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Hebron - January 18, 2006

Counselor’s Corner


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

College Financial Aid (Part 2)

Types Of Federal Financial Aid
There are several types of financial aid for students of who wish to pursue post-secondary education. The United States Government is the primary source of financial aid for most students in the United States. The Free Application for Federal Student Aid (FAFSA) assists those who wish to obtain the following types of federal financial aid for attending college: Pell Grants, Supplemental Educational Opportunity Grants (SEOG), North Dakota State Grant, College Work-Study, Federal Subsidized Loans, and Federal Unsubsidized Loans.

What Is The Maximum Amount Of Each Type Of Financial Aid?
The maximum amount of each of these sources of federal aid is:

Pell Grant.........$ 4,050.
SEOG Grant.....$ 4,000.
College Work Study..Varies

Federal Loan Limits
.........................Subsidized ..... Unsubsidized
Freshman ......... $ 2,625. ........ $ 4,000.
Sophomore ....... $ 3,500. ........ $ 4,000.
Third Year ......... $ 5,500. ........ $ 5,000.
Fourth Year ....... $ 5,500. ........ $ 5,000.

Total Undergraduate Loan Limit .....$ 23,000.
Total Graduate Loan Limit .............$ 65,500.

All of the types of federal financial aid listed above are need based. That means that the determination of whether or not a student receives a grant, loan, or college work-study is based upon the students income and assets. If the student is a dependent, then parental income and assets are also taken into consideration. The lower the income and assets of the student and the parents, the higher the need for the student and as a result the greater the financial aid package the student will receive.

What Are Some Types of Federal Loans?
There are various types of loans. Some of the types of federal loans are: Federal Perkins and Federal Nursing Student Loans, Federal Subsidized Stafford Loans, Federal Unsubsidized Stafford Loans, and Parent Loans for Undergraduate Students (PLUS).

Federal Nursing Student Loans: These loans are low interest long-term loans that currently are at about 5%. Interest and principal are deferred while the student is at least a half-time student. The maximum one can borrow on these are up to $ 3,000. per year for undergraduates and up to $ 5,000 per year for graduate students.

Federal Subsidized Stafford Loan: This is the best type of loan for a student to receive. These loans are awarded to students who have the greatest financial need as determined by the United States Department of Education as a result of information on the Free Application For Student Aid (FAFSA). The interest rate changes each July 1st. However, the interest is subsidized (paid for) by the federal government until six months after graduation or when a student drops below half-time student status, or drops out of college.

Federal Unsubsidized Stafford Loan: This is similar to the Federal Subsidized Stafford Loan except here the borrower is responsible for the interest while in school, grace, or deferment. If you didn’t see this type of loan on the college financial award package and you are interested in it, please contact the college.

The Parent Loans for Undergraduate Students (PLUS): This loan is offered by some banks, credit unions, and savings and loan institutions. These loans are not subsidized and the interest is not deferred.

Do I need collateral when receiving a federal student loan?
No, student Loans of North Dakota (SLND) is the guarantor in case of default, bankruptcy, death, or disability. As a result, the guarantee replaces the collateral requirement. The Bank of North Dakota Student Loan Division can be contacted at 1 (800) 472-2166. If you are calling locally, the number is 328-5660.

What Is Involved In Determining Student Dependence or Independence?
When is a student considered a dependent and when is the student considered independent of his/her parents? This is an important frequently asked question. Sometimes it is not easy to answer. Currently, the determination is made based upon the following criteria:

1. Were you born before January 1, 1983?

2. At the beginning of the 2006-2007 school year, will you be working on a master’s or doctorate program?

3. As of today, are you married? (Answer “Yes” if you are separated but not divorced.)

4. Do you have children who receive more than half of their support from you?

5. Do you have dependents other than your children/spouse who live with you and who receive more than half of their support from you, now and through June 30, 2007?

6. Are (a) both of your parents deceased, or (b) are you (or were you until age 18) a ward/dependent of the court?

7. Are you a veteran of the U.S. Armed Forces?

If the student answered “No” to every question, then the student is considered a dependent and the parent’s income and assets are required and included in the determination of need for federal student financial aid.

If the student answered “Yes” to any of the 7 questions, then the student is considered independent for purposes of federal financial aid and the determination of financial need is not based on the parent’s income and assets.

How long will it take until I receive word on my FAFSA application?
It will take approximately 2 weeks to receive a Student Aid Report (SAR) after submitting the completed FAFSA online (about 5 weeks if a paper copy is submitted by mail). The SAR is the student’s proof that the FAFSA form was received. The SAR will show the student’s Expected Family Contribution (EFC). The EFC is the amount that the student and parents are expected to contribute toward financing the student’s college education for the coming school year.

The U. S. Department of Education and most colleges prefer submitting the FAFSA online rather than submitting the paper FAFSA. The online form has less chance of a mistake because someone else doesn’t have to transfer numbers from the paper copy to an electronic format. The online version is also much faster. One college financial aid officer told me that once in a while they have received the information in as short as 2 days from when the student submitted the FAFSA online.

What If There Are Extenuating Circumstances?
If after receiving the award letter from the college(s) you applied to and you have an extenuating circumstance that the FAFSA form did not let you address, call the Financial Aid Director at the college you plan to attend and tell him/her of the situation. The director is likely to tell you to put the extenuating circumstances in writing along with whatever documentation is appropriate and mail it to the office of financial aid at the college you plan to attend. Within a few weeks, the financial aid office will respond. If you have a special circumstance, it is best to contact the financial aid office as soon as possible before all the available aid is allocated to others.

In closing, please carefully read the entire award letter you receive from a college/university prior to signing it. If you have any questions, contact the financial aid office that sent you the award letter. You can decline any portion of the award letter that you do not want including college work-study and loans by crossing them out prior to returning the signed copy. If you have questions about anything on the award letter, please contact the college’s financial aid office.

For more information on financial aid, career information and links, please see my Career Planning website at http://cplanning.org. If you have any questions on career, counseling, or assessment topics, please contact me at Hebron High School at 878-4442, at New Salem High School at 843-7610, or at my residence at 222-3222.

Have an excellent academic day!