[00:00:00] Hello, my name is Julie Shields Rutina, and I am the Senior Director of College Planning, Education and Training at MEFA. And today we’re going to talk about financial aid So the topics we’re gonna discuss right now are the types and sources of financial aid, the application process itself, how those financial decisions are made at colleges, and then about paying for college and what steps you can take right now.

First, let’s talk about the types and sources of financial aid. So what is financial aid? Basically, financial aid is any money that is going to help your students pay for college. And usually we say there are three main types; scholarships and grants, which is the best type of financial aid. That is money that is given to your student and the student does not need to [00:01:00] repay.

Uh, those terms sometimes have unique meanings, but they… the terms can also be used interchangeably, and they are both the best type of aid. Um, secondly is Federal Work-Study. That’s a program where students are able to work while they’re a student, usually on campus, and earn a paycheck for their work. And those, uh, monies usually help pay with lots of incidentals when the student is attending college.

And then thirdly, federal student loans. And yes, they are loans, but they do have some special benefits, special properties, and that’s why they are considered, uh, the third type of financial aid. And so let’s get into the details of those special benefits and properties of federal direct student loans.

The one, uh, one difference from all other loans, um, really is that the [00:02:00] student is the sole borrower, and there is no credit check done, um, for a student to be eligible for that, that loan. Um, the thought behind that is the student will attend, attend college, hopefully graduate, and be able to get a job that will allow them to be able to repay that loan.

So that’s why a federal direct student loan is a little bit special. Also, there are two parts or types of a federal direct student loan. Uh, there is a subsidized portion and an unsubsidized portion. Um, and n- that is based on a family’s financial need. So let’s say a student is eligible for some or all subsidized federal direct student loan.

That means that no interest accrues during the time that the student is in college, and, um, the federal government is paying that interest. Um, [00:03:00] and the student doesn’t have to pay until six months after graduation With an unsubsidized Federal Direct Student Loan, um, the interest is accruing while the student is in, in college.

Um, and at the end, af- six months after graduation when the student is going to re- re- begin repaying, then that interest does get added to the balance of the loan. But other than that, the loans are the same. And the interest rate changes usually each year on July 1st. Uh, this year, the interest rate is 6.52%.

And another, uh, piece that’s a little bit special about these loans is that there are options for repayment. Um, as I mentioned, no payments are due when the student is enrolled. Um, and there are options to repay. There’s a standard repayment which would mean if the student took the full amount of Federal Direct Student Loan they were eligible [00:04:00] for, you can see the limits on your screen, as a freshman 5,500, sophomore 6,500, and then 7,500 for junior and senior year.

They would graduate having about $27,000 worth of debt. Um, and under the standard repayment plan, that would mean that the… depending on if they paid in 10 years or 25 years, um, they would have a standard repayment. If they paid that over 10 years, it would be about $300. Um, however, sometimes students, uh, are not able to make that payment, and so they might choose the other plan which is a plan tied to their income, and that would allow a student to potentially pay a lower amount, um, and, and be able to manage that loan payment.

And there are also some deferment, forbearance, and forgiveness [00:05:00] opportunities available So there is a lot of financial aid that is awarded to students. Um, as you can see in the ’24-25 year $205 billion was awarded to undergraduate students in these financial aid programs. Um, where does this financial aid come from?

Well it comes from the federal government and you get a lot of information about that at studentaid.gov. Uh, some comes from the state of Massachusetts, um mass.edu/OSFA. And a lot of it also comes from the colleges and universities themselves. So colleges have institutional financial aid. Um, when you apply for financial aid which we’re gonna talk about next, um, you are applying for most federal, state and college aid all at once using the application process.

So one other type of aid out there is that dark purple [00:06:00] box, uh, that is from other agencies outside agencies, outside scholarships, private scholarships, and that’s something that the student would do a little bit separately, and you can do that in a couple of ways. You can use some of the online scholarship search tools like mefapathway.org, fastweb.com, collegeboard.org is another one, um, or you can look what I call closer to home.

