January 15, 2001
This is the time of year when college-bound students should be applying to the schools they want to attend next year and tying down the financial aid they'll need. It can be a confusing and intimidating process and it leaves families vulnerable to scams that charge high fees for finding financial aid information that is readily available through high school guidance counselors and numerous Web sites.
There is plenty of money available, so there is no need to resort to credit cards, home equity loans or other expensive, dangerous sources of credit. Affordable money for college comes from:
- Families Families are expected to contribute a fair amount, determined by a formula that applies equally to everyone.
- Scholarships Scholarships come from a dazzling array of sources -- everything from the federal government to the foundation your grandparents set up to educate their friends and family members. Scholarships often are academically-oriented -- meaning they go to students with higher grades or aptitudes or those interested in a specific discipline.
- Federal and state aid Administered by the universities, federal and state funds are awarded on a basis of need. Generally speaking, most student financial aid is not based on grades but rather on the gap that exists between the cost of college and the funding from other sources.
- Student loans Some would lump this under the category above. State and federal governments underwrite the cost of borrowing money to attend college, so this is also a form of financial aid. It is a great tool when used wisely.
The first step is to apply to the colleges of your choice. The next is to complete your federal income tax return and then fill out the Free Application for Federal Student Aid -- or FAFSA. (You need the figures from the tax return to complete the FAFSA. You don't have to file the return yet but your should complete it if at all possible.) The amount of aid you qualify for is based on several factors, including family income and the cost of attending a specific institution. It's important to file this form as soon as possible.
Besides a variety of federal programs, each state offers financial aid. As you might expect, deadlines vary widely but it's important to apply as early as possible. Reason: Most programs have limited funds and they're allocated on a first-come, first-served basis. The same is true of private schools and the thousands of privately-administered scholarship and aid programs.
When all else fails, student loans can fill the gap. Despite what car salesmen and Realtors tell you, credit should always be used sparingly. However, student loans are a legitimate use of credit and should not be overlooked.
The FAFSA is the key to every form of student financial aid. Fill it out as soon as possible and be sure to keep copies. You'll need them.
Remember, the process is not just for freshmen. Students must apply each year to get the aid they'll need the next year. Now is the time to apply for the academic year that begins in the Fall of 2001.
Below are some Web sites that can save a lot of time and trouble. (Editor's note: These listings are not paid advertisements and we have no financial or business connection of any kind with any of the sites listed. These listings are based solely on our evaluation of whether the sites provide worthwhile information.)
- U.S. Department of Education Student Financial Asisstance You'll find everything you need to learn about and apply for federal aid on this site, including an online version of FAFSA.
- WiredScholar.com Affiliated with SallieMae, this site covers much more than financial aid. It will guide you through the entire process of selecting a school, applying, getting the financial aid you need and coming up with a realistic plan for paying back your student loans.
- Embark.com Similar to WiredScholar, Embark takes you through the entire process. It has a number of very useful calculators that help you determine how much a given school will cost, how much aid you should qualify for and whether or not you can afford a particular school.
- CollegeQuest.com Operated by the National Association of Student Financial Aid Administrators, this is another good source of resources. It has application information for more than 1,200 schools.
- The Scholarship Page An awesome collection of information about scholarships available in specific areas of study.
That's it. The information's there. There are thousands of schools, catering to every niche. Now's the time to get started. See our timeline to be sure you don't miss anything.
