By W D Adkins
How to Finance College
Many college students finance their education by working a campus job, but there are other options including federal loans, university grants, and even military service.
By W D Adkins
OverviewA good education is widely known to be one of the best ways of getting better jobs and earning more money. College can be expensive so you need to plan and prepare ahead of time. Even with a good college savings program, most people need at least some financial aid to pay for college. As of 2009 Federal Student Aid processed 14 million applications each year. Fortunately, there are a lot of options and there’s no rule that says you can’t use all of them.Step 1Save for college using a tax-sheltered account. Under IRS guidelines you can save money using a 529 plan or Coverdell Education Savings Account. Paying qualified higher education expenses such as tuition using money withdrawn from Roth or traditional IRAs is allowed with no tax penalty. Each type of account has different rules, but they fall into two categories. Some offer up-front tax deductions for money invested. Others do not, but investment earnings are tax free when withdrawn to pay college expenses.Step 2Apply for federal student aid. Go to the FAFSA (Free Application for Federal Student Aid) website, create an account, and fill out the online form (see link below). You need your (and probably your parents) Social Security number and driver’s license number, along with your alien registration number if you are not a US citizen. You’ll be asked for information on income, assets like savings and stocks and bank account balances. You designate which colleges/universities you wish the FAFSA report sent to. Each school’s financial aid office processes the report and notifies you of the award(s) you are eligible for. These may be subsidized loans (no interest accumulates while you are in school) or unsubsidized (interest des accumulate). You will not have to make any loan payments as long as you remain in school.Step 3Select grants whenever possible. In addition to loans, Federal Student Aid awards several types of grants under programs like Pell and TEACH. A Pell grant is money awarded based on financial need but with no special academic performance requirement. To qualify for a TEACH grant you must agree to work as a teacher for 4 years within the 8 years following graduation, normally in a low income area teaching subjects where there is a shortage of teachers. You are required to maintain a 2.75 grade point average for TEACH. When you fill out a FAFSA, you automatically apply for grants as well as loans. If you do receive a grant award, always take it over a loan for the simple reason that you do not have to repay grant money.Step 4Take advantage of state-sponsored scholarship programs such as Georgia’s HOPE scholarships. Several states have programs similar to HOPE. State residents who maintain a good academic record (usually a 3.0 (B) average) are eligible for free tuition and assistance with other academic expenses at in-state colleges and universities. Check with your school or state Department of Education to see what programs are offered.Step 5Apply for school-related work. One way to do this is by indicating you want a “work/study” position on the FAFSA application. However, you can also apply for student assistant jobs and internships at the school you attend. Another option is a co-op program. These are special programs in which you attend school for a semester and alternate with working in a job related to your major the next semester. Alternatively, you may be able to work part-time and go to school part-time.Step 6Search for scholarships and grants offered through your college or by non-academic organizations. There are many foundations and non-profit organizations that offer grants and scholarships. Examples include the National Education Association, United Negro College Fund, and American Foundation for the Blind. Most colleges have a resource center where you can search for scholarships you may qualify for.Step 7Check about tuition benefits with your employer if you are a non-traditional student (not entering college straight from high school). Private employers may be willing to pay all or part of the cost of college especially if your course of study is related to your work. Government agencies frequently offer tuition reimbursement as a job benefit. Serving in the military or programs like AmeriCorps will earn you education credits worth thousands of dollars. Another way to finance college through military service is by joining the ROTC (Reserve Officers Training Corps). Students must meet strict physical standards and maintain a 2.5 GPA, but ROTC scholarships pay the full cost of tuition and fees plus a stipend. In exchange you must serve 4 years on active duty or 8 years in the Reserves or National Guard.Step 8Some college hopefuls may not qualify for or exhaust their eligibility for federal loans or other financial aid. There are still some options available to you. You can apply for a private student loan. For example, Sallie Mae offers student loans (under the name Smart Option) with interest-only payments at low rates while you are in school as long as you meet their credit standards. Finally, some people may have to work full time, particularly if they are older and have families to support. In such circumstances, you can take advantage of low-cost options like the community colleges mentioned above and finance college as a part-time student out of your earnings combined with any student loans, grants and scholarships you qualify for.skill4ingredientCompleted FAFSA applicationingredientsCompleted FAFSA applicationtipThe deadline for FAFSA applications is the last day of the award year, which runs from July 1 to June 30. Thus the deadline for the 2009/10 award year is midnight June 30, 2010. However, colleges usually have earlier deadlines so check with schools you are interested in to make sure you meet their deadlines.
One way of affording college is to take advantage of low-cost options like academic community colleges. Many offer excellent classes covering the first two years of college, credits can be transferred, and they cost far less than most 4-year universities.tipsThe deadline for FAFSA applications is the last day of the award year, which runs from July 1 to June 30. Thus the deadline for the 2009/10 award year is midnight June 30, 2010. However, colleges usually have earlier deadlines so check with schools you are interested in to make sure you meet their deadlines.tipsOne way of affording college is to take advantage of low-cost options like academic community colleges. Many offer excellent classes covering the first two years of college, credits can be transferred, and they cost far less than most 4-year universities.keywordfinance save college school university higher education post-secondary loan grant scholarship FAFSAkeywordsfinancekeywordssavekeywordscollegekeywordsschoolkeywordsuniversitykeywordshigherkeywordseducationkeywordspost-secondarykeywordsloankeywordsgrantkeywordsscholarshipkeywordsFAFSAResourcesreferenceIRAs (IRS Publication 590)referenceStudents.govreferenceIntroduction to ESAsresourceFAFSA Application OnlineresourceHOPE Scholarsip ProgramresourceCollegescholarships.org
© Copyright 2009. All Rights Reserved.