It’s great fun going to a suspense flick and gripping your arm rests during the plot’s twists and turns. You want that kind of high anxiety when you watch a movie mystery. But most parents would prefer less drama when they watch the financial aid process unfold. In fact, savvy parents can save themselves much of the apprehension, worry and angst of the financial aid process by learning the truths behind the commonly-held assumptions:
“My child will get some type of merit scholarship.”
Spoiler: According to a survey by the Wall Street Journal, 92 percent of financial aid counselors say parents overestimate the availability of scholarship money. Only 1 percent of college students receive merit scholarships based on their SAT scores.
“My child will borrow the amount needed through low interest government loans.”
Spoiler: The federal government actually caps the amount undergraduates can borrow over four years to $27,000. The current interest rate for an unsubsidized Stafford Loan is 5.045%.
“Financial aid is only loan money.”
Spoiler: Between 60 to 70 percent of all financial aid packages may be free money in scholarships that don’t have to be repaid.
“We will get no financial aid.”
Spoiler: About 35 percent of parents incorrectly assume they will not get financial aid; 70% of those parents assumed incorrectly.
“With two children in college, we will have to pay twice the amount.”
Spoiler: The federal Financial Aid formula calculates the expected family contribution for the year, whether one child is enrolled in college or triplets are. That contribution is per year, not per child.
So, when it comes to financial aid, if you want less dramatic plot twists (and ultimately more money in your pocket), go behind the scenes and get the information you need. That way, there won’t be any plot surprises or spoiler