ROANOKE, Va. – If you have a teen heading to college in the fall, you might have questions or concerns after they’ve received those financial aid award letters.
CEO Mary Morris with Virginia529 said the first thing families should do is pay close attention to the types of financial aid that their teen receives.
“I think one of the most important things is to understand, what I will call true financial aid, things that don’t need to be paid back and things that are loans because they all come in the same package,” said Morris.
She said work-study programs, grants and scholarships will not need to be paid back.
Morris also said you should look at what qualifications you need for the aid and how long it will be available.
“Sometimes they’re just financial awards for freshman year. If they’re not going to continue into your sophomore, junior, or senior years, then you need to think about that,” said Morris.
Every college or university that your child was admitted to provides a one-year estimate of attendance that includes tuition, room and board, textbooks, and other expenses.
“Every school publishes what they think their total cost of attendance is, and in the award letter you can see where they think the gap is and then figure out how much you’re going to have to come up with yourself,” said Morris.
She said if your teen is still narrowing down where to attend college in the fall, it’s important to compare the net cost of attendance per school.
Morris also said that 529 accounts can help you when you have a gap.
“During the school year, you can use it for books, room and board, a computer, computer peripherals, software programs any additional costs for fees that you may have for a certain program or course of study that is not covered under the tuition,” said Morris.
529 accounts are tax-advanced savings accounts for higher education expenses. Across the nation, there are more than 16.4 million 529 accounts. 3.1 million of those accounts are Virginia529 accounts.
You can use 529 accounts for community colleges and culinary arts programs. They can be used for private K-12 schools, registered apprenticeship programs, graduate school, and even repaying certain student loans.
If you’re thinking about getting an account this year, you can roll over some of the unused funds from the 529 accounts into Roth IRA accounts without incurring tax penalties.
Morris said you can speak with the schools about aid.
“You can go back to a school and ask if they can do anything more,” said Morris.
She said this can help if you’re still narrowing down where to attend or there’s a school that you really want to go to but it’s not offering a competitive offer like the other colleges or universities you were admitted to in the fall.
Morris said make sure you’ve completed the FAFSA. She said it might be too late for some schools but not necessarily all. So, you should check if you haven’t completed it yet.
“I think what a lot of people don’t realize is that you, in most schools, have to complete the FAFSA, that free application for federal student assistance, to qualify for federal aid and that is sometimes work-study and mostly that’s talking about Pell Grants,” said Morris.
She said most schools require the FAFSA to consider different types of programs that the schools offer as well.
Finally, Morris wants families to keep in mind that they don’t have to take out all the loans.
“There are federal subsidized loans, unsubsidized, all different types of loans, but you only take what you need,” said Morris.