Introduction When talking with potential college students they always talk about the high price of college and the rising costs of tuition. This section will help E-Guides field general questions about financial aid, the Free Application for Federal Student Aid (FAFSA), scholarships and other related issues. The Ohio College Access Network compiled the information in this section through its partnership with Student Loan Funding (SLF) a subsidiary of Sallie Mae, one of the largest student loan providers in the nation. This section provides many links to web resources including the Federal government and Sallie Mae’s college planning website, www.collegeanswer.com.
Key Point It is important to consider a college education as an investment. According to U.S. Census Bureau statistics, people with a bachelor's degree earn over 80 percent more on average than those with only a high school diploma. Over a lifetime, the gap in earning potential between a high school diploma and a B.A. (or higher) is more than $1,000,000. What this boils down to is that sacrifices made for college in the short term are more than repaid in the long term.
Price vs. Cost Potential students need to look beyond a college's "sticker price" and find out what the average American student actually pays, to get a truer sense of what college actually costs. Although some price tags can be quite daunting (for example, colleges that charge more than $25,000 for yearly tuition and fees), the fact is that most college price tags are a lot less expensive than you might think. Financial aid, in the form of grants, loans, or jobs, further reduces the amount students have to pay.

Ways to Finance Your College Education Many people think they cannot afford the school of their choice because it is too expensive. It is important for potential students to spend time researching different sources of financial aid available to pay the tuition bill.
Types of financial aid There are four types of financial aid we will highlight:

1. Scholarships come from private donors or from the college. Some are based on financial need, but many are based on academics, leadership, athletics, etc.
2. Grants are based on financial need and don't need to be repaid. The largest grant program is the Federal Pell Grant. Other federal, state and college grant programs are also available for qualifying students. To be eligible for these grants, potential students must fill out a FAFSA (Free Application for Federal Student Aid).
3. Student loans are a type of financial aid that must be repaid.
4. Military Funding: The armed forces offer a variety of student assistance programs to their members.

Scholarships Scholarships don't have to be repaid, so they are sometimes known as gift aid. There are many sources for scholarships, including private companies and organizations, colleges, state-based programs, and others. Below are some useful Scholarship Search Sites.

1. http://www.students.gov
2. http://www.studentaid.gov
3. http://www.finaid.org
4. http://www.fastweb.com
5. http://www.collegeanswer.com
6. http://www.scholarships.com
7. http://www.collegescholarships.com

Grants Grants are considered gift aid and don’t need to be repaid. There are state grant programs, federal grant programs, and some college-based grant programs, most of which are based on financial need. The college financial aid office can help explain what types of grants are available. Below are links to the well-known federal and state grant programs. Federal Pell Grants(http://www.studentaid.ed.gov/students/publications/student_guide/2003_2004/english/types.htm) - generally, Pell Grants are awarded only to undergraduate students who have not earned a bachelor’s or professional degree. Federal Supplement Educational Opportunity Grant (FSEOG)(http://www.studentaid.ed.gov/students/publications/student_guide/2003_2004/english/types-campus-fseog.htm) - for undergraduates with exceptional financial need—that is, students with the lowest EFCs— and gives priority to students who receive Federal Pell Grants. Ohio Instructional Grant(http://www.regents.state.oh.us/sgs/oig.htm) -- provides need-based tuition assistance to full-time undergraduate students from low and moderate income families. Part-Time Student Instructional Grant(http://www.regents.state.oh.us/sgs/parttimegrant.htm) -- provides financial assistance to Ohio residents enrolled for part-time undergraduate study at eligible Ohio universities. Ohio Student Choice Grant Program(http://www.regents.state.oh.us/sgs/choicegrant.htm) -- provides financial assistance to full-time students enrolled for baccalaureate study in Ohio private non-profit colleges and universities. For students to be eligible for most types of state, federal aid and college-specific financial aid, the Free Application for Federal Student Aid (FAFSA) form must be completed. The FAFSA can be picked up at the college or can be filled out on-line at http://www.fafsa.ed.gov. To complete the FAFSA individuals need to request Personal Identification Numbers (PIN) at www.pin.ed.gov. The PIN acts as an electronic signature for the FAFSA. The PIN will be sent within 7-10 days. The following items need to be gathered to complete the FAFSA:

