Making College Affordable

About half of students who attend college receive some type of financial aid. The number one supplier of financial aid is the United States government, lending or granting $35-40 billion dollars per year to students. A combination of some or all of the following opportunities may be the best way to make your education affordable.

Financial Aid comes in two basic forms. First, grants or scholarships are programs where money for college is given directly to you, the student, or to the college on your behalf. This money does not have to be repaid. Second, you and/or your family may take out a loan to pay college costs--this money must be repaid.

Scholarships and grants are constantly changing. Some scholarships are offered every year, some only once, and new ones frequently become available. Every college has scholarship and grant programs available to its students. To determine what may be available, you and your family should contact the colleges directly. There are also thousands of national scholarships and grants available. Many colleges offer academic or athletic scholarships to students. These can be very difficult to get, and at this point in your education you should not count on such scholarships to pay for college. Pell Grants are difficult to get and are limited in number.

These funds are for the families and students with greatest financial need. In the meantime, develop your special talents in academics, sports, music and so on, because it will be helpful for your future scholarship applications. Full scholarships to colleges are difficult to get and there are few available. To ensure you have the ability to attend college in the future it is wise to investigate what scholarships may be available, but plan on paying for college either through savings or other financial aid. Should you be fortunate to receive a scholarship in the future--congratulations! If not, there will still be many options to help you pay for college.

Service Scholarships like those offered by the Peace Corps and Reserve Officer Training Corps (ROTC) offer financial assistance to many students throughout the country. These programs are a combination of scholarships and loans. Instead of repaying the money with interest like you would with a loan, the student is required to serve in the Peace Corps or the military for a certain number of years after graduation. If you are interested in these programs, contact them early to find out what academic and other requirements they may have.

Tax Credits and Tax-Free Savings programs. Besides direct financial aid programs the federal government also assists families with children enrolled in college by lowering their taxes. Tax credits, for those who qualify, currently assist families with children in college by lowering their taxes up to $1,000 per year. The federal government allows qualified families invest up to $500 per year into Educational IRAs. The interest earned on these accounts is tax free if used for education beyond high school. Almost every bank and financial institution can assist you with opening an Educational IRA.

Work Study programs allow students who qualify for financial aid, to work at jobs on campus or in the local community part time during the school year or during the summer to assist in paying college costs.

Student Loans come in various types, some with government backing, others through colleges or financial institutions. Like scholarships and grants, these programs are constantly changing. The loans discussed here are funded by the government, and you may apply for them through financial institutions, colleges or directly through the government. As you approach college enrollment, make sure you and your family contact college counselors, college financial aid directors, and other resources to ensure you are aware of any changes made in financial aid requirements and programs. More realistically, potential college students and their families who will need financial assistance for college should expect to get some type of loan to pay for college costs.

Depending on the financial needs of your family, different types of loans exist to assist in paying college costs. Here is a partial list of some of the different loans available.

Stafford Loans are the most common form of college financial aid. These loans are made directly to the student. Typically repayment of the loans does not begin until six months after the student finishes classes. In the case of those who exhibit the greatest financial need, some of the interest on the loans may be subsidized, easing the repayment of the loan in the future.

PLUS Loans are made to parents to assist in college costs that may not be fully covered by other grants, scholarships or student loans.

Every college has a financial aid office where they can help answer questions you may have about college costs and how you might pay for college. It is never too early to contact colleges about your future plans so that you will be financially prepared to attend college.