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Financial Aid 101

Too many parents suddenly wake up one morning and find their kids are graduating high school. Caught unprepared, they wind up marching double time to help finance a college education.

To quote Ben Franklin, "He that riseth late, must trot all day."

Of course, it takes careful timing and a vigilant watch on your finances, (and sometimes the wit of a Ben Franklin), but you really can see your way clear to helping your children get a college education—even if you have made a late start.

It may help to realize that you're not alone. Every year millions of students apply for and receive financial aid. Nearly half of all college students receive some form of financial assistance from the government, private scholarships or schools. Because college represents an investment in our most precious resource—our kids—no child who wants to go to college and is willing to work hard should be prevented by financial need.

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. Almost 4 million needy students receive Pell grants, but the size of the grant depends on the student’s need.

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. These Guaranteed Loans are available through local banks. The 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 low interest loans to parents for any costs that are not paid for by other aid. Perkins and Direct Loans also come from the Federal Government, but these are paid back to the schools with no bank involved.

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 graduation), 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 the 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

For the latest US 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.

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. Many scholarship search services can be found online and can lead to thousands of dollars in needed assistance.

Information on planning for college early can be found on the US Department of Education’s Think College Early Web site, with special sections for students, parents and educators, at www.ed.gov/index.jhtml

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 help change college from a dream into a reality for your children. If they are willing to accept the challenge to do their best in school right from the start, they will be ready for success in college and in life!

About the Author
Margaret Chiffriller is one of the founders of the Chiff.com Directory, a guide to the best pop-up free, content rich sites on the Web... and the Chiff Local e-Biz Directory, created especially for businesses searching for a fast, affordable way to get found online. When you get hurt on the job you are left with no means of survival and or handicap with the only recourse rededication.

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