If you have kids, you probably know that only health care cost increases can compete with the inflation seen by education costs. This means that you are probably going to need to do what you can to help your child get the college financial aid that he or she needs. Even if you have been contributing to a 529 Plan or a Coverdell ESA, chances are that you might need a little more to help things along. Getting a job is always an option for college students, but there are other ways.
Here are some suggestions when it comes to finding college financial aid:
The Free Application for Federal Student Aid is necessary if you want federal grants, certain types of state aid, access to work study programs and access to subsidized and unsubsidized federal student loans. The earlier you fill out the FAFSA, the better, since it’s s first-come, first-served process. So you should fill out the FAFSA as soon after January 1st as possible for the upcoming academic year.
This form has to be filled out every year to continue taking advantage of government financial aid programs. And remember: 529 and Coverdell assets are considered parental assets, and not student assets. Pell Grants and subsidized student loans are offered based on need, but if you don’t qualify for those, you might qualify for work study or unsubsidized loans at competitive rates.
The government has a web site aimed at student aid questions. On this site, you can also look for different types of special grants available. Two promising grants include the SMART grant for undergrads who are going into science and technology fields, and the Academic Competitiveness Grant, offering money to students who went through a rigorous high school track. Grants are great because you don’t have to pay them back. It’s free money that can help pay for your education.
Don’t shun scholarships just because they are for small amounts. The bottom line is that ten $1,000 scholarships add up to $10,000. That’s not too shabby. There a number of free web sites that can aid your search for scholarships you qualify for:
Many of these sites will send you alerts about scholarships of special interest to you. Check with your local Chamber of Commerce to see if any businesses sponsor students or provide scholarships. This is common for students planning to major in business fields.
It is also a good idea to contact your school’s financial aid office and ask about scholarship programs based on leadership, academics, athletics, financial need, specific courses of study and endowments. In some cases, individual departments offer book scholarships, teaching assistantships and other types of aid to their students. But you’ll never know if you don’t ask.
As always, borrowing should be the last resort. Carefully choosing a school that provides a good education for your dollar can save you money. You don’t have to go to an expensive school to get a good education. So, if your savings, grants and scholarships don’t cover the cost of an expensive school, consider a less expensive school. If you still have a college funding gap, carefully consider where you get your loans. Your first choice should be federal loans — subsidized if possible. Nellie Mae and Sallie Mae offer insight into subsidized loan possibilities.
If you still have a funding gap after maxing out your federal student loans, you can look at sites like TuitionU that help you find private student loans from a community interested in students committed to success. There are also organizations like TERI that can help you get private students. But be aware that the interest rates are higher, and the credit requirements stricter. You are better off borrowing as little as possible, and trying to keep any borrowing you do limited federal loans.
Even though college is expensive, there are numerous sources for financial aid. Planning ahead and opening some sort of savings plan is your best option, as well as working toward qualifying for scholarships, but if you are down to the wire, you might have to borrow — and there are plenty of folks willing to lend money. Do your best to limit your student loans, though, using loans as a last resort after savings, grants and scholarships fall short.