You've probably got a ton of questions about financial aid and paying for college. We know. We've heard 'em. And we've found answers to many of the questions you and your parents are asking.

Paying for college seems overwhelming. Where do I start?

Start with your guidance counselor. He or she will have plenty of resources available to help you get started. If you're homeschooled, or if you go to a small private school with limited resources, take advantage of the services of a local public school guidance counselor.

Ask your guidance counselor about the two broad categories of financial aid—need-based and merit-based. Need-based aid is granted to students who would otherwise have trouble meeting college costs. Merit-based aid is based on a student's high school performance—academic and otherwise. Ask your counselor any questions you or your parents have about the differences between these two types of aid, and how you go about getting them.

Also, talk to someone in the financial aid office at one of the colleges you're considering. Take advantage of their wisdom. They'll be glad to help.

Familiarize yourself with financial aid terminology. Many of these terms are defined on page 12. As you talk to the experts, you'll have a better understanding of what they're talking about as they mention things like the FAFSA and Pell Grants and SEOGs. (Whew!)

There are tons of excellent books on the subject of financial aid. Here are two we'd recommend: College Money Handbook 2003 (Peterson's) and Parent's Guide to Paying for College (College Entrance Exam Board).

The federal government is a good source, too. Get a copy of The Student Guide, a free book on financial aid, by calling the Federal Student Aid Information Center at 1-800-4-FED-AID.

What's the difference between scholarships, grants and loans?

Scholarships and grants are gifts toward your college education; you don't have to pay them back. But you do have to pay back loans, usually with interest.

Scholarships are usually awarded for some special achievement or talent. Scholarships are also sometimes awarded based on a student's financial need.

Grants are usually awarded according to financial need only; earning a grant has nothing to do with your performance or skill in a certain area.

Sometimes scholarships and grants are referred to as "gift aid." Gift aid can come from many places—the federal government, state governments, the colleges and universities themselves, and tons of private sources, sometimes as close as your own church!

What's the FAFSA?

FAFSA is the Free Application for Federal Student Aid. But it's more than just an application for federal aid. It's an application for all types of aid—federal, state and college financial aid. This form gathers information about your family's income and financial situation—information the government uses to determine how much aid you're eligible for.

You'll want to pick up a FAFSA in October of your senior year. You can get a FAFSA from your guidance counselor's office, from one of the colleges you're considering, or by calling the Federal Student Aid Information Center at 1-800-4-FED-AID.

Another option is to file the FAFSA on the Web (FOTW), the electronic version of the FAFSA. You can submit your FAFSA this way by going to fafsa.ed.gov. If you apply online, a built-in help service is available. You also can get help at ed.gov/prog_info/SFA/FAFSA, or by calling 1-800-4-FED-AID. Filing electronically with FOTW is the fastest, easiest way to apply. In fact, the Department of Education is encouraging this option.

Fill out the FAFSA or FOTW as soon as possible after January 1 of your senior year. You'll have to report financial information for both you and your parents, so you'll need your current tax returns and your Social Security Numbers. If you and/or your parents haven't filled out your tax returns by late January, go

ahead and fill out the FAFSA anyway, estimating your answers. You'll be able to correct them later.

About four weeks after you file the FAFSA, or two weeks after filing FOTW, you'll receive a Student Aid Report (SAR) from the government. The SAR will repeat the information you provided on the FAFSA. Check the SAR carefully; this is your chance to correct mistakes by sending in a response form.

If the information you provided on the FAFSA was correct (that is, no estimates), your SAR will include your Expected Family Contribution (EFC). The EFC, determined by a formula established by law, is exactly what it implies: a dollar amount the federal government says you and your family will be expected to pay for your freshman year. Colleges use this information to determine the amount and make-up of your entire financial aid package.

What's the Financial Aid PROFILE?

Many private colleges and universities use the profile to award their own private funds—money you can't get by filling out the FAFSA. You must fill out the PROFILE in addition to the FAFSA. Ask the colleges you're considering if they take part in the PROFILE program, or if they have their own institutional forms to use instead of the PROFILE.

To register for the PROFILE, or to get more information about the service, call toll-free 1-800-778-6888. You can also get more information or fill out the form on profileonline.collegeboard.com.

What's a "financial aid package"?

