Tuesday, February 16, 2010

Financial Aid - Part I

In baseball, the "dog days of summer" refers to the portion of the season that seems to go on forever - late July and August where teams play every day during a long season and the daily grind and heat of summer takes its toll on players.  In college admissions, these are the "dog days", when counselors are reading hundreds and thousands of applications day after day.  They just keep coming, and at USD our total is close to 12,000 (11,930 as of today).  My staff is making great progress and these are wonderful applicants.  We are delighted to be the choice of so many excellent students, and we are on target to start mailing our regular decisions and merit scholarship awards in early March.  I know you are all waiting - it won't be long now!

This is also a very important time in terms of your planning for the next four years.  We are fast approaching the deadline for submitting the Free Application for Federal Student Aid, otherwise known as the FAFSA.  For USD, our deadline is March 2, and it is a priority deadline if you are hoping to be considered for any type of need based financial assistance.  Financial aid is a critical component of the college choice process for many families, and there has been much written about the availability - or lack thereof - of aid and the corresponding rising cost of higher education.  These stories, in addition to the financial realities facing so many families, make this one of the most stressful and confusing parts of the whole process, and is the topic of today's blog.  Hopefully, you'll have a better understanding of the critical role aid plays in a college's ability to enroll its class.

Soon, families will receive the important decision from their college choices.  Once the "big envelope" arrives, students can expect to receive lots of follow up from colleges - emails, phone calls, mailings, invitations to college events - all intended to help move a student toward enrollment.  Perhaps the biggest tool available to colleges and universities in getting the right mix and number of students to enroll is the use of scholarships and financial aid. 

There are many types of financial assistance.  Schools like USD that have competitive Division I athletic programs offer athletic scholarships to fill the spots on our teams.  These are not based on family income, but talent and usually are administered directly by the coaches and the athletic department.  These can be full scholarships or partial awards, and may also be combined with other types of aid.

Many schools, USD included, also offer what are called merit scholarships, or academic awards.  These are  also typically not based on a family's income but instead on a student's academic performance in high school.  Grades, quality of classes taken and standardized test scores are the basis of these awards and they are usually awarded by the admissions office.  This is the case at USD.  We look at the strength of our applicants, identify a portion of our total aid budget and award merit scholarships to a number or percentage of our incoming class (more on how we identify how much later).  For us, these awards will start to be mailed during the first week of March.

For many schools, the largest type of assistance provided is through the need-based financial aid process, and that is determined by the results of the FAFSA form mentioned earlier.  Hopefully, you have or are starting to complete this form (http://www.fafsa.gov/) and will submit it by the appropriate deadline.  For the University of San Diego, our priority deadline is March 2.  There is a series of questions that ask for family income, assets, household expenses and other items, and these questions become the inputs for a federal formula that calculates an Expected Family Contribution (EFC).  This EFC, as the name implies, determines how much each family is expected to contribute to their son's or daughter's education.  If you're like most families, you will neither like, nor agree with the results, but never the less, this EFC is what is sent to the colleges that you are considering.

This contribution is then used by the colleges to determine your financial need.  It is really important to remember that your need is determined not only by the results of the FAFSA, but also by the cost of attendance at the school's you are considering.  For example, if your family contribution is $10,000, you will be expected to contribute that much each year for tuition and college expenses.  This works out to approximately $833 per month, or $192 per week (sometimes, it helps to break it down in smaller numbers).  Let's use some examples to show how much need can change based on different types of institutions.

For example, one of the schools you're considering is an in-state public school and the tuition is $9,000.  According to the results of the FAFSA, your contribution is $10,000, so you would not likely be eligible for any need based aid (I'm not including room and board costs for this example, but those need to be figured in and are generally similar at public and private schools).  Another school you are considering is a private school, like USD (otherwise you probably wouldn't be reading this!) where tuition is likely to be approximately $36,000.  Your expected contribution is still $10,000, so your need to attend USD is $26,000. 

Here's where institutional policies - and enrollment management (see previous posts) - come into play.  Institutions direct lots of money - several million dollars each year - on helping to meet financial need and on merit scholarships.  In most cases, they are used in combination, along with federal and state money, outside scholarships and other sources, to create a financial aid package.  This package may or may not close the entire need amount, but it will provide you with a detailed listing of how much aid you will qualify for and what will be your final cost to attend.  Some students, if they are a strong fit academically and otherwise for an institution (remember when I wrote about institutional priorities in a previous post?), may get a package completely covering their demonstrated need, others, maybe only a portion.  In any event, by meeting that priority deadline for completing the FAFSA, you will be ensured of getting the maximum amount of aid available.

Financial aid awards generally are sent after the decision letters are mailed.  We try and ensure that long before the May 1 commitment date, you have all your acceptances and all your financial aid awards so that you can make the best decision you can.

That's a lot of information!  In the next post, I will go into a bit more detail about financial aid and scholarships from the university's perspective - how we arrive at how much to spend, the mix of merit vs. need aid, and also some of the current news surrounding the impact the economy has had on the whole process.  Of all the information in here, I hope you all remember that MARCH 2 is the priority deadline for completing the FAFSA, so good luck.  If it's any consolation (and I know it probably isn't), I will be completing the FAFSA this weekend, as my oldest son is a senior in high school and anxiously awaiting his decisions, too.

Good luck and until next time,


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