You probably can't start planning for financing your college education early enough and no matter where you are in the process; it can be quite confusing.
Don't worry - you're not alone. There is a lot to learn about financial aid so don't feel overwhelmed. Take it one step at a time and you will get to the light at the end of the tunnel.
Below are the big pieces of the financial aid puzzle that will get you started off in the right direction,
FAFSA
It all starts with the FAFSA, Free Application for Federal Student Aid. The U.S. Federal government supplies some $46 billion annually in student aid, about 75 percent of all student aid. File your FAFSA early and follow through to make sure you get the financial aid you are eligible for.
The information you provide will be used to determine how much aid - and what types of aid - you'll be offered at each of the schools you're thinking about on your wish list.
Some types of financial aid - think grants and scholarships - are made available on a first-come, first-served basis, so it's critical that you submit your FAFSA as soon as possible after January 1. You won't be able to receive any amount of federal aid (including loans) until your FAFSA has been processed. (Enough said!)
If you're "chomping at the bit", and just can't wait, try the FAFSA4caster offered by the U.S. Department of Education. This free online tool will provide you and your family with an early estimate of eligibility for federal student aid.
Federal Aid
The Federal aid administered by colleges includes Perkins Loans, Direct Loans, College Work Study (CWS) and Supplemental Educational Opportunity Grants (FSEOGs)-the U.S. Department of Education gives aid to colleges, who decide which of their students need it most.
The Lifetime Learning tax credit provides a maximum $1,000 tax credit to help college juniors and seniors and graduate and professional degree students, as well as adults who want to go back to school. For detailed information on who is eligible for these and other tax benefits, it's best to refer to your Internal Revenue Service (IRS) forms and publications which are available at www.irs.gov.
Federal Loans
Federal Loans are available to both students and parents. Stafford Loans for students are either subsidized, where some of the accumulated interest is paid by the government, or unsubsidized, where the student pays all of the accumulated interest. PLUS and GradPLUS Loans are loans to parents and professional students for any costs that are not paid for by other aid.
Scholarships and Grants
Merit-based aid, usually scholarships or grants, is given to students who meet requirements not related to financial needs-like doing well in high school or displaying artistic or athletic talent. Contact your state's higher education agency or college financial aid offices to request information about these opportunities.
More Assistance
Organizations, foundations and other groups offer scholarships to academically promising students, minorities, women and disabled students. To learn more about these scholarships, speak with your school guidance counselor or go to the reference section of the public library.
Private Loans
Private loan products have become an attractive, and in many cases, a vital financing component as many parents and students find it difficult to bridge the financial gap between significant, and ever increasing, education costs and the caps associated with traditional funding sources such as federal loans, grants, and scholarships.
These alternative loans serve the needs of parents who may be faced with borrowing against the value of retirement funds, tapping personal savings, or leveraging the hard earned equity in their home. Be sure you exhaust all free money and federal loan options before considering private loans as an option to fund your education.
You can pay for college
Did you know every year, millions of students apply for and receive financial aid and almost half of all students who go to school receive some kind of financial assistance.
The bottom line: nobody who wants to go to college and is willing to work hard should be prevented by financial need.
A college education is vital for success in the modern economy-and we hope this site provides you with the resources necessary to estimate and prepare for the costs associated with attending college. By saving for college and taking advantage of financial aid from the U.S. Department of Education, colleges and states, and the competitive products from the partners in our cooperative, you can change college from a dream into a reality.
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Posted
Jun 12 2008, 10:07 AM
by
Librarian