Rhode Island Monthly Higher Learning 2016 : Page 11

F inancial aid for college-bound students is a maze of acronyms and terms that could make a Wall Street analyst’s head spin: need-based aid, merit aid, FAFSA, CSS Profile, net price calculator, sticker price, grants, loans and scholarships. Not to mention repayment schedules, interest rates and an array of loan originators, some of whom (Sallie Mae) sound like your elderly aunt. In the midst of this confusion, many families incorrectly assume that their state universities are the only financially viable route for higher education, but students with reason-ably good grades can receive generous financial aid at private colleges. For many students, this aid can reduce the cost of a private college to below what you would pay as an in-state student at your local university. Merit vs. Need-Based aid There are two basic types of aid that you should be cognizant of as you plan for college: need-based aid and merit aid. Need-based aid is calculated according to your household income and assets, with two different formulas used by colleges to determine eligibili-ty: the FAFSA (Free Application for Federal Student Aid) form and the CSS (College Scholarship Service) Profile. Merit aid is based on grades, SAT/ACT scores, leadership or special talents like music. Income and assets are irrele-vant. However, not all colleges offer merit aid. Ivy League schools do not have merit aid, and many highly competitive colleges — like George-town, Duke, Bowdoin and Wil-liams — offer little or no merit aid. Students will usually receive more merit aid from their reasonable and backup colleges rather than their stretch schools because colleges often seek higher GPAs and SATs to raise their average entering freshmen stats. While merit aid can be difficult to estimate, some schools publish their average merit award. Several publica-tions, like U.S. News and World Report, have lists of the top schools for merit aid. If your family earnings or assets make you ineligible for need-based aid, but you can’t afford to pay full fare, choosing colleges where you are likely to qualify for merit aid is critical. >> Enjoy the digital edition of Rhode Island Monthly. Take us with you wherever you go — the delight of Rhode Island Monthly at your ingertips. Available for Mac, PC, tablet or smart phone. TO LEARN MORE, VISIT RIMONTHLY.COM. 9 2.9 S $1 ISSUE H FOR 12 C 99 EA OR $1. RHODE ISL AND MONTHLY I higher le arning I 2016 11

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