Alice Murphey: Financial Aid Expert

Making the Aid List

March 29, 2011

Making the Aid List

Remember how happy you were when you got your letter of acceptance to the college of your dreams?

Well, now there’s something equally exciting to look forward to: Your financial aid package, which will determine whether you can afford to go to the college you have set your heart and mind on.

In my previous column, I helped you compute your Expected Family Contribution through the Free Application for Federal Student Aid.

Your college’s financial aid office will be crunching those numbers to put together a financial aid package made up of scholarships, grants, work and loans.

Each school has its own policies for helping students; academics, then need, are considered.

For example, some Ivy League and “near-Ivy” colleges tap into their abundant endowments to help students whose families earn less than $100,000. Others refrain from making student loans when families make less than a certain amount, say around $60,000.

Less affluent colleges may not be able to offer such generous aid but still target money to student need. In most cases, awards from large federal and state government programs are the foundation of the award package.

Generally, New York schools first explore a student’s eligibility for a state Tuition Assistance Program (TAP) award, which is a maximum of $5,000 or tuition, whichever is less. At CUNY and SUNY colleges, for example, this award can cover the cost of a year’s tuition for a low-income student. Eligibility for federal Pell Grants, which gave up to $5,550 this year for full-time students, is then considered.

If you are awarded a merit scholarship, that funding is factored into your package, too. As each layer of award eligibility is considered, more and more of your need is addressed.

Usually, at this stage, colleges consider how to apply need-based grants, student job opportunities and student loans. Some make awards for self-help programs such as Federal Work-Study and student loans earlier in the process; others consider loans last.

Some colleges apply loans before their own institutional grants, making more of the college’s funds available to students who need it the most. Others believe that students who aren’t directed toward loans are better off.

Public colleges, with attendance costs around $10,500 to $13,000 for students living at home, are often more able to apply loans as a last approach since TAP and federal Pell Grants frequently cover a substantial amount of student need, and small institutional grants can fill the rest of the gap for poorer students.

Of course, at the other extreme, Ivy Leagues can afford to provide packages that are free of loans.

I recently worked with a student who was accepted at a prestigious private college whose cost was way out of his family’s reach.

I found that between scholarships, grants, loans and work, the college had offered him more than $35,000 a year, and his family was expected to cover less than $3,000, which was very doable.

This doesn’t always happen, of course, but a financial aid package may still make it possible for you to go to your first-choice college.

Alice Murphey, CUNY’s director of financial aid management, has been helping students with tuition issues for more than 30 years.