The Nursing School Adviser
Paying for Your Nursing Education

Whether you're considering a baccalaureate degree in nursing or have completed your undergraduate education and are planning to attend graduate school, finding a way to pay for that education is an essential part of your planning.

The expense of attending college is considerable and is increasing each year at a rate faster than most other products and services. In fact, the cost of a nursing education at a public four-year college can be more than $14,000 per year, including tuition, fees, books, room and board, transportation, and miscellaneous expenses. The cost at a private college or university, at either the graduate or the undergraduate level, can be more than $30,000 per year.

This is where financial aid comes in. Financial aid is money made available by the government and other sources to help students who otherwise would be unable to attend college. Almost $74 billion in aid is given or lent to students each year. Most college students in this country receive some form of aid, and all prospective students should investigate what may be available. Most of this aid is given to students because neither they nor their families have sufficient personal resources to pay for college. This type of aid is referred to as need-based aid. Recipients of need-based aid include traditional students just out of high school or college, as well as older, nontraditional students who are returning to college or graduate school.

There is also merit-based aid, which is awarded to students who display a particular talent, show extraordinary promise, or are members of groups that are underrepresented in colleges. Many colleges and graduate schools offer merit-based aid in addition to need-based aid to their students.

There are three types of aid—scholarships (also known as grants or gift aid), loans, and student employment (including fellowships and assistantships). Scholarships and grants are outright gifts and do not have to be repaid. Loans are borrowed money that must be repaid with interest, usually after graduation. Student employment provides jobs during the academic year for which students are paid. For graduate students, student employment also includes fellowships in which students work, receive free or reduced tuition, and are paid a stipend for living expenses.

Most of the aid available to students is need-based and comes from the federal government through six large financial aid programs (see Table 1). Two of these programs are grant-based—the Federal Pell Grants and the Federal Supplemental Educational Opportunity Grants—and are only available to undergraduate students. Three are loan programs—the Federal Perkins Loans, the Federal Family of Education Loans, and the William Ford Federal Direct Loan—that are provided to both undergraduate and graduate students. The sixth program is a student employment program called Federal Work-Study Program, which is also awarded to undergraduate and graduate students.

The second-largest source of aid is the colleges and universities themselves. Almost all colleges make available funds, most of which are grants, scholarships, and fellowships. These can be either need- or merit-based.

A third source of aid is state governments. Nearly every state provides aid for students attending college in their home state, although most only have programs for undergraduates. Almost all state aid programs are scholarships and grants, but a few states have loan and work-study programs.

A fourth source of aid is private sources such as corporations, civic associations, unions, fraternal organizations, foundations, and religious groups that bestow scholarships, grants, and fellowships to students. Most of these are not based on need, although the amount of the scholarship may vary depending upon financial need. The competition for these scholarships can be formidable, but the rewards are well worth the process. Many companies also offer tuition reimbursement to employees and their dependents. Check with the personnel or human resources department at your or your parents' place of employment for benefit and eligibility information.

Since most of the financial aid that college students receive is based on need, colleges employ a process called need analysis to determine student awards. For most applicants, there is one form that the student and parents (if the student is a dependent) fill out on which family income, assets, size, and so forth, are reported. This form is the Free Application for Federal Student Aid (FAFSA). The end result of this need analysis is the student's "Expected Family Contribution," or EFC, representing the amount a family is able to contribute toward educational expenses.

The basic principle of government financial aid is that the primary responsibility for paying college expenses resides with the family. In determining your EFC, you will first need to know who makes up your "family." That will tell you whose income is counted when the need analysis is done.

Graduate Students: By definition, all graduate nursing students are considered independent. Therefore, only your income and assets (and your spouse's if you are married) count in determining your expected family contribution.

Undergraduate Students: If you are financially dependent upon your parents, then their income and assets, as well as yours, are counted toward the family contribution. But if you are considered independent of your parents, only your income (and your spouse's if you are married) counts in the calculation.

According to the U.S. Department of Education, in order to be considered independent for financial aid, you must meet any ONE of the following:

• You were born before January 1, 1980
• You are married.
• You are or will be enrolled in a master's or doctoral program (beyond a bachelor's degree) during the 2003&-04 school year.
• You have children who receive more than half their support from you.
• You have dependents (other than your children or spouse) who live with you and who receive more than half of their support from you and will continue to receive more than half their support from you through June 30, 2004.
• You are an orphan or ward of the court (or were a ward of the court until age 18).
• You are a veteran of the U.S. Armed Forces ("veteran" includes students who attended a U.S. service academy and who were released under a condition other than dishonorable).