So look around parents; look to your employers. Students look to any employers, organizations that you’re involved with, any town community organizations, all of that, um, because there might be some scholarship, um, opportunities available there that you could apply for And when we talk about financial aid, it’s usually awarded based on, uh, one of…

One or two, uh, criteria. [00:07:00] And one criterion is merit-based aid, and that is aid that is awarded based on recognition of y- the student’s achievements, especially academic, especially grades in high school. However, can also be awarded for other student achievements such as athletics, ar- the arts. Um, so anything that would make your student, uh, be a great candidate for admission, sort of a top candidate for admission at a certain college in a certain year might put them in line for merit-based aid.

But also let me say that th- this does not mean your student needs to be a valedictorian of the class or something. Colleges award a lot of merit-based aid to the strong students that they would like to admit. So you may, you may see that in some of your financial aid packages. Um, most of this merit aid has, uh, renewable [00:08:00] requirements, such as you need to keep a 3.0 GPA while in college or 3.2 GPA in college, so just important to take note of that And then other aid is awarded based on financial need, based on the information that you put on financial aid forms.

Okay? And that is a standard formula, um, and the type of aid that is awarded in a need-based way can be grants, loans, work study. And it- it’s worth saying that most financial aid is need-based although students do need to, uh, keep satisfactory academic progress as established by their college. All right, what is the application process?

So here’s the timeline. When a student has decided what colleges they’re going to apply to, um, you should really look at the websites and look… just as you’ll look at the deadlines for admissions, you should look at the deadlines for financial aid, and you [00:09:00] can find what applications are required and what are the deadlines all on the financial aid section of the college website.

Um, these two processes, admissions and financial aid happen at the same time. So you’re not applying for admission, waiting for a decision, and then applying for financial aid. You’re doing it all around the same time, um, usually in the fall and then winter. Um, if you are applying for admission through an early admissions program like early action or early decision, your application deadline will be earlier, and your financial aid application will be due earlier as well.

It’s important to note to stay organized with this whole process, and you can download this Application Manager if that helps you or create your own spreadsheet or other system to just keep track of all of this. So you will hear a lot about the FAFSA. That is the Free Application for Federal Student Aid, and that is the financial aid application that is required [00:10:00] by all colleges.

You must complete it every year, and it’s available on October 1st. So you’re going to apply senior year of high school, and the FAFSA is open and ready to go on October 1st. So what I would say is you might as well get this form done as, as soon as possible, and that way you’re not afraid of missing any deadlines, all of that.

So you would go to fafsa.gov, and s- and this year if you’re going to be a senior right now, um, you will select the 27/28 FAFSA, and you’ll, you’ll do that right around October 1st. Um, have the student start the form first. That just makes it a lot smoother. So the student goes in, starts the FAFSA, and then it walks them through nicely and easily through how to invite the other people who are gonna contribute to the form, mainly parents And then [00:11:00] each contributor, if it’s one parent, um, or if it’s, it’s two for certain reasons, um, then everyone does their own section, and then the last contributor can submit the FAFSA

And just to let you know, the, um… Each person who’s going to be contributing on the FAFSA needs an FSA ID. That’s really a username and password. And you’ll see when you log into the FAFSA, you’ll be walked through the process of creating an FSA ID. And just hold onto that, keep that in a safe place because that’s what you will use, um, when you go back into the form if you need to make a correction, if you need to, um, send, uh, the form to another college.

Uh later, if you’re paying off loans, that FSA ID will stick with you. And on the same token for parents, if you have an FSA ID from a- [00:12:00] uh, one of your other children, um, as long as it was more recent, not too far along ago, you will be able to keep that FSA ID and use that. Um, pe- people without a Social Security number will be able to answer knowledge-based questions pulled directly from your credit history.

All right, so what’s reported on the FAFSA? General information, um, about your citizenship status. Um, you’ll- you’ll put that in. I will say that US citizens and eligible non-citizens can receive federal financial aid. Um, but undocumented students won’t be able to complete the FAFSA, but may be eligible for Massachusetts in-state tuition and state aid.

