How do the financial aid programs work at universities such as georgetown or dartmouth?

Question

I'm going to be a sophomore in the fall of '08 and I am becoming a little concerned about college. I'm not going to go into any details with what I do or anything about grades. I'm just curious as to how financial aid works. Do you just apply and get the aid throughout college and pay it back later on? If you aren't in a well-to-do position, do your parents have to contribute to paying the tuition and etc? I've heard that if your parents do not make more than 45-50 grand per year, they aren't expected to help pay off the debt. Please leave as many details as possible: websites, ideas, info, the works. Thank you.

Answer 1

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Answer 2

You know, I'm glad to help, and I don't mean to sound grouchy, but this question is asked and answered 50 times a day here on Yahoo! Answers, and probably 100 times a day on similar forums somewhere else. There's a search box at the top of the page, and the questions from Yahoo! Answers show up on Google searches too. Not that one extra person will find this because of this rant, but it gets a little repetitive answering the same question over and over.

No matter whether you attend Georgetown, Dartmouth, Harvard, Yale, Stanford, Duke, Brown, Cornell or the University of Southwestern Backwater, the financial aid office has the same function. The financial aid office's job is to assess the ability of you and your parents to pay for your college education - then deduct that contribution from the school's "cost of attendance" to establish your financial "need".

Once your financial need is known, the financial aid office attempts to qualify you for various types of assistance that are available.

The primary source of educational assistance for US college students is the federal government. The government places a high value on an educated population - better educated people qualify for better jobs, earn more money, produce better quality products and services and REQUIRE LESS ASSISTANCE from the government. The children of educated parents tend to be better educated, and so on for their children and their children and their children.

The government supports and encourages higher education by doing its part to make college and university education affordable to as many people as possible. The agency that is responsible for coordinating this program is the Department of Education.

If you hope to apply for financial assistance from the federal government, you must first complete a free application for federal student aid, called, get this - the Free Application for Federal Student Aid, or FAFSA.

The FAFSA application asks for lots of financial information about you and about your parents. How much you (and they) earn each year, what kinds of savings and investments you each have, etc. The Department analyzes this information in order to estimate how much you and your parents can afford to pay towards your own educational expenses. For obvious reasons, the government expects you and your parents to foot the bill as best you can.

Using your FAFSA information, the Department of Education computes an EFC, or estimated family contribution. They will send that EFC, along with other information from your FAFSA form, to any college or university that you ask them to send it to.

Once the financial aid office at your college receives your EFC, they try, as best they can, to provide you with whatever financial assistance they have available to them. For most students, this does NOT cover the full cost of attendance.

If you and your parents are particularly financially challenged, your EFC score will be very low - if it falls below a certain number, you will automatically qualify for government grants. A grant is the most desirable form of educational assistance, because a grant is a free gift of money to you from your government. You will not ever be asked (or expected) to pay this money back.

More likely, you will be offered a special type of government-backed loan, known as a Stafford loan. Stafford loans are available only to students who attend an eligible college or university.

Stafford loans are attractive because they carry low interest rates, payment does not begin until 6 or 9 months after you have completed your degree (or dropped out), they are offered to students with any type of credit history (a credit check is not performed) and the loans offer certain borrower benefits, like the right to request a temporary postponement of payments if you experience economic hardship after finishing school.

You may also qualify for state or institutional grants (more free money), scholarships (awarded primarily for academic merit) and a work-study assignment (a part-time campus job that will help pay your college bills).

The federal government also has a companion loan program especially for the parents of college students, the PLUS loan program. The interest rates on PLUS loans are a little higher, and a credit check is required, but qualified parents can borrow the full amount of the difference between cost of attendance and the other forms of financial aid that have been offered to the student.

A couple of things to keep in mind -

Your parents' income is not the only factor used to establish the expected family contribution - as I said earlier, the government will also look at your and their other assets.

Elite universities like Georgetown and Dartmouth are extremely expensive. The financial aid office will assist, as best they can, with your cost of attendance, but there are no guarantees (and in fact, it is extremely unlikely) that your financial aid will cover the entirety of your bill. As a consequence, rightly or wrongly, the expensive private colleges are still mostly the domain of wealthy students from wealthy families - the people who can afford to pay $50,000 a year and more towards the costs of their children's educations.

Most of your assistance will probably come in the form of loans - loans must be paid back. It is entirely possible to borrow $20,000, $40,000, or even $60,000 over the course of a 4-year degree, and your loans could soar considerably higher if you decide to pursue a graduate or professional degree. Student loans are a great benefit, but they can easily become an albatross around the neck of college graduates who did not borrow responsibly. You should always know how much you have borrowed, and how much it will eventually cost you to pay it all back.

The federal government provides an excellent free resource (which you also could have found with a few minutes of google searching) that explains all of this and a lot more. I would highly recommend that you and your parents take the time to read it carefully. I have attached a link to that publication, below.

Now promise me, that before you ask "Will I get into Georgetown?", or "How do I improve my chances of getting into an elite school?" or "How do I write my personal statement?" or "How do I fill out the FAFSA form?" that you will type those questions into the search bar at the top of the Yahoo! Answers page, or at least try Google. Those questions have also been asked and answered 300000000 times.

Good luck, I hope this helped, grouchy or not.