If you meet any one of these conditions, you are considered independent and only your income and assets (and your spouse's if you are married) count toward your family contribution. Remember, if you are attending school as a graduate student, you are automatically independent.

If there are extraordinary circumstances, the financial aid administrator at the college you will be attending has the authority to make exceptions to the rules. Extensive documentation of the extraordinary situation will have to be provided by you.

If you are considered an independent student, take your total family income for the previous year, subtract all state and federal taxes paid (including FICA), subtract another $3000 ($6000 if you are married), and divide the result in half. If your family income is less than $50,000, this is your estimated EFC. If your income is greater than $50,000, add 35 percent (12 percent if you have children) of your total assets (bank accounts, stocks, etc.). This result is your estimated EFC. If you are dependent, the EFC formula is more complicated, but, there are a number of EFC calculators available on the web, including http://www.finaid.org.

Now that you know approximately how much you and your family will be expected to contribute toward your college expenses, you can subtract the EFC from the total cost of attending a college or graduate school to determine the amount of need-based financial aid for which you will be eligible. The average costs we have listed as a guide assume that you will be attending nursing school full-time. If you will be attending part-time, you should adjust costs accordingly.

After you have subtracted your EFC from the cost of your education and determined your financial need, you will have a better understanding of how much assistance you will need. Even if you do not demonstrate financial need, you are still encouraged to file the FAFSA, as you may be eligible for assistance that is not based on need. The process for applying for aid can be confusing if you are not familiar with completing these types of applications. If you need assistance, you should contact the financial aid office for help.

Undergraduate and graduate students applying for aid must fill out the FAFSA. This form is a four-page application available in high school guidance offices, college financial aid offices, state education department offices, many local libraries, and even your local congressional representative's office. The FAFSA first becomes available in November or December, almost a year before the fall term in which you will enroll, but you cannot complete it until after January 1.

After you and your parents (if appropriate) have signed your completed FAFSA, you send it in the envelope provided to a processing center. Do not send any additional materials, but do make a copy of what you filled out. Users of the Internet can apply electronically through the Department of Education's online FAFSA at http://www.fafsa.ed.gov. If you do file online, you will need to have a Personal Identification Number (PIN). The PIN can easily be obtained at http://www.pin.ed.gov. Dependent students will need a PIN for themselves and one parent.

The processing center enters the data into a computer that runs the federal methodology of need analysis to calculate your family contribution. This center then distributes the information to the schools and agencies you listed on the FAFSA. The actual determination of need and the awarding of aid is handled by each college financial aid office.

It is generally recommended that you complete the FAFSA as soon as possible after January 1. If it is much later, even while you are actually enrolled in college, it is not too late to qualify for financial aid. If, for example, you do not decide whether or not to attend college or graduate school until just before classes begin, you can still complete the FAFSA and be eligible for many federal and state financial aid programs.

Two to four weeks after you send in your completed FAFSA you will receive a Student Aid Report (SAR) that shows the information you reported and your calculated EFC. This is an opportunity for you to make corrections or to have the information sent to another school you are considering. The SAR contains instructions on how to make corrections or to designate additional schools.

At the same time that you receive the SAR, the college(s) you specified also receive the information. The financial aid office at the school may request additional information from you or may ask you to provide documentation verifying the information you reported on the FAFSA. For example, they may ask you for a copy of your (and your parent's) income tax return or official forms verifying any untaxed income you or your parents received (e.g., Social Security, disability, or welfare benefits).

Once the financial aid office is satisfied that the information is correct, a financial aid offer will be made. Many colleges like to make this offer in the spring prior to the fall enrollment so that students have ample opportunity to make their plans; however, some colleges will wait until summer to notify you.

The FAFSA is the required form for applying for federal and most state financial aid programs. Most schools now use the FASFA to determine eligibility for institutional aid; however, some colleges and graduate schools require additional information to determine eligibility for institutional aid. Nearly 500 colleges and universities, plus more than 200 private scholarship programs, employ a form called the Financial Aid PROFILE from the College Scholarship Service (CSS). While the form is similar to the FAFSA, several additional questions must be answered for colleges that award their own funds. You begin the process in October or November by completing a PROFILE Registration form on which you designate the schools to which you are applying. A few weeks later, you will receive a customized, individualized application that you complete and send back to CSS, which, in turn, forwards your application information to the schools you selected.

