Navigating the Maze of Federal Financial Aid

Federal financial aid can be complicated and for many adult students, navigating through the many options can seem like an interminable roadblock when they are thinking about going to college. Yet, there has never been a better time to consider completing a degree or pursuing a new one. And technology is the biggest reason why.

Think about it. Drones inspect deteriorating bridges. Homeowners ask digital assistants to turn on their lights. Global employees gather around their laptops for a remote meeting to strategize around a recent computer hack. Your phone is “smart” and maybe the automobile you are sitting in is driving itself. The world once imagined by science fiction blockbusters has become reality, driven largely by rapid advances in technology and automation.

This is the new normal. But just beneath the shiny surface of automated wonder and electronic convenience is a downshift in demand for jobs once performed by humans. Change doesn’t always mean jobs disappear, however. In some industries, roles and tasks are evolving to adjust to these new advances. Jobs that require human interaction or that take place in unpredictable environments are poised to increase in demand, while physically demanding jobs or work that requires processing data will likely become scarce, according to a 2017 report by the McKinsey Global Institute.

By 2030, up to 54 million adults may find they need to learn new skills or complete another level of education in order to find work in a new field, McKinsey reports. Even those who don’t need to change career paths will need to adapt and increase their skills to keep up with technological advances. But the future isn’t bleak. If current trends follow historical patterns, productivity will rise and with it — opportunity.

Education is the key to thriving in an evolving workplace. What’s holding you back?

Education Sticker Shock

Adding up the annual costs of higher education may give prospective adult learners sticker shock, and it’s no wonder. College tuition has been on a steady increase since the dawn of the millennium, and today four out of 10 adults age 18 to 29 are paying off student loans.

But there is hope. Federal financial aid programs can and do provide much-needed support. Still, the graduating high school class of 2017 left about $2.3 billion in free federal student grant money for college unclaimed, according to a recent analysis by NerdWallet. The Bill and Melinda Gates Foundation estimates that annually 2 million students don’t apply for financial aid they are eligible to receive. Non-traditional students, in particular, often incorrectly assume their age and annual income eliminates them from the pool of available funds.

In some cases, failing to pursue financial aid can mean some students simply cannot afford college, while others take on more debt than they can manage.

The Payoff of a Degree

Despite the short-term obligations, the long-term benefits of higher education beg the question: Can you really afford not to go to college? The overwhelming majority of millennials with at least a college degree — about nine out of 10 — say the cost of their education has already paid off or will pay off in terms of job security, satisfaction and higher earning potential, according to Pew Research. Higher wages aren’t just an assumption — college-educated millennials reportedly earn an average of $17,500 more a year than their peers who hold just a high school diploma, according to Pew. That gap is wider now than it was in previous generations.

Finish Faster

Adult learners come from a variety of backgrounds, from parents returning to school after raising a family, to active-duty or retired servicemembers, to career-changers or high-school graduates who delayed pursuit of higher education. No matter the circumstances, a degree can be a pathway to a career instead of just a paycheck and can help bolster the so-called “soft skills,” like team management and communication, that are relevant to any field. National University can help make the goal of a degree a more accessible reality.

Remote learning may conjure images of late-night infomercials, but the reality is quite the opposite. Adult learners can pursue their passion at any one of National University’s four professional schools: the School of Business and Management, School of Engineering and Computing, School of Health and Human Services, or School of Professional Studies. Or, they may prefer to attend one of National University’s two colleges — the Sanford College of Education and College of Letters and Sciences. It is possible to complete an associate’s, bachelor’s, or master’s degree with 70 options available to earn online. The school also offers a variety of certificate programs in in-demand fields, including healthcare, education, law, and business.

Founded in 1971 by retired US Navy Lieutenant Commander David Chigos, National University remains faithful to its military roots, offering military tuition discounts and scholarships to those who are serving or have served, as well as their dependents. Thirty percent of the school’s 30,000 students each year are active-duty servicemembers and veterans. Still, the student body is a diverse one, with students from all 50 states and 65 countries.

Students can work on their course programs on their own schedule from whatever location is convenient. Flexible monthly starts and accelerated four-week formats bring commencement even closer to reality, without sacrificing the high-quality academic rigor once reserved for the traditional campus experience.

