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Paying for College: The Basics of Financial Aid

Jul 10, 2009

If you turn on your computer, television or radio you’ll be bombarded with news of the recent economic collapse and the stories about its casualties. As many families brace against foreclosures, high interest rates and job loss, many struggle to make ends meet, no less finance a child entering college. Only in previous decades has college attendance become a large cultural expectation for young generations, what was once only for the sons of the well-off becoming an open field for people of all backgrounds and inheritances. But even though attendance has increased dramatically, often the price tags that colleges boast remain the same. Even without the pressures of economic turmoil most families dread the notion of paying for college,
A number of options exist for these families, and are important to consider when selecting future colleges. By anticipating financial needs and the ways they can best be met, future students can often rack up less debt or realize that their expensive top choice school might cater to their needs just as well as a cheaper state school.
One of the first options (for U.S. citizens) is to apply for federal aid. One of the requirements to receive federal aid is either a high school diploma or a GED, and no history of drug convictions. The FAFSA (Free Application for Federal Student Aid) takes into account your parents salaries, the number of siblings you have, and other financial aspects of your life in order to determine your eligibility for aid. Another element that the FAFSA considers is the cost of tuition at the college you’ll be attending. For more information about federal aid, as well as the FAFSA, go to http://www.fafsa.ed.gov/index.htm.
Beyond federal aid is that awarded by colleges or private organizations. And when it comes to that, there are two types, need-based and merit-based. Merit-based financial aid often comes in the form of scholarships or other earned financial assistance related to excelling in a given area. In order to try to earn merit-based aid students should take advantage of any scholarship opportunities that present themselves, remembering that even ‘small’ prizes which might be only a few thousand dollars are often overlooked by students even though they could use that money to purchase a years worth of books and meals. Certain scholarships have an entrance fee, but there are a number of ones which are free to apply to, and whether or not you choose to pay for the opportunity to receive it depends on you. Students should be advised to research any organizations that offer merit-based aid before paying though, as in recent years many scams have been created using the guise of possible scholarship money. Certain colleges have merit-based financial aid or benefits, which are often sponsored by alumni. For instance, certain schools have been known to reward small amounts of money to any students whose parents attended the same college, and other such perks. Generally any information related to this can be found on the school’s website, and while the benefits might not be enormous, when it comes to paying for college, every bit helps.
Need-based aid is rewarded differently depending on each college. Certain colleges consider a students academic record when considering how much to award them, while others simply look at their financial situation. Even then, certain schools consider family debt, while others look mainly at annual income. Because of this, extensive research is necessary when trying to figure out the amount and type of aid a college might reward you. In recent years, many Ivy League schools have begun paying for all of the tuition that students cannot make up. Other colleges also do this in regards to the amount that a student would have been able to receive from a student loan. These programs might not continue due to current economic issues, but for the time being it definitely assists in navigating a way to leave college without enormous amounts of debt. Even if that level of assistance can’t be supported by your school, many colleges offer part-time jobs that decrease tuition costs, or other such tasks which can assist in offsetting costs.
Most students entering college often also need student loans to offset what money they didn’t manage to get in aid, scholarships, or savings. The amount of money that you are approved to borrow depends on many aspects, but a general rule of thumb is to consider how much you need, not how much more they’re willing to give you. By accepting more money than you need you increase future debt unnecessarily, and by the time you manage to pay it all off the interest that that amount has collected will have cost you far more than it was worth.
Ultimately, paying for college is a highly personalized ordeal which depends on your family’s situation, and the school which you choose to attend. By researching your future school’s policies as well as applying to scholarships available to you, you should be able to find ways to at least slightly minimize future financial discomfort.

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