Families are not alone in paying the costs of college: every year millions of students apply for and receive financial aid and almost half of all students who go to college receive some kind of financial aid. Because college represents an investment in our most precious resource - our children - no child who wants to go to college and is willing to work hard should be prevented by financial need. Here's what to do:
- Start saving early. Saving money is the best way to prepare for meeting the costs of college. Set aside money each month, starting now, to build a college fund. Think about where your child might attend college, how much that type of college might cost, and how much you can afford to save. The earlier you and your child begin saving, the smaller the amount you will have to set aside each month.
- Apply for financial aid. All needy students can apply for federal, state and other student financial aid to help them pay for college. The two major types of aid are grants or scholarships, which do not have to be repaid, and loans, which are available to students and parents and, like a car loan or a mortgage, must eventually be repaid.
Where Can You Apply for Financial Aid?
The federal government supplies $46 billion annually in student aid, about 75 percent of all student aid.
- Pell Grants are the most important form of student financial aid for the nation?s neediest students. In 1999-2000, almost 4 million needy students received Pell grants. The size of the grant depends on the student?s need. In 2000-2001, the maximum grant will be $3,300.
- The Work-Study Program lets students work during the summer or part-time during the school year to help pay for college. Colleges help find jobs for students, and the federal government helps pay the salary. Work-Study jobs give students valuable work experience and are often related to the student?s classes or future career?in addition to helping pay the costs of college. The new additions to the Work-Study program, the America Reads Challenge and America Counts, let students work as reading and math tutors for young children?helping students give back to the community and pay for college.
- Federal Loans are available to both students and parents. Stafford Loans for students are either subsidized, for needy students, where some of the accumulated interest is paid by the government, or unsubsidized, where the student pays all of the accumulated interest. PLUS Loans are loans to parents for any costs that are not paid for by other aid.
A quick word about student loans
Students usually do not have to start repaying their loans until after they finish school, and the interest rate is usually lower than for other kinds of loans. Many students are hesitant to take out loans, but remember: college graduates usually make a good deal more money than people who do not have a college education, so paying a loan after graduation will be easier than it might seem. Nevertheless, it is important that both students and parents understand the terms of the loan before agreeing to them and know when repayment will begin and how much their payments will be. There are many different education loans, so before taking out any loan, be sure to find out what the exact conditions of the loan are.
Other Forms of Aid Include:
- Federal aid administered by colleges including Perkins Loans and Supplemental Educational Opportunity Grants (SEOGs)?the U.S. Department of Education gives aid to colleges, who decide which of their students need it most.
- HOPE Scholarships, Lifetime Learning tax credits, and other tax benefits for higher education?The HOPE Scholarship tax credit provides a maximum of $1,500 (100 percent of the first $1,000 of tuition and required fees, and a 50 percent credit on the second $1,000) for each of the first two years of college. The Lifetime Learning tax credit provides a maximum $1,000 tax credit to help college juniors and seniors and graduate and professional degree students, as well as adults who want to go back to school. For detailed information on who is eligible for these and other tax benefits, it?s best to refer to your Internal Revenue Service (IRS) forms and publications which are available at www.irs.gov.
- Many states and colleges offer financial assistance directly to individual students based on need or merit. Merit-based aid, usually scholarships or grants, is given to students who meet requirements not related to financial needs?like doing well in high school or displaying artistic or athletic talent. A notable example of state aid is the Georgia HOPE Scholarship, which guarantees students free college as long as they have earned a B average and stayed off of drugs. Call or write your state?s higher education agency or college financial aid offices to request information about these opportunities.
- Other Assistance. Organizations, foundations and other groups offer scholarships to academically promising students, minorities, women and disabled students. To learn more about these scholarships, speak with your school guidance counselor or go to the reference section of the public library.
- Serve Your Country. Many opportunities exist for students to pay for all or part of a college education by serving their country during or after their college years. Service in Americorps, the Merchant Marine Academy, the country?s domestic Peace Corps or in the Reserve Officer Training Corps (ROTC) entitles students to scholarships of varying amounts to cover educational expenses. The U.S. Army, Navy and Air Force each has its own military academy (a four-year college and a commission in the military after gradua-tion), where tuition is free, but only the most highly qualified students are admitted. Local armed forces recruiting offices can provide more information. Call 1-800-94-ACORPS for more information about Americorps?a way to serve your community and pay for college.
More Information on Federal Aid
For the most up-to-date information about student aid supplied by the U.S. Department of Education, call the Federal Student Financial Aid Information Center at the U.S. Department of Education toll-free at 1-800-4FED-AID. You can also get a copy of the federal financial aid form, which is required to apply for all federal financial aid, by calling this number. You can also obtain the guide to federal financial aid for students, called The Student Guide, which provides an extensive and annually updated discussion of all federal student aid programs. You can obtain the Guide by writing to the following address:
Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044
To apply for other aid in addition to federal aid, you may need additional forms. High school guidance counselors can tell you more about applying for financial aid, including where to get forms you might need for state aid. College financial aid offices can also be of help to you.
More Information on Other Topics Discussed in This Handbook
For the latest Department of Education publications on topics related to college-going, call 1-877-4ED-PUBS toll-free or visit www.ed.gov/about/ordering.jsp.
Information on planning for college early can be found on the Department of Education?s Think College Early Web site, with special sections for students, parents and educators, at www.ed.gov/offices/OPE/thinkcollege/early/.
A Final Note
A college education is a major ingredient for success in the world today?and by taking the right courses and working hard your child can be prepared to go to college. Building a strong foundation of high-level classes, starting with algebra I and geometry by the eighth and ninth grades, and continuing to take rigorous courses through high school will better prepare students for college admissions tests and college course work. By saving for college and taking advantage of financial aid from the U.S. Department of Education, colleges and states, you can change college from a dream into a reality for your children if they are willing to take the challenge to do their best in school from the start.
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