFSA can be completed not only in paper format but can also be completed online at http://www.FAFSA.gov. If you go online to complete the form and the website wants money from you for completing the FAFSA online, you are on the wrong website.

If you do complete the FAFSA online you will need a Personal Identification Number (PIN). This PIN is your online signature. A PIN can be obtained by either going to http://www.fafsa.ed.gov and selecting the button for getting your PIN or you can go directly to the PIN website at http://www.pin.ed.gov.

Completing the FAFSA does take time. If the FAFSA is completed online and if one wishes to save the information and complete the FAFSA at a later time, the use of a password will save your work until a later date.

I hope that this series of articles has been helpful in understanding some of the basics of the college financial aid process.

For more information on career information and links, please see my Career Planning website at http://www.cplanning.org. If you have any questions on career, counseling, or assessment topics, you can e-mail me at Gaylynn.Becker@sendit.nodak.edu. You can also contact me at Hebron High School at 878-4442, at New Salem High School, or at my residence at 222-3222.

Have an excellent academic day!