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College Bound

Look Everywhere
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 at The 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 and Peterson’s.

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 Web Site.

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.

Start Early
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.

Compare Offers
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 considering.

Fill in the gaps
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 for you.

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!!