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APRIL 2023

Get top marks in financial aid

Have you always wanted to get your degree? Would vocational training prepare you for work you’ve always wanted to do? Are you hoping to send your kids to college?

According to U.S. News & World Report, the average cost of tuition and fees for the 2022–2023 school year is $39,723 at private colleges, $22,953 for out-of-state students at public colleges and $10,423 for in-state residents at public colleges.¹ But financial help is available. Get started by taking the five steps below.

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Step 1: Look for “free” money first.

First, try to get “free” financial aid (the kind you don’t have to repay). Scholarships are an attractive type of aid because they do not have to be repaid and many are not based on financial need. They may be awarded to students who have excelled in specific academic areas, or specialty areas such as music or sports. Thousands of private scholarships are available through various companies, organizations, private foundations and clubs. Information may be found online at numerous sites, including fastweb.com or Scholarships.com. Comprehensive guides are published and updated each year on specific scholarships, eligibility criteria, etc., such as the College Board Scholarship Handbook or Peterson’s Scholarships, Grants and Prizes.

Free financial aid usually doesn’t cover 100% of your costs. So you may need to find other ways to pay for college or vocational school, including taking out low-cost loans and using any money you may have saved.

To apply for any financial aid, you’ll need to complete the FAFSA^® form. This is the financial aid application used by the federal government and most colleges and universities. If you list more than one college on your FAFSA, you’ll receive a financial aid offer from each of those schools. These offers will likely contain a combination of free aid and low-cost loans. Review each school’s financial aid offer carefully.

Step 2: Know your deadlines.

Financial aid deadlines are specific to your situation — your school, where you live, what you study.

• The FAFSA deadline is the most important deadline you should know. Check the FAFSA deadlines.
• Deadlines for aid from your state, school and private sources tend to be earlier than those for federal aid.

Make sure you have some way to keep track of all your deadlines. For example, write important dates on a calendar, or track them on your smartphone.

Step 3: Fill out the FAFSA.

You must complete the FAFSA every year to qualify for:

• Federal and most state grants, scholarships, low-cost student loans, and work-study programs
• State programs
• Many school-based financial aid programs

The FAFSA is your ticket to financial aid. Check the FAFSA deadlines.

Step 4: Compare schools’ financial aid offers carefully.

How schools determine your financial aid

The schools that you list on your FAFSA receive a Student Aid Report (SAR), which details your FAFSA results. The SAR reports your expected family contribution (EFC).

Here’s how it works:

• Each school uses your EFC to calculate your financial need. This determines your eligibility for financial aid.

Then each school creates your financial aid offer, which can contain federal, state and institutional grants, scholarships, work-study, low-cost loans, and other aid.

Understand what you have received.

Your financial aid offers will differ from school to school. This is based on differences in the cost of attendance, available aid and school-specific criteria for awarding certain types of aid.

When comparing your financial aid offers, consider the following:

• Calculate the percentage of the offer that is “free” money. You don’t have to repay free money if you continue to meet all the obligations. So the more free money you get, the better.
• Compare “apples to apples” when it comes to the actual cost of attending each school. The actual cost encompasses more than just tuition; it includes books, meals, housing and more.
• Make sure you understand the long-term responsibilities associated with each financial aid offer, and choose the most appropriate offer for your situation:
  • Does your financial aid offer contain any grants that may become loans and require repayment?
  • Will you or your child have time for a work-study job?
  • Are you or your child prepared to pay back any educational loans?

Step 5: Be sure you have the money you need.

Once you’ve received your financial aid award, you need to make sure you have enough money to cover all your education costs.

Know your education costs

• Direct costs — Costs associated with attending school that are included in your award letter:
  • Tuition/fees
  • Room/board (institutionally owned housing)
  • Meal plan
  • Books and supplies
  • Miscellaneous personal expenses, as determined by the school
  • Parking
  • Transportation
• Indirect costs — Additional costs that may require money beyond what’s allotted in your award letter:
  • Off-campus housing
  • Food not purchased through a meal plan
  • Medical coverage

Be smart about borrowing

What should you do if you have exhausted all sources of funding, including scholarships, grants and low-cost federal loans, and you still have college costs to cover? First, contact your school’s financial aid office. Your school may offer payment plans that let you distribute your payments throughout the year.

Consider private education loans only as a last resort. Private education loans often have higher interest rates, more fees and less flexible repayment options than federal loans do.

• Be sure you have exhausted all other financial aid options before applying for a private education loan.
• Borrow only what you need to cover your costs, not what you are eligible to receive.
• Understand the terms of the loan before you agree to (and sign) anything.
• Find out if you can defer payments while in school or get a lower interest rate with a co-signer.

¹U.S. News & World Report. See the average college tuition in 2022–2023.

Sources: Pennsylvania Higher Education Assistance Agency (PHEAA). 5 steps to financial aid.
Resources For Living (RFL^®)*. Financing college: grants, loans and scholarships.

*Resources For Living is available to all employees and members of their household, including children up to age 26 living away from home.

If you or a member of your household is interested in pursuing a college education or vocational training, the following resources can help you discover ways to pay for it. These resources are confidential and available to you at no extra cost.