Um, and they will apply using a form called the MASFA, and I’ll give you a link later in the presentation for that. Um, then all the colleges that you’re applying to, you will [00:13:00] receive this FAFSA data you put on this one form. For parents, the type of information that’s asked about is marital status. Um, and parents who are married, including same sex parents, both parents need to be on the form.

Um, inform- Well, I should say both parent’s information needs to be on the form. Uh, all parents who live together, married or not, all of your information is on the form. For divorced or separated parents, uh, the parent who provided more financial support in the last 12 months, um, and if there’s a spouse, those are the parents whose information is on this form.

Um, legal guardians are not a parent. There are questions about the number of people in your household. Um, it will pull from your tax return that’s going to be submitted. Uh, but you can update that if that’s different. And it will ask about the number of children who are attending college, uh, but that won’t be used in the calculation [00:14:00] And then there’s going to be a lot of financial information, um, but the nice piece is you are gonna be able to press a button and have your tax return, uh, from 2025, that’s the year tax return that will, will be pulled into the ’27-’28 FAFSA, and that will pull all your information right in so you’re not typing lots of financial information into little boxes.

It will also… Uh, and you do have to do taxed and untaxed income that appears on the tax return. Um, and it will also ask about parent and student assets. So you include the value of savings, checking, investments, um, larger businesses over 100 employees except commercial fishing businesses, other property, um, education savings accounts, uh, that are a parent asset.

Um, the things you won’t put on a FAFSA are the value of your primary [00:15:00] home, the value of your retirement accounts, life insurance, family farms, small businesses of under 100 employees or commercial fishing businesses. Um, and just to be aware that child support received is considered an asset. There isn’t really a place to put debt on the form, um, except as it stands against an asset.

You know, um, a vacation home that’s worth this but you have a mortgage on it, that gets reported. But that’s, that’s the only debt. So if you have other special circumstances, you’ll want to be in touch with the financial aid offices to share about those. So I mentioned that every college requires the FAFSA.

Um, there are many colleges that require an additional form in addition to the FAFSA, and that is the CSS Profile Form. And you can get to that form cssprofile.org. Um, it does [00:16:00] cost a fee. It’s $25 for the first school that you wanna send this form to, and $16 for each additional college that you want to receive this form.

However, there are fee waivers for a family that earns under 100,000. And also, it’s very well worth paying the fee because this is going to put you, uh, in line to potentially receive some institutional scholarship and grant money Uh, this also becomes available October 1st, so that October 1st calendar should say, you know, “Get all these financial aid forms done.”

Um, the, the other, um, difference… There are some differences between the FAFSA and the CSS Profile. One is it will collect information about your primary residence. Also, if parents are divorced or separated, um, and we mentioned with the FAFSA, that would be the parent who provided the most support would be on the [00:17:00] form with the student.

Um, but in, in this form, they will want that non-custodial parent to also complete a CSS Profile. No financial information will be shared between the two parties, and it will just match up behind the scenes. Um, we also have a webinar on the CSS Profile, and you can link to that here. And, um, we have lots of help with webinars getting into more detail on some of these topics.

Uh, some colleges have their own financial aid application. Just look for that if- on the financial aid page of the college’s website, but, um, but many d- do not. And then after you apply, um, the colleges and the state and, and the federal government will receive your information electronically, and the student will receive a FAFSA submission summary by mail.

And if the student has completed the CSS Profile, they’ll [00:18:00] receive an acknowledgement, um, by email. And just know then there’s a process of verification and back and forth. The college may be back and forth asking you questions, so it’s just important that after you submit these financial aid forms, that you check your email for information from these colleges so that you make sure you follow up on anything And this is more about that verification process.

So, um, it’s just a normal part of the process. You don’t need to be afraid if you hear that you’re selected for verification, and they just may ask you for additional information such as a tax return transcript, a verification worksheet, uh, maybe asset account statements. So just pay attention and, um, follow up on that quickly.

