Thank you to Samantha Benson from the Higher Education Student Assistance Authority (HESAA) for her presentation on essential financial aid information for students and parents as they prepare for college. Paying for college, especially the financial aid process, can be a complex and daunting aspect of the college admission process. However, Samantha broke down many aspects of the different sources of funding as well as the process to apply for aid into manageable and easily digestible nuggets of information.
Sources of financial aid include the federal government, state of New Jersey, the individual college or university, or other outside organizations such as churches or community organizations. Any of these sources may make available one of more of the following types of financial aid – grants (free money), scholarships (free money), loans (must be repaid, often with interest), or employment opportunities.
At the federal level, there are grants and loans available to students and their parents. Pell, SEOG, and TEACH grants are available in differing amounts and are generally awarded based on need. The federal government also provides all students with loan options, called the Federal Direct Loan Program. Split between subsidized (no interest accrual while in school and need based) and unsubsidized, undergraduate students can borrow up to a specified maximum amount each year, which increases based on your current year in school. The maximum for a freshman student is $3,500 subsidized and $2,000 unsubsidized. Graduate students can borrow up to and exceed the entire cost of a school years expenses. Interest rates will change from year to year, but the current interest rate for 2019 is 4.53% and a 1.062% origination fee.
The state offers a wide variety of grants, scholarships and loans, most of which are administered by HESAA. TAG is a need-based grant for NJ residents who attend an institution in New Jersey and are enrolled full-time in a qualifying degree program. Additionally, there is a part-time TAG grant that is specifically for students enrolled in a community college. There is also the Educational Opportunity Fund that is designed for educationally and economically disadvantaged students as well as the Governor’s Urban Scholarship, designed for disadvantaged students living in 1 of 13 designated areas and attending an institution in New Jersey.
The NJ STARS scholarship is designed for students who ranked in the top 15% of their high school class and are attending community college full time. NJ STARS II is designed for those students in NJ STARS who move on to a 4-year state or private institution in New Jersey as a full-time student and have a family taxable income of less than $250,000. Another state scholarship is NJ GIVS, specifically for women and minorities who enroll in a community college or technical school while pursuing a certificate or degree in a construction-related field. Lastly, the Community College Opportunity Grant offers free tuition and fees at a community college for a student who’s household Adjusted Gross Income is less than $65,000.
If you are looking for additional funding after all grants and scholarships, New Jersey does offer NJCLASS loans, designed to cover the rest of the costs of college not covered by other means. Your interest rate is based off of the term of the loan, which can be 10, 15 or 20 years. Each option has a 3% origination fee and interest rates ranging from 3.99 – 6.50% as of 2019.
In order to be eligible for most of these, as well as all institutional financial aid, the student must complete the FASFA each year. The FASFA is free and designed to take a snapshot of the student and their household’s financial status in order to better determine eligibility for financial aid, mainly need-based aid. Available October 1st of every year for the following school year, the FASFA does allow you to import your tax information from the IRS as long as you have filed for that year, your return has not been amended, and you did not file “married, filing separately”. In addition to the FASFA, the student and a parent will need to register for a FSA ID in order to electronically sign the FASFA. The earlier you fill out the FASFA, the better and it is a good rule to complete all of your forms and documentation by the earliest date based on the dates listed by each school the student wishes to attend.
Components of the FASFA include:
- student demographics
- student income and assets
- student dependency status
- parent demographics
- parent(s) income and assets
- household size
- federal means tested benefits
If you are applying for any state-based grants, scholarships, or loans, you will need to file a New Jersey Alternative Financial Aid Application through NJFAMS.
For more information on any of the financial aid options listed above or help navigating the process, please contact Samantha Benson at email@example.com or 609-588-3300 ext. 1403. For a copy of the presentation, please visit https://www.njstatelib.org/wp-content/uploads/2019/09/FInancial-Aid-Information-Session.pdf.