Financial aid is a crucial part of college life and many students have a hard time understanding the implications, especially since many have never needed to before they decided to pursue higher education.
The very first thing that needs to be done is the Free Application for Federal Student Aid (FAFSA). This form requires the student’s and parent’s tax history for the designated aid year. For the 2021-2022 year specifically, 2019 taxes are being used. There is an appeal available for families who experienced a major loss of income in 2020.
After the FAFSA is complete, it takes around two weeks to process and give a student the award offer. Award offers are created very meticulously based on an estimated budget and the Expected Family Contribution (EFC). Most EFCs qualify students for loans.
There are three types of common loans: unsubsidized, subsidized and the Parent PLUS loan. The unsubsidized and subsidized loans are both taken out under the student’s name; the difference is that the federal government subsidizes the interest of one while the student is in school and the other would gain interest even during school.
The Parent PLUS loan is taken out under the parent’s name; they are required to sign into their own FAFSA (not the student’s!) to apply for it. This one will also gain interest while the student is in school. All three have deferred payments for six months after a student no longer attends any higher education.
Students with lower EFCs may also qualify for grants. The Pell Grant is the most common. It can be used up to 600% as a lifetime limit. Students who qualify for Pell usually qualify for the Colorado Grant (CG). Unfortunately, the CG is distributed on a first come, first serve basis.
A new grant was introduced this year, funded by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Maverick Momentum Grant is for $2,000 split between semesters. If a student’s EFC is under $14,615 they will qualify for it. The CARES Act has given many students funds during the pandemic that have helped drastically.
Most financial aid opportunities can be found on Colorado Mesa University’s website. There is a magnifying glass in the top right hand corner where you can type in “scholarships” or “grants” and find information pages on how to get more aid.
There is another site for outside loans called Elm Select where you can put in your school and view loans and their rates to decide what works best for you. An outside loan may affect your financial aid from the FAFSA however, so the best strategy is to look at what the smartest option is for your situation.
One thing students need to pay attention to is their GPA. If a student is below a 2.0, they will become financial aid ineligible. In many cases, federal aid will pull back completely if a student receives all Fs and leave the student owing thousands of dollars.
Another important thing to remember is to keep checking your tasks in MavZone. When accepting loans and grants, you often have to complete terms and conditions as well as a Master Promissory Note (MPN). When accepting loans for the first time, there will be financial counseling that will walk you through the entire process.
Paying attention to how loans work and how to pay them back is necessary. Borrowing money from the federal government is a big deal. If you do not adequately learn how to track your loans and debt, you will most likely end up in collections.
Creating a good credit score and responsible spending habits is the first step into the real world. It may seem daunting, but resources on campus such as IRIS are always there to help.
