Anyone who has ever applied for college financial aid knows how confusing it can be.
Many times, students—and parents—will incur debt that will haunt them years after college is in the rearview mirror.
That’s why Minnesota Sen. Al Franken reintroduced a bill, "The Understanding the True Cost of College Act," this week to create a universal financial aid award letter. And surprisingly, in the hostile Washington climate, Republicans and Democrats have signed on as co-sponsors.
“My legislation will require schools to use a universal financial aid letter so students and their families will know exactly how much college will cost and will help them compare apples to apples when deciding what school a student will attend,” Franken said in a statement.
A press release by Franken’s office states that schools do not use standard definitions or names for different types of aid. That means often parents and students cannot differentiate between grant aid, which doesn't require repayment and student loans, which must be repaid.
Franken’s timing on the issue is pitch-perfect as the student loan debate is raging in Washington.
There’s the July 1 deadline when student loan interest rates on new subsidized Stafford loans will double unless Congress acts. Last week, more than 2,000 MoveOn.org members delivered their student debt stories to members of Congress. Massachusetts Senator Elizabeth Warren has an online petition calling for students to receive the same low interest rates on their loans that Wall Street banks receive.
And it's likely to become a hot campaign issue in the 2014 mid-term elections.
But as politicians like Franken hammer out the details to make higher education more affordable, what can parents and students actually do this summer to prepare themselves for college?
“When you are sending your child off to college, think about the rule of thirds,” Dean Tsouvalas, editor-in-chief of StudentAdvisor.com and the Scholarship Advisor app, tells TakePart. “A third you will take from savings, a third from student loans and a third from scholarships. That is a good model as you start to apply for the FAFSA and go forward.”
The FAFSA is the government’s free application for federal student aid. Tsouvalas says that the application should be proofread three times; a second set of eyes should also go over it because it’s easy to get a social security number or driver’s license number wrong or leave parts blank
“That can cause a miscalculation and that application can get rejected,” Tsouvalas says.
Other recommendations include submitting the FAFSA application on the day when checking, savings and other accounts are at their lowest, always filing a tax return—even with no income—and applying for the FAFSA before receiving an acceptance letter from a college.
Tsouvalas also says that Franken is correct about financial aid letters.
“They can be very complicated and overwhelming,” he says. “When you get your package, it is important to compare each one and sometimes you have to read between the lines.”
Aside from financial aid, students should never disregard scholarships and work studies. Scholarships, Tsouvalas says, can add up to lots of money, and work studies can accelerate a student's career.
“People think when they have work study that’s not a component of financial aid,” he says. “But in today’s economy, parents and students want to know, ‘What’s the return on my investment?’ That work study is that return because it’s a great way to get professional experience outside of your comfort zone, and it’s a great professional building block.”
More importantly, students should remember to reapply for student loans annually. That means resubmitting the FAFSA application each year.
“By reapplying and giving it a shot, you have a shot of creating the best financial package,” he says.
Are you buried underneath your own student loan debt? Tell us about it in the Comments.
Related stories on TakePart:
- Financial Aid
- Al Franken
- student loans
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