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User:Criss.sanchez/Students Coping with CSU Tuition Costs#Financial Aid

Financial Aid helps with students with their college expenses by giving awards such as; loans, grants, scholarships, or any offers received from a paying job.

→ History of Financial Aid

John Monro[1] of Harvard University created the first financial aid need analysis. From 1954 to 1974[2] the College Board spends time creating the College Scholarship Service (CSS) which then created forms such as; Parent’s Confidential Statement (PCS), Married Student Statement (MSS) later changed to become Student’s Financial Statement (SFS). In 1976, the College Scholarship Service created the Financial Aid Form which combined the Parent’s Confidential Statement and the Student Financial Statement forms into one. The Higher Education Amendments of 1992 (Pub.L. 102-325) created the Free Application for Federal Student Aid (FAFSA) merging with the Pell Grant. All the correct documents and information are needed in order for an application to be completely filled out. FAFSA will connect their data base with their connection with the Internal Revenue Service (IRS), once everything is processed and confirmed that all information checks out students then would now start to receive awards from them, which are the loans and grants. The process of filing for financial aid has defiantly advanced to be more simpler, from 1997 to present day was when FAFSA came to the web.

→ Applying for Financial Aid

Students could apply for financial aid anytime before the semester of school they are about to go into, however, the most important thing is to be aware of deadlines that are coming up. In order to apply for FAFSA, students should have the required tax returns to use of their own or their parents. Creating a FAFSA account is a part of the application process, doing this will open up the questions that are asked and also the forms that would give them information about the individual. Fully getting the information on FAFSA takes from 5-10 business days.

→ Types of Financial Aid

• Pell Grant

Created by the Higher Education Act of 1965, became official in 1972 named the Basic Educational Opportunity Grant. The Pell Grant came to be in 1980 and this is free money that does not need to be repaid. All the money could be used for anything from school expenses to personal expenses as well.

• California Grant

This grant is given based upon the student's parent's income and their grade point average in high school. Looking at the grade point average, the higher the grade the more money would be awarded.

• Subsidized Loan

A loan that could be taken out based on the parent's income, the loan has the benefits on the side of the student. The U.S. Department of Education pays any interest that would be added on over the years of the student's college career.

• Unsubsidized Loan

A loan that could be taken out based upon the parent's income, students that are further in the school who can not take out a subsidized loan anymore would get this. However, the unsubsidized loan would create interest over time which would be added on to what is borrowed.

→ Financial Aid Causing College Attrition

There are many causes as to why students drop out in their first year, the main issue is the money. Financial aid takes time to process, if the grants and loans are awarded late some students give up then and there and decided not to go to school because they have to pay out of pocket until the awards are rewarded. Once paid out of pocket, if awards come in after, the money will all get reimbursed back to your account. Students with low income tend to get more money from pell grant and awards (subsidized loan, unsubsidized loan), with that the students have a less dropout rate [3] since they are getting so much free money from the school. Minorities however, have the money for the school but most do not want to pay for them so most of them drop out after their first year. Loans have to be carefully read and understood to know what students get themselves into. Some students accidentally apply for a loan that has interest on their money which in turn would have them paying almost twice as much as their tuition by the end of the year. With the grants, students should calculate how much left they would have to pay or if it covers it all. If the out of pocket money is affordable then there should not be a need to pull out a loan. Getting grants would benefit in helping paying of for the tuition, the amount given is split into two which would be for the fall and spring semester. However, if you apply for FAFSA for one semester for the year the money given would be for that one semester. The researchers, Rong Chen and Stephan L. DesJardins, in "Investigating the Impact of Financial Aid on Student Dropout Risks: Racial and Ethnic Differences" there is more to college dropouts within the financial aid conflicts. According to the research, the race and ethnicity of a student contribute to student's reason of dropping out. Comparing families of Hispanic, African American, and Asians mainly, it shows that between these three that having a different background effects the amount of money received and the ones that have a higher rate of leaving school. Students that still need aid for their tuition would usually try to go into work study, which lets the student work for the school and the money would straight towards their semester tuition. That is one way to pay off tuition but of course pulling out a loan is always an option besides paying out of pocket.