Educational Grants

The Problem: Rising Costs of college education

You have done everything you’re supposed to do.  From the moment you knew you were about to have a child, until the day they walked across the stage to shake the hand of the principal at their high school graduation, you have set money aside for your child’s college education.   What happens when you realize that it isn’t enough?

With the global increase in post-secondary education tuition, more and more parents and students are finding themselves in the exact same situation.  It has become quite a challenge to keep up with the rising costs.

All is not as grim as it seems, there are various options out there for those who are finding themselves in this very predicament.

Traditional Avenues: Free Application for Student Aid, “FAFSA”

Most people begin the scramble for college financing with researching government grants.  The federal government makes it quite easy for you, providing an application that covers all government grants and loans.  This application is called the Free Application for Federal Student Aid, or as it is most often known as “FAFSA.”

Filling out the FAFSA form can seem a little daunting at first, but if you are prepared with all of the information needed, it’s simply a matter of transferring that information onto your application.  FAFSA asks for the following information:

• Your Drivers License
• Your Social Security Card
• Your W-2 forms from the most recently completed tax year, and any other proof of income.
• Your most recent Federal Income Tax Return and that of your spouse, or your parents, depending on your situation.  If you are married your spouse must provide their information, and if you are a dependent student, your parents must provide theirs.
• Your most recent untaxed income documents.
• Your current bank statement and any investment information.
• If you are not a citizen of the United States, you will need to provide your alien registration card, or your permanent resident card.

As long as you have these documents available, you should have no trouble filling out the FAFSA form.

FAFSA has also graciously provided a planning worksheet so that you can compile all of the information into one document, which you can have at your side while filling out the FAFSA online.

There is also a way for an applicant to report any unusual circumstances that may not be reflected on their student aid application.  You are able to contact the financial aid office of your chosen college.  They will most likely ask you to provide documentation regarding the unusual circumstances for consideration. Unusual circumstances may be something along the lines of large medical bills or recent unemployment.

Once you have completed your application, it usually takes around three to five working days before you receive a notification via email stating your Student Report, or “SAR,” is ready.  The SAR contains a very important number called the Expected Family Contribution; do not panic when you see this number.  This isn’t the amount of money your family will be expected to pay, it’s simply a figure used by your college’s financial aid department to help them better assess the type of aid you are eligible for.

If you should need further assistance filling out or deciphering the Free Application for Federal Student Aid, or “FAFSA,” the United States Department of Education’s FAFSA website has a help section that can answer many common questions.

Traditional Avenues: Loans

Grants are not the only source provided by the Federal Government.  Loans are also available to those that meet the requirements.

Stafford loans are provided through the William D. Ford Federal Direct Loan Program and are considered to be low interest loans.  They are available in two different types; the Direct Subsidized Loan and the Direct Unsubsidized Loan.  The type of loan a student receives is based upon their personal circumstances

The Direct Subsidized Loan, if the student qualifies, does not require any payment to begin on the loan until after graduation or in the event the student leaves school, and no interest is accrued during the time the student is still enrolled.  In order to be eligible for this type of loan, a student must demonstrate a certain degree of financial need.

The Direct Unsubsidized Loan is offered to any student and has no financial need requirements.  The difference in this loan is that the student will accrue interest during the time they are in school.  While it is recommended that the student begin making interest payments on this loan while they are enrolled, it is not a requirement.  However, keep in mind the interest will continue accrue and compound and will result in higher payments should the student decide to wait to begin paying until the conclusion of their education.

Stafford loan amounts only cover a fraction of the costs involved in a four-year degree program, but the government has another solution available called the PLUS Loan.  PLUS loans are available to either the parents of the prospective student or to the student themselves.

The eligible amount for these loans depends entirely upon the completed financial aid package of the student.  The parent or the student is eligible for the total cost of the tuition; minus any financial aid the student has already been awarded.  For instance, if the tuition for one year costs $20,000 and the student received $5,000 in award money, the PLUS loan could be up to $15,000.

For more detailed information about these federal government options, and other topics regarding education, please visit The United States Department of Education or the FAFSA website.

Traditional Avenues: Scholarships

Scholarships are monies that are generally offered to a student who has successfully been chosen via a selection process deemed by the institution donating the funds.  Scholarships can be provided by businesses, educational institutions, individuals and not-for-profit entities.

Currently, there are no government funded scholarships.  There is, however, an abundance of information out there on the World Wide Web that can point you in the right direction.  There is no need to spend money on a “scholarship search expert” when there are so many free resources available.

One of the major online scholarship databases is called FastWeb.com.  Fastweb is very informative and extremely easy to use.  Although the advertising pop-ups can be a little annoying at times, it is worth wading through them to get to this vital source of scholarship information.

The site takes the student through a rather involved questionnaire in order to get a snapshot of the types of scholarships that the student would be eligible for.  Questions regarding the student’s hobbies, their nationality and even the history of their ancestors can lead to lucrative untapped resources.

The student will find scholarships as crazy as Stuck at Prom Duck Brand Duck Tape Scholarship, which requires that the students create their prom attire completely out of duct tape and send in photos to be judged; or traditional essay based scholarships such as the Atlas Shrugged scholarship which has been around for quite a while, and just about everything in between.

Another valuable online search tool is Scholarships.com.  Scholarships.com’s registration process is very similar to that of Fastweb, however, the results are not always the same.  There may be some scholarships that are listed on one site, that are not listed on another.  Therefore it may be useful to register with several sites in order to receive the most information.

Non-Traditional Financing Tactics

Savings programs such as UPromise are an effortless way to save a little at a time without even having to think about it.  It is as easy as registering a credit card or cards with the company, using it, and watching the savings accumulate in the UPromise account.

How it works, is there are certain companies that will pay into the UPromise account each time one of their products is purchased by the account holder.  It really is a simple as that.  It isn’t a lot at any one time, but over the course of years it can really add up.  When you think about it, any additional cash is always helpful.

The least desirable option for a student who is in need of money for college, is to work while attending school, however, it is often necessary.   This can complicate matters greatly if the student is unable to juggle the responsibilities of both job and school. But, like any decision, it’s a matter of weighing the options.

Deciding whether holding down a job will have a negative effect on their studies is one consideration.  Another matter to take into consideration would be the effects on award money, should the student need to drop down to part-time status.

Overall it’s a delicate situation to balance and would be best resolved by not having to be put into that situation at all.

That is where financial planning comes in; using the financial tools and awards given by the government and other outside agencies and entities, combined with effective long term planning, is the best way to go about financing a college education.