College Financial Aid, from Life in the USA: The Complete Guide for Immigrants and Americans

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Life in the USA
Education in America
Applying to College

Financial Aid
This material courtesy of Jeannine Pitas

Why are American universities so expensive?

It’s a common question asked by many, including us Americans ourselves. But for some newcomers to the US, especially those whose native countries have strong public universities and offer a free tertiary education to all its citizens, the $35,000-per-year price tags of some of our top universities can be downright mind-boggling, as can the now very commonplace practice of parents beginning to save for their children’s education from the moment of their birth. While there are some exceptions, the fact remains that college education in America, even at public institutions, is very costly, and yes, many parents do begin saving for this expense even before their children’s birth. However, the obvious conclusion that could be drawn from this scenario—that education is only for the wealthy and privileged—could not be further from the truth. College is open to everyone; it is just necessary to understand how the very complicated and potentially misleading financial aid system works.

What many people do not realize is that in any college classroom, whether that classroom be at an Ivy League university or a small community college, all of the students are paying different prices for their tuition. In an institution that charges $35,000 per student per year, some students (or their families) are paying $35,000 per year; others are paying close to nothing; still others are paying any range of amounts in between.

Welcome to the American system of financial aid. In theory, its intention is to promote equality of opportunity and give everyone a chance at an education. In other words, if you are a good enough student to be accepted by Harvard, you should be able to attend Harvard, regardless of your financial situation. In practice the system does not work so fairly, but it does open the possibility of an education to many who would not have it otherwise.

Financial aid can come from many sources, but the largest are the US government (in the form of Pell grants and Frances Perkins loans), the universities themselves (which may charge a great deal but also may return it to students in the form of scholarships and grants), private foundations and loan companies. Financial aid always comes in three forms: grants and scholarships (which do not have to be paid back), loans (which do have to be paid back upon graduation) and work study programs (financial compensation for jobs held on campus).

When a student applies to college, along with the college applications he also must fill out financial aid forms. Generally two forms are expected: the FAFSA (Free Application for Federal Student Aid), provided by the US government and available every year after January 1, and the College Scholarship Service (CSS) Profile, a much more detailed form distributed by the College Board earlier in the academic year. These forms require the documentation of the student’s financial resources and generally focus on four factors: the student’s income, the student’s assets, the parents’ income and the parents’ assets. Other factors, such as the number of children in the household and the number currently in college, are also considered.

Based on these forms, an Expected Family Contribution—an amount which the family is expected to pay for the child’s education—is calculated. If the Expected Contribution is low enough, the student may be eligible for federal grants and loans. If not, the student very likely may still be eligible for financial aid from the university itself. Each university has a financial aid office which, reviewing the potential student’s documents, offers a financial aid package which is sent out at the same time as the acceptance letter.

The financial aid system is not without its flaws. Some critics argue that it is not kind to the middle class, for while the affluent can afford to pay the high tuition fees and the poor are offered plenty of aid, the people in the middle are offered some aid, but not enough to avoid digging deep into their parents’ savings. Another criticism is that a large amount of the aid offered by universities comes in the form of student loans which must be paid back after graduation. In the increasingly competitive job market—in which the value of a university is regularly depreciating and it can be very difficult for students to find jobs after graduation—this can be a major source of stress for new graduates.

However, the fact remains that one does not have to take out huge loans to pay for college. Public universities, though still charging tuition, are considerably more affordable than private ones if the student is a resident of the state. Also, many universities, both public and private, offer merit-based scholarships for promising students regardless of financial need. While not all universities offer such scholarships—most of the Ivy League schools, for example, offer only need-based aid—there are many that do. Private foundations also can be a gold mine for funding; however, while their scholarship offerings may not be well-publicized, the student must do some hunting in order to find them.

The process of paying for college is complicated and certainly intimidating to the newcomer, but by no means is it impossible to navigate. And, with the right research and planning, students of all economic backgrounds can find that a tertiary education in some form is available to them.

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