Um, there is a, um, a little note that it’s helpful if the family has an email address for this financial aid [00:19:00] process, this college admissions process, just to make sure that none of these requests get overlooked. Let’s say a word about the Financial Aid Office. Um, the Financial Aid Office at- offices at the specific colleges are a great resource, so…

especially for very specific questions, such as if you receive a financial aid offer, um, and you just want to make sure that the aid offer that you received for freshman year is going to be renewable for the other years. That’s a good question. Hopefully it’s very specified in the, in the communication, but if not, that’s a question you might wanna ask a Financial Aid office at a specific college.

Also another one: How will a private scholarship affect my financial aid? If you’re bringing in, uh, from the Lion’s Club a, you know, a $2000 scholarship for some of the, uh, volunteer work you did with them, you just want to ask the college, [00:20:00] um, how that will affect your financial aid offer. Most colleges, uh, try to really allow you to fill in any unmet need or to lower loan borrowing or pot- perhaps even say I won’t take a work study job before they would really start to, um, affect the financial aid grants and scholarships you’re receiving.

But it can be different from college to college, so it’s worth asking that question. Also let’s say you complete your financial aid forms in October, uh, but then something significant happens in your family that’s going to have a big financial impact. If that happens January or February or for that matter when you’re a freshmen in college or s- junior in college, that’s…

You should go to the Financial Aid office and talk with them about what’s happening to see if they can help you. Um, and the Financial Aid office will, will let you know if phone calls are best, emails, chat, [00:21:00] if there’s a specific contact you should be in touch with All right, and how are financial aid decisions made?

Well, the first thing a college has to be very, uh, aware of is what, what is the cost of attendance? How much does it cost a student to attend that college for a year? And taking all the costs into consideration, both billed and unbilled. So for billed costs, definitely tuition and fees. If the student is going to live on campus, food, housing.

Those things will be billed upfront, and they are a, a big cost for the student. But there are other costs too: books, supplies, transportation, personal expenses. So all of that together is the cost of attendance, and colleges know that a student really needs all of that money to be able to attend. And then there’s something, a number called the Student Aid Index that [00:22:00] comes out of the, uh, FAFSA that you’ll file.

So you file the FAFSA with information about your income and your assets and the student income and assets, and it goes through a formula where income weighs much more heavily than assets. Um, it takes into consideration that the family has the primary responsibility of paying for their student. Um, but it does take into consideration all of your financial strength, um, compared to the financial strength of, of the other students applying.

And that is the number that is going to be key to the amount of financial aid you’re able to receive. MEFA does have an SAI, Student Aid Index calculator on our website that you can play around with to get a sense of what your SAI might be as a family, and how much you may be expected to pay. And so then that cost of attendance minus [00:23:00] your Student Aid Index number is your student’s financial aid eligibility And let me go back even to say that, um, many colleges will…

Let me do previous

Never mind, uh, that- that many colleges will… All colleges will do their best to try to meet that financial aid eligibility of your family, but many aren’t able to meet the whole thing. There are some colleges that promise to meet the full need of all students, uh, and they will announce that very widely on their website.

That’s something they’re proud of. Um, a number of the Ivy League colleges are able to do that. Um, but many colleges can’t do that, so they do their best. So here’s an example of what a college, um, may do to create a financial aid offer. Okay? So in this example, the [00:24:00] cost of attendance is $45,000, and the family’s Student Aid Index Number is five.

So the Financial Aid Administrator would try to meet that cost of attendance, $45,000 with financial aid. So they would first say, “Okay, Student Aid Index Number 5,000 let’s give this student a grant.” That might be a need-based grant and a merit-based scholarship. They will put the freshman year student loan amount, a work study allotment, and this is a college that couldn’t quite meet the full need.

So, um, they… there is some unmet need there, and that means that this family would need to come up with $10,000 covering the SAI and the unmet need to get the student to a point at $45,000 where they would be able to afford attending for the year [00:25:00] Um, I mentioned the student aid index calculator. Um, colleges themselves also have what’s called net price calculators on their websites that are more specific to their own financial aid programs.

