Financial Aid
Paying For College
There are several ways to afford college.
- taking out federal loans or private loans
- having your parents pay for it
- having a grandparent pay for it
- scholarships
- federal grants
- state grants
- student paying for it
- savings
- employer sponsorships
- loan repayment program from future employer
- career builders state program
- 529 college savings plan from Bank of North Dakota
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Best Resources
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College Handbook to Finances - Bank of North Dakota
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FAFSA Videos from Bank of North Dakota
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FAFSA
FAFSA is the free application you complete to see if your student qualifies for "federal" financial aid loans or grants. Until the age of 23, students have to report their parent's income regardless of a family's willingness to pay or not. If a student accepts a loan, the student is the person primarily responsible for paying it back, but the parents are also listed as secondary.
FAFSA Questions I Hear Often
1. My parents aren't giving me any money for school, why should I be forced to use their income?
Answer: Unless you divorce your parents, are a ward of the state or have no contact, you will be forced to use their info.
2. Do I count my farmland, equipment, and buildings as assets?
Answer: Farmers do NOT count their land or any other farming asset on the FAFSA. The only thing that would count as an asset is if you didn't farm but did own investment farming land (that you do not farm yourself) and a secondary vacation home. You will need to include cash on hand and in your bank but we both know that can fluctuate a lot.
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3. What is counted as an asset?
Answer: Your main/primary house is NOT counted as an asset. Neither are your cars. Only a secondary vacation home, time share, cash on hand, and cash in the bank count. When you get into stocks, bonds, etc, we will need to consult a FAFSA expert to make sure we are or are not including those.
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4. Can I just take a loan out at my bank?
Answer: Typically no. There are private loans like Sallie Mae but these loans can carry huge interest rates (over 10%) and will start generating interest the day you take the loan out.
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5. What the best federal loan?
Answer: Subsidized loan. The government pays your interest while you are in college.
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6. Which loans are covered by government and/or employer repayment program.
Answer: This is tricky. There are several loan repayment programs. Typically employers will pay back only "federal" loans not personal loans from Sallie Mae or a personal loan from a friend. However, with employers becoming more competitive, it may change.
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7. When do you start paying loans back?
Answer: Typically a student gets a grace period following graduation. If they chose to attend a graduate program, then their loans can be deferred. Some people chose to pay during college and others elect to start paying once they are employed full time. Also, federal loans are essentially contracted out to 3rd party servicer. I have had one loan get reassigned to several different loan servicer. As the borrower, it's my responsibility to keep up with that.
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8. My student qualified for a Pell Grant. Now what?
Answer: A pell grant is money students do not have to pay back. Students get around $7000 per year, if they qualify. They have also qualify for an SEOG grant, which ranges from $100-$4000 a year (if qualified).
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9. How often do you fill out the FAFSA?
Answer: You will complete the FAFSA every year. It's ideal to complete when it opens in October. You will need your last year's tax returns. Each college is allocated so much money in grants and loans, so the sooner it's completed the higher the likelihood you can reserve your funds.
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10. What if my income is vastly different than what my tax return says?
Answer: Farming has its ups and downs. People change jobs. People get laid off. If you have a significant change to your income anytime, contact the college's financial aid office.
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11. My student qualified for some loans but not enough to cover the cost of tuition and books.
Answer: This is tough. This student will either need to take out additional private loans (which can have very high interest rates), talk to an employer about getting sponsored, use credit cards, apply for a lot of scholarships, or reassess their college plans. Most schools have went away from payment plans.
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12. What do I need to start the FAFSA?
Answer: You will need your last year's tax return. If you didn't file, but receive social security or any other income, you may need to access how much you get a year exactly. You will also need a FAFSA ID number, which can take a couple of weeks to get.
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13. Who can help me with the FAFSA?
Answer: Trio is a program we have at DP that helps kids access college. They can provide assistance completing the FAFSA. Bank of ND and your college's financial aid office can also help. There are many videos on BND to help break down how to complete it correctly.
