Forms and Resources

10 Tips for Undergraduates on Paying for College

1. Think about the total cost. Parents and students are focused on their first year, but they need to know that the national average for a “four-year degree” is five and a half years . What will that cost? Understand the big picture.
2. Learn the difference between scholarships, grants and loans. Work with an admissions counselor or a financial aid counselor who can talk you through the award and explain each aspect of it.
3. Ask about fees and costs on top of what’s in the award paperwork. Find out if there are any fees not showing up on the award letter. Fees at some colleges amount to more than $1,000 per year. Are they included in the award letter? Or will they be added to the bill when classes begin?
4. Scholarships are not just for freshmen. Many students and parents are unaware that scholarships are available through a student’s college career, not just at the outset. Can you save money further down the line?
5. Find out about scholarship renewal requirements. When asking about scholarships, find out which are renewable and the requirements for renewal. How many times is it renewable and what are the requirements?
6. Find out if “outside” scholarships from a church, a workplace, or a business are “stackable.” Does the college stack that financial aid directly on top of the other scholarships and grants they have offered? How will a scholarship affect your aid?
7. Mind the gap. Will your family need to take out any alternative loans to cover the gap between financial aid and total cost? Work with financial aid counselors to compare loan options side-by-side to determine the best option.
8. Pay attention to the “Universal Reply” date of May 1. This is the date by which most colleges will refund deposits if a student chooses another college. Talk to each college about the significance of this date.
9. Make sure you understand everything. Ultimately, you have to work to reach a point of crystal clarity on your financial aid award letter – parents and students need to know exactly how much their degree is going to cost and what out-of-pocket costs they will have to bear.
10. Rankings are not the whole story. College and university rankings may or may not be the most effective guide for deciding where to attend. Is a higher ranked, more expensive college best for you? A school needs to be the right fit for the student first and foremost.

Award letter

A letter sent from the Financial Aid office notifying students of the types and amounts of funding they are eligible for.

Cost of attendance (Cost of education)

The average amount it will cost a student to go to school. This figure includes tuition, fees, books, supplies, transportation, room and board, and miscellaneous expenses.

Expected Family Contribution (EFC)

An indicator of the student’s financial strength based on the results of the FAFSA (Free Application for Federal Student Aid).

Federal processor

Agency designated by the U.S. Department of Education to process your FAFSA answers and calculate an EFC.

Financial need

The difference between the student’s cost of attendance and the expected family contribution.

Free Application for Federal Student Aid (FAFSA)

The application students must complete to have their financial need determined.

Grant

An award that the student does not have to repay.

Guarantee/Origination fee

A fee that is deducted from the proceeds of a loan.

Independent student

As defined by federal regulations, a student where a contribution from parents is not expected.

Office of Higher Education (OHE)

The state agency that administers all state financial aid programs.

Need-based financial aid

Financial aid awarded based on need. The Pell Grant, Student Employment, Perkins Loan and Subsidized Stafford Loan are examples of need-based financial aid.

Non-need-based financial aid

Financial aid not based on need. The Unsubsidized Stafford Loan, SELF Loan, PLUS loan and private/alternative loans are examples of non-need-based financial aid.

Origination fee

A fee charged by a lender for processing a loan application.

Parent PLUS Loan

A non-need-based, unsubsidized loan for a parent of a “dependent student.”

Parents’ contribution

The portion of the Expected Family Contribution (EFC) to be provided by the parents of a dependent student.

Pell Grant

The Pell Grant is a federal grant awarded to undergraduate students who demonstrate financial need based on the results of the Free Application for Federal Student Aid (FAFSA).

Perkins Loan

A need-based loan funded by the federal government and administered by the college. Loan repayment is made directly to the college attended.

Professional judgment

A decision made by the Financial Aid office to consider unusual circumstances that cannot be determined from the information on the FAFSA. The professional judgment form is available on our forms list.

“Prom Note” (Master Promissory Note)

The contractual agreement between a borrower and a lender in which the borrower agrees (promises) to pay back money to a lender according to specified terms and conditions.

Satisfactory Academic Progress (SAP)

Students must maintain a cumulative grade point average at the minimum standard or higher and complete the minimum number of course credits required to complete degree requirements in the maximum allowable time frame. These standards must be met for students to receive federal, state, or institutional funding.

Scholarship

An award given to a student based on academic achievement and/or financial need. This funding does not need to be paid back.

Student Aid Report (SAR)

The Department of Education’s report to the student confirming the information that the student provided on the FAFSA.

Student contribution (SC)

That portion of the Expected Family Contribution to be provided by the student (and spouse, if applicable).

Student Employment

A need-based governmental program that provides employment to students. Graduate students may be eligible for Teaching Assistant positions.

Subsidized Stafford Loan

A loan subsidized (quarterly interest is paid) by the federal government as long as the student is enrolled in school at a half-time basis or more.

Student Education Loan Fund (SELF Loan)

A low-interest loan for students attending a Minnesota college. A credit-worthy co-signer is required and his/her signature must be notarized.

Supplemental Educational Opportunity Grant (SEOG)

A federal grant awarded to undergraduate students who demonstrate financial need based on the results of the Free Application for Federal Student Aid (FAFSA). Students must also be Pell Grant eligible.

Unsubsidized Stafford Loan

The Unsubsidized Stafford loan is offered to students regardless of their financial need. The terms are the same as the Subsidized Stafford loan (see above) except the borrower is responsible for the quarterly interest. A borrower can choose to pay the quarterly interest or opt to let it capitalize. A student may be eligible for additional Unsubsidized Stafford Loan funding if the Parent PLUS loan is denied by a lending institution.

Verification

A process completed by the Financial Aid Office to verify that data supplied on the FAFSA is accurate. Tax forms, W2s, and a Verification Worksheet are collected by the Financial Aid Office in this process.