family discussing college finances

Money 101 - College Financial Aid Basics

A guide to some basic information you’ll need to know to help prepare for higher education costs.

There’s no doubt that the cost of higher education can be overwhelming for students and their parents. Many colleges and universities charge more than $10,000 per year to attend. And even if they aren’t in that range, the thought of spending that kind of money can scare off many families.

But the federal government has a form you can fill out for free to see if your student may be eligible for federal, state, and college/university student aid. It’s one form that provides access to potential funding from various sources. It’s the Free Application for Federal Student Aid (FAFSA). The form is due in the fall, but February is College Financial Aid Awareness Month, set aside to help educate students and parents about financial aid offerings.

According to the U.S. Department of Education’s National Center for Education Statistics, 84% of full-time, first-time undergraduate students received financial aid in the 2018-19 school year. The aid comes in the form of grants, loans, tax credits, and work-study programs. So, how do you begin this process? Fill out the FAFSA form and submit it to begin the quest for higher education. Don’t assume you can’t afford a college education. The FAFSA opens the door to various financial aid opportunities.

There are some basic pieces of information that you’ll need to know to fill out the FAFSA. The form requires tax information for the two years prior for the student and parents. Filling out the form online is easy. You’ll also need to create an account on the Federal Student Aid website. If you use the online FAFSA form, you can retrieve your IRS data to automatically populate the form. Additionally, you’ll need ID information and bank statements.

Remember to check with the college or university to see what they offer, especially if it is a private school. They may have financial aid offerings that are outside the typical FAFSA offerings. Some private colleges and universities use the FAFSA results to determine aid, while some may require more information.

When it comes time to figure out what a year of college might cost, remember that often the college or university will list items such as tuition and fees along with room and board. But there are other expenses you’ll need to consider. There are textbooks and supplies, transportation, and other day-to-day expenses that a family might not think about. Things like clothing, laundry, and emergencies are often overlooked. Depending on the major chosen, your student may need to purchase specific supplies that aren’t included in the universities expenses.

Remember, you can learn more about savings accounts and preparing for college from a Peoples personal banker. Stop by a bank location or call 888.929.9902 to speak to one today.