So these can sometimes include, uh, merit-based scholarships, so it might ask questions about finances and grade point average and SAT score, and give you an estimate of what a package could look like if your student attends that college. So these are good tools to play around with and just, um, keep…

continue to educate yourself along the way And then when it’s time for a student to receive financial aid offers, which could be even in the fall if they’re applying early decision/early action, uh, but definitely in the spring, um, this is what happens. Students will receive many different levels of funding from [00:26:00] many different colleges.

It’s just a fact. Seems kind of funny because you’re one family, one student, um, but different colleges will award varying amounts of aid, and it’s a key time to make sure that you are comparing these aid offers, um, and making sure that you understand what it’s gonna cost at these different institutions.

So back to that- that family with the $45,000 college attendance, the SAI of 5,000, financial aid eligibility of 40, here are what three separate colleges, A, B, and C were able to award as an offer to students. College A must be one of those colleges that can meet the full need, as they gave a big scholarship, a student loan, work study award totaling $40,000, genuinely meeting that student’s financial need.

College B gave a lesser scholarship, 25,000; [00:27:00] student loan 55; work study 2,000; totaling 33,000, s- thereby leaving 7,000 of unmet need that the family will need to come up with. And College C a little bit less even, leaving 15,000 unmet need. So inc- in doing this comparison, students and parents will really want to look at all of this and dec- and make some hard decisions.

Maybe the student’s favorite college is College C, uh, but the amount that the family is going to have to pay, in this case $20,000 each year for the student to go, um, might be a factor. So, uh, students might want to go back to College A to talk with them about that or they might want to go to the open house at College C, which they’ll wanna do anyway, uh, to learn more about it and see,”Wow, do they have a great program?

Can I still get everything I need [00:28:00] from this College C which gave me…” Um, I m- I’m saying it backwards… “College A which gave me a better financial aid package?”So, um, these are the types of conversations that will happen between parents and students And something else that’s just very important to, uh, pay attention to is the types of aid that are listed in these aid offers.

So for example if you look quickly at this view of College A, B and C they all look like they gave $35,000 but the truth is they did not give the same. College A game a much bigger scholarship um and Colleges B and C put something there called a parent loan which you might borrow a parent load and you might use that but that should not be compared in the initial comparison; you want to compare apples to apples to really understand the differences in these aid packages.

Um so [00:29:00] very very important And then that gets us to paying for college. So let’s say you and your student come to an agreement, and you see, okay this is the college I want to go to. And it looks like as a family you’re going to have a balance due of $20,000 per year over and above the financial aid offered.

How will you come up with that $20,000? Well most families that I know uh, do a mix of things um, using past present and future income. And especially families that have more than one student going to college. So in this case, as an example, one family might do this; they might say well s- the student has some savings from working summer jobs the last few years.

Um, so we’re gonna have the student contribute $1,000. And we as parents have some savings, uh maybe we saved in a 529 [00:30:00] plan and we wanna split that up over the four years but we’re gonna use $4,000 of that 529 plan this year. And then present income, maybe the family is going to be able to eke out some money out of their monthly budget.

Uh, so maybe they realize okay we just paid off an automobile and we don’t have a car payment anymore, so we have 500 extra month um, and we could pay that toward the college bill. And it’s important to mention that all colleges have monthly payment plans which are not loans but they are plans where you sign up and it might cost $60 and it just allows you to break up the cost of your payments instead of paying half in the fall/half in the spring you can break it up.

So maybe the parents said “We’ll pay 500 for ten months,” and that’s $5,000 toward that [00:31:00] cost. And maybe this family decided “…and we’re also going take an educational loan of $10,000.” This is very rough because obviously you can have all kinds of different interest rates and you wanna choose a loan that has the best interest rate, the best terms for you as a family, but loose…

Rough on a $10,000 loan that might about 100 pa-… A hundred dollar payment a month and maybe the family says, “We, we can do that.” But you’ll want to pay closer attention to making sure that that is the, the best loan for your family And here are a lot of conversations that will come up around the time that you’re comparing apples to apples of these financial aid offers and really thinking about how you’re going to pay the college bill.