If you qualify for need-based aid, a college will typically offer a combination of the three types of assistance--scholarship/grant, loan, and work-study--to meet this need. An offer of aid usually is made after you have been admitted to the college or program. You may accept all or part of the financial aid package. If you will be enrolling part-time (less than 12 credits per term), be sure to contact the financial aid office in advance.

If you are awarded Federal Work-Study, the amount you are awarded represents your earnings limit for the academic year under the program. In general, schools assume you will earn this money on an hourly basis, so it cannot be used to pay your term bill charges. On most campuses there are many jobs available for students. Not all of these are limited to students on the Federal Work-Study program. Check with your Placement Office or Financial Aid Office for more information.

One thing to keep in mind is that the student budget used to establish eligibility for financial aid is based on averages. It may not reflect your actual expenses. Student budgets usually reflect most expenses for categories of students (for example, single students living in their parents' home, single parents living in an apartment or house near campus, etc.). But if you have expenses that are not included, you should talk with someone in the financial aid office about making a budget adjustment.

Because a family contribution is based on the previous year's income, many nursing students find they do not qualify for need-based aid (or not enough to pay their full expenses). This is particularly true of older students who were working full-time last year but are no longer doing so or who will not work during the academic year. If this is your situation, you should speak to a counselor in the financial aid office about making an adjustment in your family contribution need analysis. Financial aid administrators may make changes to any of the elements that go into a need analysis or to the calculated family contribution, if there are conditions that merit a change.

If you still don't qualify for need-based aid but feel you do not have the resources necessary to pay for college or graduate school, you still have several options available.

First, there are two loan programs for students for which need is not a consideration. These two programs are the Unsubsidized Federal Stafford Loans and the Unsubsidized Direct Loans. There is also a non-need-based loan program for parents of dependent children called the Federal PLUS loan. If you or your parents are interested in borrowing through one of these programs, you should check with the financial aid office for more information. For many students, borrowing to pay for a nursing education can be an excellent investment in one's future. At the same time, be sure that you do not overburden yourself when it comes to paying back the loans. Before you accept a student loan, the financial aid office will schedule a counseling session to make certain that you know the terms of the loan and that you understand the ramifications of borrowing. If you can do without, it is often suggested that you postpone student loans until they are absolutely necessary.

A second option, if you do not qualify for aid, is to search for non-need-based scholarships. Be wary of scholarship search agencies that promise to find you scholarships but ask you to pay a fee. There are many resources providing lists of scholarships, including the annually published Peterson's Scholarships, Grants & Prizes, that are available in libraries, counselors' offices, and bookstores. Non-need scholarships require application forms and are extremely competitive; only a handful of students from thousands of applicants receive awards. There are many scholarship search engines available on the Internet. Also, check out opportunities on our own site, http://www.petersons.com.

Another practical option is to work more hours at an existing job or to find a paying position if you do not already have one. You will probably be on your own when it comes to finding summer work, but the student employment office at your college should be able to help you with a school year job, either on or off campus. Many colleges have vacancies remaining after they have placed aid students in their work-study jobs.

You should always contact the financial aid office at the school you plan to attend for advice concerning sources of college-based and private aid that may be familiar to them.

Bob Atwater is a certified personnel consultant and certified medical staff recruiter and founder of Atwater Consulting & Recruiting in Lilburn, Georgia, a consulting firm for the employment and recruitment of physician assistants, nurse practitioners, certified nurse midwives, nurses, and nursing managers.

Health-care administrators, Atwater says, have coined a phrase to characterize their efforts to meet the growing demand for nurses with better skills and training: "Grow your own."

"Constant training through the course of a nursing career is the only way to keep pace with the technological and medical advances, but it can be a financial burden on the nurse," Atwater says.

That is why many employers now give qualified employees a benefits package that includes a continuing education allowance.

For the employer, this type of benefits package can help to recruit candidates willing to further their careers through education. Administrators feel it is the best way to build a staff of nurses with up-to-date certifications in all areas.

In a constantly expanding field, nurses should be required to continue and update their education. The nurses get a paid education, can keep their job, and work flexible hours while they are going to school. Inquiries about these allowances should be made during an interview with the company's human resources department.