Pay for College: Best Practices for Stacking Financial Aid

When it comes to paying for college, the process can seem overwhelming at times and getting started can feel like the hardest part. To help you prepare for the unknown, we’ve put together a guide for stacking financial aid options depending on your unique situation.

First of all, it’s never too early — or too late — to consider financial aid. Whether you’ve been in school for a semester or you’re researching options early, here are three key steps you can take to begin building a plan to offset expected college costs:

1. First, complete a Free Application for Federal Student Aid (FAFSA). You may complete your application as early as October 1 each year for the following academic year. Each college has a deadline for completion in order to process financial aid. If you’re unsure about the process or intimidated about the form, visit studentaid.gov for guided help. After applying, you’ll receive your personalized Student Aid Report that includes your EFC, or Estimated Family Contribution. This number determines your eligibility for federal financial student aid, which we’ll discuss more below. Completing a FAFSA is required before each year you plan to attend school. If you are not yet an eligible senior in high school or just want to get an idea of what your EFC will be, check out the FAFSA Forecaster.
2. Next, prioritize financial aid that you won’t have to pay back. Research scholarship, grant and work-study opportunities first. These can exist locally, regionally, or even nationally, depending on your planned field of study or current circumstances. Consider asking your school counselor/career advisor or college financial aid office about known opportunities and be sure to pay close attention to deadlines.
3. Finally, research student loans and consider federal options first. After completing your FAFSA, you may be eligible to receive a federal loan. Differing from private loans, federal loans offer many benefits like lower fixed rates and flexible repayment programs. Visit studentaid.gov to learn more.

As mentioned above, your Estimated Family Contribution (EFC) plays a central role in determining your financial aid eligibility. This number is what the federal government thinks you can contribute to your college costs after taking into account your family’s finances. For more information about how EFC calculations are made, read this helpful article.

Depending on your EFC, here are three tailored approaches to stacking financial aid:

• Low EFC (generally below $3,000)
• Average EFC (generally between $3,000 and $6,000)
• High EFC (generally greater than $6,000)
  
  *Ranges are approximate and can change based on personal circumstances, for example, the number of dependents in your household can affect your EFC.

Students with Low Estimated Family Contributions

If your expected family contribution is low, you’re more likely to qualify for a larger financial aid package. After completing your FAFSA, these options will most likely be provided to you:

Federal Grants

Federal Pell Grants are awarded to undergraduate students with financial need and do not have to be repaid if all expectations are met. Pell Grant amounts can differ year-to-year depending on your cost of attendance, student status (full-time or part-time) and EFC. The maximum award is $6,345 for the 2020-21 school year. A Federal Supplemental Educational Opportunity Grant (FSEOG) is another option for undergraduate students that exhibit exceptional financial need. Not all schools participate, so it’s important to check with your financial aid office to see if this grant program is offered.

State Financial Aid

Collectively known as Opportunity Pathways, Washington’s student financial aid program provides a variety of grants and scholarships for resident college-bound students. A combination of merit-based, need-based and targeted workforce opportunities, these grants and scholarships are designed to make a college education accessible for more students. Included in the Opportunity Pathways is the new, nationally recognized Washington College Grant (formerly State Need Grant).

The new College Grant has expanded to give more money to more students for more kinds of education after high school. Maximum award amounts will cover full tuition at any approved/eligible in-state public college or university, including community or technical colleges. Learn more here.

Other state opportunities include:

• The Washington State Board for Community & Technical Colleges Opportunity Grant is designed to help low-income students get the training required for well paying, high demand, careers. To be eligible students must be residents of Washington State, and must have a family income at, or below, 200% of the federal poverty level. The grant provides funding for up to 45 credit hours at a community college or technical school, plus $1000 for books and other fees.
• The Washington State Opportunity Scholarship provides financial support for students who can demonstrate the required level of financial need. The $1000 scholarship targets low to middle-income students who are pursuing bachelor’s degrees in high need fields including science, technology, engineering, mathematics and healthcare.
• The American Indian Endowed Scholarship is available to Native American students who are pursuing undergraduate or graduate studies at an accredited state college or university. Awards are based on financial need and range from $500 to $2000.

Early-start Scholarships

If you’re getting a head start on planning, 8th grade students are eligible for the College Bound Scholarship. The application is a two-step process that begins in the 8th grade and picks up again in their senior year.

Federal Work-Study Programs

Keep reading, because the following sources are also available to you and your family.

Students with Average Estimated Family Contributions

Federal Work-Study Programs

As you complete your FAFSA, you’ll see the option to select “Work-Study.” While this option is provided to everyone, opportunities are given to undergraduate, graduate and professional students that demonstrate financial need. Work-Study allows students to earn money to pay for school through part-time on- or off-campus jobs. These positions are considered part of the financial aid package, so remember that adjustments could be made to other grants and scholarships depending on your circumstances. You can always add or delete the Work-Study option if there’s still a need in your budget once awards have been made. Here are 8 tips as you consider a work-study program.

Scholarships or Grants from your Educational Institution

Sallie Mae found that 61% of scholarship recipients in 2018 used scholarships from their college. (Check out this report for more information.) Many institutions allow you to apply for scholarships at the same time you apply for admission. This is helpful because you’ll know actual tuition costs as you compare the pros and cons of each school. These scholarships require you to be proactive; you’ll need to advocate for yourself as a future student.

Outside Scholarships

Depending on where you live, the high school you attend(ed), the college you plan to attend or the field of study you’re planning to enter, nonprofits and community programs usually offer a variety of grants and scholarships. For instance, the Community Foundation offers more than 60 scholarships for students depending on their circumstances. Remember to research community boards such as theWashBoard.org or Fastweb.com, and ask your school counselor, career advisor or financial aid office for assistance.

With external scholarships, you’ll need to pay close attention to your chosen school’s displacement policy. That is, how they allow you to layer financial aid. Some colleges reduce financial aid packages when a student earns private scholarships. While the intention is to free up more resources for more students, sometimes it has detrimental effects. Read more about scholarship displacement in this helpful article by ScholarshipAmerica.org.

Students with High Estimated Family Contributions

If you’ve received a high EFC, a federal work-study probably won’t be available to you. However, there are plenty of scholarships and grants that can still be counted as an option for paying for college. These opportunities will likely be provided by technical/vocational schools, colleges and universities. You can also find community programs like the Community Foundation’s scholarship program, other nonprofits or extracurricular programs at your local school. If you still have needs or a gap in finances, students can consider borrowing money from the federal government or private banks.

Federal Loans

To qualify for Federal Loans, you’ll need to complete a FAFSA each year you’re enrolled in school. Before you take out a loan of any type, it’s important to remember that a loan is a legal obligation that leaves you responsible for paying back the full amount borrowed plus interest. It’s important to be smart about how much you borrow so that you’re prepared to begin repayment after college. Studentaid.gov provides some helpful information as you consider taking this step.

Private Loans

Similar to online shopping, Student Loan Hero by Lending Tree offers some great tips about shopping around for the best deals on a private student loan. After qualifying for a rate from a lender, you can begin comparing your options. Student loan calculators also come in handy to help you estimate long-term costs before signing any paperwork.

In closing, the most important thing to remember as you search for financial aid is everyone’s situation is unique. After completing your FAFSA and receiving your Student Aid Report, you can begin researching opportunities and making a plan of action. Learn more about scholarship opportunities in Clark, Cowlitz or Skamania Counties by visiting cfsww.org/scholarships.