It’s very important to know what the college is going to cost you as a family, that net price, not that sticker price. It’s important to talk about [00:32:00] who’s going to pay for college costs. Um, maybe you work with your student and you say, “This is… You know, we’re gonna do this as a family. Um, you take your federal student loans, we will, um, try to pay some out of budget.

We’ll use some savings. Um, if we need to borrow another loan, um, we’ll cover those costs while you’re in college. Maybe you can take it over when you graduate or maybe we’ll cover it, or we expect you to cover it.” All of those things I think are really important to talk about upfront so that together students and parents can make a really, uh, wise decision.

Um, students may want to consider, “What program am I going into? Do I know my major?” Is it engineering or is it school counseling? Uh, could make a difference in your plan. Maybe an engineer is seeing statistics from the school, um, they’re admitted to that show that the s- the average student graduates with a fairly high starting salary.[00:33:00]

Of course, you can’t count on that, but that’s just good data to see. Or is it, are you starting a program where you know you’re going to have to get a master’s degree immediately? Something else to take into consideration about how much debt you wanna take on. So all of those things are important. And then parents really need to think about, how many children do we have that are also going to be coming up and going into college?

So all these things are very important. Um, and you really want to think about it, not just for the fall coming up, but for the f- full four years if it’s a four-year college. Now, one other note that’s brand new this year of July 1st, 2026, is that the Federal Plus Loan, which was an option that many parents had, um, used to, uh, not have a cap on how much parents could borrow per year in total, but it does now.

It is now capped at $20,000 a year and $65,000 in total. Just something to [00:34:00] be aware of, um, as you do your research into other loan options, um, there’s the Federal PLUS Loan, there are, uh, programs like MEFA has, has private loans as do many other organizations and companies. And it’s just important as you’re doing your research looking for that, um, best option for you with interest rates and terms that you like, um, making sure you understand if there are caps on how much you can borrow.

Um, and both things you could… should take into consideration. You should, um, get a loan with the best terms for you and ones that are gonna carry you through the, the four years

Here is some information about, um, Massachusetts state aid. Um, something very important that, um, I think we’re three years in, is that community college in [00:35:00] Massachusetts is free. Um, free tuition and fees free, and maybe a book allowance for, for students. So students do need to complete the FAFSA. That is the, the process.

Complete the FAFSA, and if you’re going to community college, you can be tuition-free, f- tuition and fee-free, and have a potential book allowance. So that is just amazing. That can be two years of college h- with very little cost, uh, that will set you right up to either graduate with an associate’s degree or transfer to a four-year college.

Um, so I really encourage families and students to look at that option. Um, and then also, um, there’s, uh, a state aid program called MassGrant, MassGrant Plus, which has put more money into state aid, and that allows that students, um, who are [00:36:00] lower income, right to middle income, um, could also attend a four-year college en masse for tuition and fee-free.

So look into that as well because that is a very nice option for many students. Early in the presentation I mentioned the Tuition Equity Law, which allows some undocumented students to receive Massachusetts State Aid and in-state tuition rates, including free community college, by submitting the MASFA form.

And, um, there’s also a program called MassTransfer allowing students to, uh, transfer from a two-year to a four-year college here in Massachusetts that makes college much more ap- affordable. And a program called Tuition Break, which allows students to attend a neighboring out-of-state institution, and in some circumstances, whether it be a specific program in some places or just in [00:37:00] general, um, allowing students to pay, um, less than out-of-state tuition costs, maybe Massachusetts state rates or at least, um, a significantly discounted out-of-state cost.

So worth looking at that website as well. Finally, please know that MEFA is here for you. Uh, you can call us at any time with any of your questions, um, large, small, long, short, and you can email us at [email protected], and we’re so happy to help you through this process. Thank you so much