Financial Aid Nightmares!

Careers and Colleges, Sept-Oct, 1999 by Nancy Fitzgerald

Nancy Fitzgerald is a contributing editor at CAREERS & COLLEGES.

Don't overlook the details, take things for granted, or fall victim to phony scholarship predators. Because if you do, you could get ...

Ever since she could remember, Maria [*] had had her heart set on being a journalist. When she won a journalism scholarship, she was thrilled. At almost 20,000 a year, the money would let her attend an elite private university in New England.

But after three and a half years of college, she realized that she didn't want to be a journalist after all. She preferred to go into psychology. Unfortunately, the nationwide newspaper chain that had sponsored her scholarship wasn't quite as broadminded. To Maria's horror, they demanded she return the $60,000-plus it had already invested in her education.

As Maria learned, "free" money for college can come with strings attached, and the road to financial aid success can be lined with potholes. "The bottom line is that students need to know the requirements and rake them seriously, or they could find themselves facing a cutoff," says Kelly Tanabe, author of Get Into Any College: Secrets of Harvard Students (101 Publishing, 1997).

Some two-thirds of all full-rime college students receive financial aid, according to the National Center for Education Statistics. It's no surprise, considering college costs much more than most families can afford. A 1997-1998 survey by the College Board showed that the average cost of attendance is $19,950 at private colleges, and about $7,461 at public universities. To help out, Uncle Sam alone provides some $40 billion a year in financial assistance. But if you don't follow the rules, you could find yourself stuck in a financial nightmare. Here are some real-life horror stories. Don't let them happen to you!

THE NIGHT OF THE LIVING DEADLINE

Louisa was about to begin her sophomore year at a private university in Texas when she got her financial aid award letter. To her shock, the amount she would receive was about $10,000 less than she'd been awarded as a freshman. Why? Her father didn't have the necessary financial information ready until March instead of January. By the time the paperwork reached the financial aid office, the university's supply of grant money had dried up.

"It was awful," says Louisa. "I still received my government loans, but the grants were the only reason I was able to come to this school in the first place." Louisa considered transferring to a less expensive school, but her parents were able to scrape together the money she needed through bank loans. The following year, Louisa's family mailed off all their forms by the second week of January. "I'm in a lot of debt, and I almost missed out on finishing my education because of that slip-up," Louisa says.

AVOIDING THE NIGHTMARE

Be an early bird. Send in your Free Application for Federal Student Aid (FAPSA) as soon after January 1 as possible. Make sure all the other forms your college requires are in well before the school's deadline. Institutions have grant money to help students, but there's only so much to go around, and if you wait, the money could be gone.

Estimate your tax return. "If your parents haven't received all their tax documents yet, they can estimate them for the FAFSA, using the last paycheck stubs of the year," says Joe Russo, director of financial aid at the University of Notre Dame in South Bend, Indiana. "Later on, when their tax returns are finalized, they'll have to inform the financial aid offices of any changes, but for most families, any changes are minor. The important thing is to get the ball rolling."

HAUNTED BY A PHANTOM SCRIBE

Ashley made it into a top university, but her financial aid package didn't cover her expenses, so she applied for a scholarship from a private foundation. She was told at first she had an excellent chance of taking home the $5,000 yearly award, but when the group sent out its final notices, Ashley learned she had been disqualified because her application was incomplete. "One of my former employers forgot to turn in my recommendation," Ashley says. "Because of that, I lost out on money I really needed."

AVOIDING THE NIGHTMARE

Keep track of the paperwork. To receive financial aid, you'll have to process a lot of documents. Devise a system to keep track of them. For many students, a checklist works best. Make one for each school to which you're applying. On it, note all of the documents that are required, along with the deadline for each. Before the deadline arrives, call the school or the scholarship administrator to double-check that each item has been received. "The important thing to realize is that it's your responsibility," says Kal Chany, author of Paying for College Without Going Broke (Random House, 1999). "Don't assume that the college [or private foundation] will feel sorry for you and help you out.

THE GHOST OF LOST LOANS

Help those who are helping you. If you're asking teachers or employers for a scholarship recommendation, make it easy on them. Provide clear copies of the forms and instructions they'll need, as well as a stamped and addressed envelope. Well before the deadline, call and ask politely if they've had a chance to send in their letters.