1. Most recent W-2(s) and tax return (when completed)
2. Current bank statements
3. Driver's license and Social Security number
4. Records of untaxed income
5. Value of business
6. Value of investments (exclude retirement plans and home equity)

The FAFSA can be completed and submitted to the Federal Processor anytime between January 1st and June 30th, but it is encouraged to submit by March 1 to get the best financial aid package. Individuals who submit the FAFSA should expect the Student Aid Report (SAR) 3-6 weeks after submitting the FAFSA. This acknowledges that the form was processed, and can be used to make corrections to the FAFSA. Individuals can use the PIN to make on-line changes to the FAFSA, and as an electronic signature for future FAFSAs. Student Aid Reports are used by colleges to create student financial aid award letters.
Colleges determine the amount of financial aid awarded to students by using this formula:
Cost of Education – Expected Family Contribution = Financial Need The FAFSA will calculate the Expected Family Contribution, and the college will subtract this amount from the cost of attending their school (Cost of Education). This determines how much financial aid they can offer a student. They will come as close as possible to meeting the student’s Financial Need. Once the financial need is determined a college will develop a student financial aid award letter. For additional information on the financial aid award letters, visit this link.
Student Loans Federal loans are the largest source of education loans. Loans available under federal programs have very attractive terms when compared to most other borrowing options. Private loans are designed to supplement federal loan programs and are available from schools, banks, and education loan organizations. Private loans are also known as alternative loans and the terms often vary considerably based on the lender and borrower credit histories.

Federal Perkins Loan The Federal Perkins Loan is awarded to students with exceptional financial need. Perkins loans are long-term, low-interest loans borrowed directly through the financial aid office. Funds for the Loan Limits are strictly limited, with an undergraduate total limit of $20,000. For more information visit the above link.

Federal Stafford Loans Stafford loans fall into two categories--subsidized or unsubsidized-- which differ in the method of interest payment. The borrower is responsible for repaying all interest on unsubsidized Stafford Loans, including interest accrued during time in school. The average total limit for undergraduate students is $23,000 for dependent students and $46,000 for independent students.
Private Loans Tuition increases during the last 20 years are forcing families to rely more heavily on alternative financing to bridge the gap between available funds and school costs. Private loans are one of these alternatives. If a student doesn't qualify for a federal loan or if the amount awarded won't cover expenses, a private loan might work for the student. Many lenders offer private student loan products and the terms often vary. Because the federal government does not guarantee these loans, lenders assume a greater risk. Accordingly, the interest rates and fees charged for private loans are generally higher than those for federal loan products.

Also, the rates and fees on these products are often directly tied to a borrower's credit history. A borrower with a good credit history will probably receive rates and fees considerably lower than a borrower with a poor credit history. Generally a private loan is more expensive, so a decision to borrow using a private loan product should not be made lightly. Students need to analyze how much debt to assume and the ability to repay all of the loans upon graduation.
Military Funding
The armed forces offer a variety of student assistance programs to their members. There are four primary federally sponsored education benefit programs, click on the below links to learn more.
Montgomery GI Bill - Active Duty (MGIB) The MGIB program provides up to 36 months of education benefits. This benefit may be used for degree and certificate programs, flight training, apprenticeship/on-the-job training and correspondence courses. Generally, benefits are payable for 10 years following release from active duty. Montgomery GI Bill - Selected Reserve (MGIB-SR) The MGIB-SR program may be available to members of the Selected Reserve. This benefit may be used for degree and certificate programs, flight training, apprenticeship/on-the-job training and correspondence courses. Veterans Educational Assistance Program (VEAP) VEAP is available for individuals who first entered active duty between January 1, 1977 and June 30, 1985 and elected to make contributions from military pay to participate in this education benefit program. The contributions are matched on a $2 for $1 basis by the Government. This benefit may be used for degree and certificate programs, flight training, apprenticeship/on-the-job training and correspondence courses. Survivors' and Dependents' Educational Assistance Program (DEA) DEA provides education and training opportunities to eligible dependents of veterans who are permanently and totally disabled due to a service-related condition, or who died while on active duty or as a result of a service related condition. The program offers up to 45 months of education benefits. These benefits may be used for degree and certificate programs, apprenticeship, and on-the-job training. Spouses may take a correspondence course.

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