Post-graduation, National University helps its students and alumni achieve their professional aspirations via career counseling, resume and cover letter critique, and mock interviews.

But First, FAFSA

National University’s financial aid staff is ready to help navigate the anticipated costs of a degree, and identify the resources available through student loans and grants. In order to qualify for federal assistance to offset or delay the cost of tuition, students must fill out the Free Application for Federal Student Aid, better known as FAFSA.

Non-traditional students may wonder, “Do I even qualify for FAFSA?” The good news is there is no age limit associated with eligibility. As long as the basic requirements are met, there is no reason a non-traditional student cannot receive some form of aid.

There is no fee to submit a FAFSA and it can be completed online. Every college student should plan to fill it out annually, as federal financial aid awards cannot be made without this information. The deadline varies by state, but since some aid is awarded on a first-come, first served basis, it’s best not to procrastinate. The submission period is open from October to June every year.

It can be a daunting task to complete FAFSA, however. Currently topping out at three times the length of the standard federal income tax form, with more than 180 questions, many students simply skip over filling out the form or abandon it without completing it. But it is a critical first step in securing federal financial aid — and one that can be taken even before committing to a particular school or program.

Filling out the form online will yield the fastest turnaround on results, and it also provides handy resources to help in answering the questions.

What You Will Need

Gathering the necessary documents in advance will help ease the process of completing the FAFSA. Students should have handy:

  1. Their Social Security Number
  2. Alien Registration Number (if not a U.S. citizen)
  3. Federal income tax returns, W-2s, and other records of money earned. (Note: It may be possible to transfer a federal tax return information into FAFSA using the IRS Data Retrieval Tool.)
  4. Bank statements and records of investments (if applicable)
  5. Records of untaxed income (if applicable)
  6. A Federal Student Aid ID (FSA ID) to sign electronically

Once the FAFSA has been electronically signed and submitted online, a personalized Student Aid Report, or SAR, will follow roughly a week or two later. The SAR will note the student’s expected family contribution toward tuition and outline eligibility for federal financial aid.
It’s important to review this document very carefully to ensure everything has been summarized accurately and completely. Any mistakes on a SAR can be corrected, but it will require resubmitting the FAFSA.

National University offers eligible students access to grant and loan programs, a comprehensive Financial Aid Guide, and, for those times when a live person on the end of the phone is an absolute must, a staff of financial aid advisors ready to help. Financial assistance can take many forms, and it’s important to understand what each federal offering entails.

The office of Federal Student Aid offers more than $150 billion to students every year. The financial assistance can help learners pay for tuition, housing, food, or to buy the books and supplies needed to complete coursework.

The FAFSA4caster can help calculate the estimated aids and costs associated with enrollment.
Not every type of aid is created equal, however. There are a number of options available:

Federal Grants

Grants are essentially free money for education and should serve as the financial foundation for higher learning. Unlike scholarships, which are often awarded to honor achievement in academics, sports or other criteria, grants are usually made based on an applicant’s financial need. And, under most circumstances, they don’t need to be repaid. State and local governments may have their own grants to disburse. These may be based primarily on income, but also may help encourage underrepresented or disadvantaged populations to enroll in college. Grants distributed by the federal government fall into one of four categories:

  • Federal Pell Grants
    Undergraduates who haven’t received a bachelor’s degree are the most common recipients of these awards, although students enrolled in post-baccalaureate teacher certification programs may also be eligible. The maximum Federal Pell Grant award changes annually. In the 2018-19 school year, the maximum award is $6,095. A number of factors are brought into consideration when determining the actual amount a student may receive. These considerations include the Expected Family Contribution, tuition at the student’s college of choice, his or her enrollment status, and the length of the academic year in which the student is enrolled. Students may receive the Federal Pell Grant for up to the equivalent of 12 semesters or the equivalent. Students nearing their limit will be notified.

    In some cases, an additional award can be made to help offset the cost of the summer semester in an accelerated program. This is commonly referred to as a “year-round Pell.”

    One of the greatest advantages of receiving a Federal Pell Grant is that other sources of student aid do not affect the amount of the award. Institutions that participate in the program receive enough funds annually from the U.S. Department of Education to pay the Federal Pell Grant amounts for all its eligible students.

