Many people qualify for need-based financial aid, but most schools can’t afford to meet every family’s full need. Section H2 of the C.D.S. tells you how much of the need, on average, a school is able to meet. Families often end up filling any gap with student or parent loans.
Many will benefit. President Biden’s executive order means the federal student loan balances of millions of people could fall by as much as $20,000. Here are answers to some common questions about how it will work:
Who qualifies for loan cancellation? Individuals who are single and earn $125,000 or less will qualify for the $10,000 in debt cancellation. If you’re married and file your taxes jointly or are a head of household, you qualify if your income is $250,000 or below. If you received a Pell Grant and meet these income requirements, you could qualify for an extra $10,000 in debt cancellation.
What’s the first thing I need to do if I qualify? Check with your loan servicer to make sure that your postal address, your email address and your mobile phone number are listed accurately, so you can receive guidance. Follow those instructions. If you don’t know who your servicer is, consult the Department of Education’s “Who is my loan servicer?” web page for instructions.
How do I prove that I qualify? If you’re already enrolled in some kind of income-driven repayment plan and have submitted your most recent tax return to certify that income, you should not need to do anything else. Still, keep an eye out for guidance from your servicer. For everyone else, the Education Department is expected to set up an application process by the end of the year.
When will payments for the outstanding balance restart? President Biden extended a Trump-era pause on payments, which are now not due until at least January. You should receive a billing notice at least three weeks before your first payment is due, but you can contact your loan servicer before then for specifics on what you owe and when payment is due.
Parents whose kids get in but find that a school meets even less of their need than average can appeal the financial aid offer. And if the school’s average gap seems particularly foreboding before application season begins, you can have a conversation with the financial aid officers. Ask them how they assess your odds of getting a decent amount of aid — and ultimately being able to afford the place at all.
Then there are the higher-income families. Plenty of people with household incomes of, say, $300,000 won’t qualify for much need-based aid, if any. Still, they may not have much college savings for their offspring if they’ve been repaying their own student debt for decades, and they may not feel able to afford a college’s full price or be willing to borrow a lot of money to do so.
That’s where Section H2A comes in. The technical description of what schools are revealing here is “institutional non-need-based scholarship or grant aid.” My translation is this: “Here’s how many discounts we issue to people who have the ability to pay, at least according to our financial aid calculations, but lack the willingness to do so.”
This is the so-called merit aid that so many schools give out nowadays. At lots of schools, nearly everyone gets something, and the C.D.S. lists the average amount of merit aid that people with no financial need end up getting.
The next step might be to use the form to find the number of people who get need-based aid and then the number who receive no-need merit. Add those together and subtract the sum from the total number of students, and you can figure out how many — or how few — people are paying the full price.
Article source: https://www.nytimes.com/2022/09/24/your-money/college-common-data-set-merit-aid.html
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