Whose Financial Aid is it Anyway?

There are few people I’ve met in my life who don’t worry about the cost of college, or perhaps more accurately, the price of college. (FYI the cost of college is what colleges have to contend with, the fact that what they have to pay to provide education for your sons and daughters is so high.) What we have to contend with is the price they charge us.

The price of college is not cheap in even its least expensive form, in our community colleges. Therefore, many of us make the effort to see how we can afford to send our students to the colleges of their choice. Enter the financial aid office. They are the people charged with determining how much financial aid your student is eligible for from federal sources, state sources and institutional funds, meaning money the college or university sets aside to help students afford college.

I’ve already mentioned a little of this in the post entitled “FAFSA 101,” so I won’t go over the methodology or the way it’s used to determine eligibility. What I want to focus on here is working with the financial aid office and the importance of teaching your student as early as possible how financial aid works, and that ultimately their financial aid is their responsibility. This may sound odd given that so many of the forms students are required to submit to the financial aid office come from the parents, such as your tax returns. But it’s true nonetheless. Because if a parent doesn’t turn in the forms, the college doesn’t hold the parent responsible; they hold the student responsible.

So this is the time to fill your student in on finances, even if they’ve never had an allowance or a job. In this case, they need to know perhaps more about your finances than you would be comfortable telling them, but you really have no choice. One way of doing this is to speak with them when they receive their financial aid package (if they’re eligible for financial aid). And if you’re not eligible and you’re choosing to get a commercial loan on your own (only do this as a last resort) they should be involved in that as well. So as you look at the loan or aid document, talk about what a grant is (you don’t pay it back) versus a loan (you do pay that back) or work study (you work to earn the money). They can follow that just fine. None of this is difficult to understand. I mean, it can get challenging, but the dollars and cents are just numbers and anybody can add and subtract, right?

Where this can get more difficult is when the financial aid office contacts your student asking for additional information. If they were to ask your student for a copy of Schedule A of your 1040, for example, I doubt your student would know what that is. And instead of the student simply asking you for it, they tend to panic first, then call you in that panic. Our job as parents is to hear the panic, acknowledge the stress the student is under (getting used to classes, roommates, etc.) and give them some pointers on what to do next. It’s a really good idea to keep copies of each and every document financial aid asks for in a special folder in your home. In our house, it’s a red folder. Every possible thing that has to do with finances such as the bill itself, housing and board costs and our daughter’s financial aid package is in that folder, so if an additional copy of something is needed, we can scan and send it to our daughter in minutes, rather than looking around trying to find it.

Another wrinkle is when you try to call the financial aid office to see what has been received or to ask questions about your student’s financial aid package. Legally, the financial aid office could tell you that nothing in the student’s aid information can be shared with you because you’re not the student. Most offices however, will recognize that since most of the financial information for your student is your information, they can talk to you about something. And some will be very forthcoming about that. But they prefer that the student be there at the same time. That makes a lot of sense. If your student goes into the financial aid office and asks to talk to a financial aid counselor while their Mom or Dad is on the phone, most won’t object to that. In fact, they will appreciate it because there are so many financial matters that parents talk about all the time that our students still haven’t mastered yet. Going to financial aid with you on the phone as backup is a win for everyone. Having your student in the room listening and participating means they are learning more and more about the process so they can take greater responsibility in year two as opposed to year one. So, when you’re filing your FAFSA for the following year, have your student take the lead on that. I think you’ll both appreciate the result of this.

This brings me to a thought about college graduation. One of the biggest fears that students have when they’re graduating is “how to adult,” which includes such things as finances, setting up an apartment, how to pay off student loans, etc. Having them take more responsibility with their financial aid is a great step in helping them make the transition from high school to college and from college to the world of work. I mean, it’s their degree, so it must be their financial aid, too.