  • Federal Supplemental Educational Opportunity Grants (FSEOG)
    Undergraduate students with exceptional financial need may receive this award, which is is determined by the college’s financial aid office. The amount of this award depends on the student’s financial need and the availability of funds at the college.

  • Teacher Education Assistance for College and Higher Education (TEACH) Grants
    These grants are awarded to students who intend to teach in a public or private elementary or secondary school serving students from low-income families. TEACH grants represent a rare case in which a federal grant may need to be repaid. If the service requirement is not fulfilled, this award could turn into a loan.

  • Iraq and Afghanistan Service Grants
    These awards go to students whose parents or guardians were members of the Armed Forces and died as a result of performing military service in Iraq or Afghanistan after Sept. 11, 2001. A student must have been under 24 years of age or enrolled in college at the time of the parent’s or guardian’s death in order to be eligible for this award.

Federal Loans

As with any loan, a federal student loan must be repaid with interest — regardless of whether the degree program has been completed. The amount that a student can borrow will be dependent on the information provided via the FAFSA, but in most cases, a credit check will not be required and no co-signer will be needed.

Federal loans for college fall into one of three categories:

  • Direct Subsidized Loans
    Sometimes referred to as Stafford Loans, these offer undergraduate students a low, fixed interest rate and flexible repayment options. Subsidized loans can end up saving a significant amount of money because the student will not be responsible for the interest that accrues while he or she is in college or while the loan is in deferment. The federal government picks up the tab on that interest.

  • Direct Unsubsidized Loans
    For these types of loans, once the loan is taken out by a student, interest begins accruing on the amount borrowed, and that interest is the student’s responsibility. However, unsubsidized loans are available to both undergraduate and graduate students. Financial need is not a factor in determining the amount available. A student’s school determines the amount based on the cost of attendance and other financial aid he or she is receiving.

  • Direct PLUS Loans
    The U.S. Department of Education is the lender of these loans, which do require a credit check. The limits are determined by subtracting other financial aid a student is receiving from the cost of attending his or her school. PLUS loans can provide coverage for tuition and expenses not covered by other means. Both graduate and professional students (and the parents of dependent undergraduates) are eligible for these loans.

Tax Credits

Once enrolled in school, tax credits can be an often-overlooked short-term benefit of making an investment in a degree. Currently, there are two options to reduce income on federal taxes:

  • American Opportunity Credit
    This is a credit of up to $2,500 for qualified college and post-secondary education expenses for an eligible tax-paying student or a taxpayer claiming the student as a dependent. To be eligible, the student must be enrolled at least half-time for one academic period beginning in the tax year, and still be in his or her first four years of higher education.

  • Lifetime Learning Credit
    This provides a tax credit of up to $2,000 per taxpayer per return for education expenses. It can help pay for undergraduate, graduate and professional degree courses  —including courses to acquire or improve job skills. There is no limit on the number of years it can be claimed, but to qualify, the taxpayer’s modified adjusted gross income must be $66,000 or less — $132,000 or less if married and filing jointly.

    The Internal Revenue Service has a helpful online tool to help determine eligibility for education tax credits. It only takes 10 minutes to walk through the questions. It was designed for taxpayers who were either U.S. citizens or resident aliens for the entire tax year for which they're inquiring.

    Yellow Ribbon School

    As a Yellow Ribbon approved university, National University offers additional financial aid, discounts, and scholarships to veterans and current military personnel and their dependents. For much more information about additional assistance that you may have access to as a member of the military community, please read our blog post, How Military Tuition Assistance Can Fund Your Education.

    National University Financial Aid Staff

    Thanks to its intensive one-course-per-month format, a college degree at National University is closer than it might appear. Students considering National University will find lifelong learning opportunities accessible, challenging and relevant, regardless of their background. You should not let the complexities of figuring out financial aid hold you back from achieving your goals.

    Despite all the resources online to help guide through the process of funding higher education costs, sometimes there is no substitute for talking to an actual human being. That’s where National University’s financial aid staff can make a real difference. Armed with compassion and expertise, the financial aid advisors can help prepare students for the strategies and options that will make the most sense now and after graduation, when loans come due. They are just an email or phone call away at financialaid@nu.edu or 1-800-NAT-UNIV, ext. 8500.

    To learn more about financial aid options and the application process at National University, download the step-by-step guide on “How to Finance Your College Education.”