It's the combination of grants, loans, scholarships, work-study and possible discounts a college offers you. This package is detailed in a letter from the college, telling you what types of aid you're eligible to receive. The aid comes from a variety of sources—federal, state, college and/or private.

When you get your aid package, usually in the spring of your senior year, study it carefully. How much of it is "gift aid"? (Gift aid is money you won't have to earn or pay back.) How much of it is "self-help aid," in the form of loans or work-study? If there's a loan involved, what's the interest rate, when will you have to start paying it off, and how many years will it take to pay it off? If there's work-study involved, how many hours a week will you have to work? The package should include an explanation of all these details; if not, be sure to call the financial aid office and ask for more information.

How can I estimate the amount I'll have to pay?

Once you get your financial aid package, you'd think it'd be easy to figure out how much is left. Just add up the cost of tuition, room and board, and any mandatory fees. Then subtract the total of the aid package, and you'll have to pay the difference, right?

Well, mostly right. You'll need to figure in other expenses too—like the cost of books, personal expenses and travel. How much should you estimate for these things? For a four-year private college, estimates range from around $700 to $800 per year. (Based on estimates listed in 2002 edition of The College Board's College Cost & Financial Aid Handbook.)

Travel costs will vary significantly from student to student. If you live on the West Coast and go to school in the East, you're probably looking at two or three round-trip plane tickets per year. If your college is just a hundred miles from home, your travel expenses will obviously be much less. If you're taking a car to school, you'll have to figure out those expenses as well.

Check out the interactive calculators at petersons.com/finaid/fa-resources.asp for help in planning your budget.

Tell me about work-study.

In the Federal Work-Study program, students work hourly at on-campus jobs, getting paid at least the federal minimum wage—and no more than the amount noted in the financial aid package. You won't get the money you're awarded "up front." You must work for it, and you'll get a piece of it every pay period.

Don't be intimidated by the prospect of working a part-time job and making the adjustment to college life. Studies have shown that college students with part-time jobs earn better grades than those who don't work.

The thought of going into debt for college seems scary. Should I borrow?

You need to think about college as a long-term financial benefit. Remember, a college grad makes an average of $500,000 more in the course of a lifetime than someone who doesn't have a degree.

On the other hand, a college degree is no guarantee you'll make a lot of money. If you enter a low-paying profession, like the ministry or missions, you might make less money than someone in another career who only has a high school diploma.

But a college degree is about more than just earning potential. It's about making you a more well-rounded person, and that's a worthwhile investment in itself.

One college's financial aid official gives this advice: "Apply for all the free money you can, earn money while in school, and conservatively borrow the rest."

Deciding whether or not to take out a student loan isn't easy. Talk to your pastor, youth pastor or trusted family friend who's been through this. Ask that person to pray with you and for you. And look to God for guidance.

How can I find out what kind of scholarships are available to me?

Start with your guidance counselor. He or she will have a ton of resources—like books, CD-ROMs and recommended Internet sites.

When you fill out the FAFSA and any other financial aid applications, you're already in the running for many scholarships—from federal and state governments, from the colleges themselves, and from some private sources. You'll find out if you were awarded any of them when you receive your financial aid package.

And there are thousands upon thousands of private scholarships available, often in your own backyard. Your own church, or at least the denomination to which your church belongs, might even offer scholarships. Local businesses, civic clubs, banks and other organizations often offer scholarships. Your parents' employers might also offer scholarships.

You've just got to start asking around, digging through books, surfing the Internet. And you'll certainly want to check out the article, "Free Money!" on page 46, which offers tons of creative ideas for your scholarship search.

Many students wonder if they should use a scholarship search service. With the amount of information available through your guidance counselor, your local library, your local bookstore and the Internet, you can do a ton of searching on your own. Scholarship search services are often accurate and legitimate, but they also often work with the same databases and resources that are available—for free—in your guidance counselor's office.

Hopefully, this article answers many of your questions about paying for college. As you take these steps and follow this advice, don't forget to continually consult the ultimate source for all of your needs—God. Prayerfully turn to him every step of the way.

This article was excerpted and updated from a chapter that appeared in The Campus Life Guide to Christian Colleges and Universities (Broadman & Holman Publishers).

Thanks to Donna Peltz, director of financial aid at Wheaton College, for helping with this article.

Copyright © 2002 by the author or Christianity Today International/Campus Life magazine.
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