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10 FAQs About Financial Aid

Between figuring out the FAFSA and pondering the "Have you decided on a major?" question, you've been dishing out a lot of answers lately. Surely you have financial aid queries of your own, so we rounded up the experts for answers to some of the toughest questions when it comes to financing your education.

Here, Cynthia Bailey, executive director of The CollegeBoard; Andrew Bryan, educational consultant at and college advisor; Rosalind P. Marie, certified school psychologist and educational planner; and Michael O'Brien, CEO of, provide insight to the financial aid questions that keep you awake at night. As for answers on choosing a major -- you're on your own with that one.

1. How can I maximize my eligibility?
O'Brien: To maximize your eligibility for aid, the number one thing you can do is fill out the Free Application for Federal Student Aid (FAFSA). This will help you qualify for federal financial aid and school-based assistance. Next, contact your financial aid office to see what aid is available, learn about any upcoming scholarship or grant deadlines, and ask about work-study programs. Finally, go online to inquire about scholarships. offers a free scholarship search service to help you find free money for school.

2. Why do private colleges cost more than public ones?
Bryan: Private school costs more simply because your tuition at a public school is directly subsidized by the taxpayers of your state. Even out-of-state tuition is subsidized to some degree in most states. At most you'll pay 30-40 percent of your tuition -- the rest is paid by taxes. Your neighbors are helping pay your tuition because they have a vested interest in you.

3. What's the difference between a grant and a scholarship?
O'Brien: Both grants and scholarships are considered "free money," meaning they typically do not have to be repaid. Grant aid, such as the Pell Grant, can come from federal or state government entities as well as from individual colleges. Scholarships are usually awarded based on merit or special circumstances determined by the college.

4. Will I get more money if I claim myself as independent of my parents?
Bailey and O'Brien: No. You can't just claim yourself as independent. You have to [either] be emancipated from your parents [if you're an orphan or ward of the court until the age of 18, or if your parents are deceased], a veteran, over the age of 24, married, or have a dependent yourself.

5. Why do I need to supply my parents' tax information if I'm ultimately the one paying for college?
Bryan: Ultimately, you're not the one paying for college. That has been the major shift in the last 10-15 years, and that's often what catches families off-guard. This is going to sound like harsh criticism, but once the government and higher education institutions figured out they could extend the age of independence to 24, they knew they could bridge the gap with parent loans. This allows colleges to increase tuition and lending institutions to loan more money.

6. Why do I have to submit my step-parent's tax information if they aren't contributing to my college expenses?
Bryan: That's a school-by-school decision. But with the FAFSA, officials are looking at household income, so they're examining the broad picture, and that includes your stepparent's income. It's good for parents to sit down and practice the FAFSA early on because this is one [topic] no one really thinks about.

7. Is it true you can "negotiate" a financial aid package?
O'Brien: Yes. If your school of choice offers you a financial aid package that does not meet the total cost of education, give them a call. Explain your situation, and why you need additional funding to enable you to attend the school. If you are a student who is attractive to the school -- whether it's your grades, athletic performance, or special circumstances that make you an ideal candidate -- you'll find that many financial aid offices will try to assist you with a more competitive package.

8. How do I know if I should apply for a PLUS loan?
O'Brien: The PLUS Loan (Federal Parent Loan for Undergraduate Students) is ideal for families who have already made use of grants, scholarships, and other federal loans. With it, parents can finance up to the entire cost of education less other aid. This variable rate federal program offers current interest rates as low as 4.10 percent, with interest rate reduction programs. In many cases, PLUS loans are a better alternative than home equity lines of credit, savings, or borrowing from your other investments to pay for college.

9. How do I compare financial aid awards?
Bailey: Make sure you're evaluating apples to apples and oranges to oranges. Look at your net out-of-pocket cost: the school's budget for the type of student you are [i.e. commuter or resident], then subtract the amount of money the school gives you. Also compare the kind of awards you get, like loans and grants. For the most part, evaluate financial aid based on whether that [school] is the best fit for you, not if it's the cheapest.

10. Why does college cost so much?
Marie: In my opinion, it's because consumers have driven up the price of college over the past decade by declining to attend colleges with older facilities and basic, plain rec' facilities. Students and parents are selecting colleges with multimillion dollar spa-like recreation centers, and dormitories that rival residential housing for 20-something professionals who can afford it. University presidents understood this and went on a building boom in the '90s. There is no credible reason why colleges cannot keep their inflation rates at reasonable levels.