Everyone thinks of the federal government first when looking
for financial aid, and it is the first place you should look.
Federal financial aid (Pell grants and Stafford and Perkins
loans) is based on expected family contribution (EFC), which
is calculated from the free application for federal student
aid (FAFSA). You and your parents will need to fill out a
FAFSA as a first step toward any aid. For more information
on the FAFSA, or to submit yours online, go to the Department
of Education’s Site.
If you’d like to get an idea now of what to expect
when you see your EFC, use the calculator for federal methodology
College Board. Fill out the FAFSA even if you’re
pretty sure you won’t get federal aid. The EFC serves
as a basis for calculating other aid and you never know –
you just might be pleasantly surprised. Tips for filling out
the FAFSA can be found at FinAid
Some schools will ask you to fill out a college scholarship
service (CSS) profile, as well. The College Board web site
allows you to Submit
Your CSS Profile Online.
Talk to the financial aid people at every college you are
interested in. Tell them what you need. If the amount of help
you get is going to make or break your decision to attend
that school, let them know that, too.
If you’re still in high school, visit your guidance
counselor. While you’re there, take a look at the bulletin
board in the guidance office. This is a great place to find
local and smaller sources of help.
If you’re an athlete in any sport, ask about athletic
scholarships. They’re not just for burly football players.
In fact, the less common sports are often the better source
of aid, especially for women. For more information on athletic
scholarships, go the NCAA
Web site and click on scholarships.
Other, not so obvious places to look for aid include:
- The state government
- Your local government
- Unions and professional organizations
- Civic groups
- Veterans groups
- Religious organizations
- Ethnic organizations
- Organizations related to your planned career (guilds,
unions, and professional organizations)
See a trend? Right! Any organization that any member of your
family is even remotely connected to is a possible source
of a scholarship.
The military is also a traditional source of college financial
help, and all branches of the US armed forces are offering
big bucks these days - in some cases, up to $50,000 for college.
For more information on military money, check out their Recruiting
Where should you not look for help? Don’t work with
anyone who wants money to help you find aid. Legitimate help
in finding college financial aid is free. Any help you have
to pay for is, at best, a list of things you could have found
on your own. At worst, it’s a blatant scam.
Fill out the free application for federal student aid (FAFSA)
as soon as you and your parents have filled out your taxes
for the previous year. Our tip, do your taxes as soon as you
get all of the necessary W-2s and other forms. Do it in January,
if possible. Government money is distributed on a first-come,
first-serve basis, and there is little or nothing left at
the end of August.
There are two ways to compare the cost of different schools.
One is to look at the simple price tag. Which school costs
less per year? The other is to ask which school will cost
you less per year. The answers might not be the same. More
expensive schools tend to have more aid available, and are
often much more willing and able to be creative in helping
you find the aid you need. Scholarships, grant packages, and
athletic offers could bring the price of an expensive private
school below the cost of a public school.
Award letters are usually sent out in April. Sit down and
compare all the award letters you get. Remember that not all
aid money is equally valuable. Grants, scholarships, and tuition
discounts are better than loans, simply because you have to
repay a loan. And subsidized loans are better than unsubsidized
loans. On subsidized loans, the interest is paid for you while
you’re in school. The interest on an unsubsidized loan
starts mounting as soon as you get the loan. Use this Nellie
Mae Calculator to compare award letters and get an
idea of the actual cost to you for each school you’re
If you can’t get all the money you need from the government
or the school, you’ll need to look for alternative finance
sources. Parents can borrow the complete cost of college (minus
any financial aid you receive) in the PLUS program (Parents’
Loans for Undergraduate Students). The interest rate for PLUS
loans is capped at 9 percent. Repayment usually starts 90
days after the money is disbursed.
Home equity loans and loans from retirement accounts can
help, too, and may be a better deal. Talk to your credit union
about loan options and opportunities. They’ll help you
sort out your loan options and find the one that’s best
And, believe it or not, it’s not too late to invest
for college. Use FigureWiz
to see what the money you set aside now can turn into by the
time you need it for school. Talk to your credit union about
the best ways to save money, too.
Sorting out your financial aid options and needs can be a
hassle, it’s true. But remember (and keep reminding
your parents as they struggle through the paperwork) that
an education is an investment. In fact, it’s one of
the best investments you will ever make. The effort will be
worth it in the end: that cap and gown is going to look really
good on you!!