Options to Help You Get Over... College $ticker $hock
By Lee Nelson
It is one of the most overwhelming situations a family can face – the challenge of paying for college. Just thinking about paying for tuition, room and board, books, lab fees, transportation back and forth to home, clothing and incidentals can make a grown man cry.
But don’t fret. Help is everywhere, and there are several options for students and their parents to cover the cost of college, no matter what kind of financial condition their bank accounts reveal.
Scott Anderson has been helping families with their questions and concerns about college costs for years as owner and president of College Financial Strategies in Davenport, Iowa. “Eighty percent of the people out there haven’t saved enough money for college. I got the idea to start this business when I was in general finance work. Clients always asked me what they should do because their son or daughter was getting ready to go to college.”
He works with people who live paycheck to paycheck and those with $500,000 in the bank. The best time to start working with clients is in January of the student’s junior year in high school. Some come in even earlier. Anderson helps them rearrange money and makes sure the money they have saved and accumulated are in the best places possible.
His services cost from $395 to $695. He believes the key to some people affording a great college is choosing the ones with the most generous histories.
“In the Midwest, we have a tremendous amount of schools that are very, very generous with financial aid. Some of the private ones divvy up a lot of money.”
He also has seen situations where a student who has worked and saved a lot of money, or who receives a lot of academic scholarships gets penalized with the college’s financial aid packages. The schools are less generous when the child has a big bank account rather than if the parents have assets. Sometimes, colleges give less of their own money when the student has worked hard for scholarships or with a part-time job. It’s sad, but reality, he said.
To put the cost in perspective and demonstrate why the investment is important, think about this – college graduates will earn an average of $2.5 million or about $1 million more over their working lives than high school graduates, according to the U.S. Census Bureau.
For 34 years, Julie Ekstrand has helped students and their parents figure out the confusing forms and timelines that surround the mystery behind college financial aid.
“The financial aid forms cannot be filled out until the January of the senior year,” said the head counselor at Davenport North High School.
She emphasizes that everyone should fill out that one free form called the FAFSA (Free Application for Federal Student Aid). It’s available online at www.fafsa.ed.gov, or in any high school guidance counselor’s office. The deadlines for particular states are listed on that government web site.
The federal deadline for the 2006-07 school year must be made on the web site by midnight Central Daylight time on July 2, 2007. Corrections on the web forms must be submitted by Sept. 17, 2007.
The form is sent to the three schools of the student’s choice. After that, the student pays a fee to have it sent to any other schools. It is income-based, and both the student and parents must report all of their income.
Anderson stresses that even if a student is anticipating an athletic scholarship, he or she still has to fill out the federal aid form. And the earlier the form is filled out, the better. Some schools run out of financial aid at a certain point in the year. So, first-come, first-serve becomes an important lesson.
“In a student’s senior year, his or her school counselor better be their best friend,” Anderson said. “A lot of this is very overwhelming, especially the forms. But if you break it down into pieces and fill out one or two at a time, it’s not so bad.”
(I THOUGHT IT WAS ANDERSON, THE COLLEGE FINANCIAL STRATEGIES GUY, TALKING – SO IT WOULDN’T BE “HER SCHOOL”). Many high schools across the Midwest offers many, many scholarships to the students. Some scholarships include full-ride tuition and room and board. Sometimes, it’s a matter of the right grades, ambition or future goals to apply. Students should check with their counselor about local and national scholarships available. Athletic scholarships can also be given out by Division I and II colleges.
The major source of student financial aid is the U.S. Department of Education. About 70 percent of the student aid awarded each year comes from the department’s grants, loans and work-study programs.
If loans are going to be a part of the plan, the cost for getting them has gone up from last year. In July, rates on new federal loans for students and parents went from up 1.5 to 2.4 points and will be fixed instead of variable. That can mean rates will be 6.8 percent. Having the student borrow the money in their name first is cheaper than the parents taking out the money themselves.
Most students do qualify for some sort of government loan, which can be a reduced rate or a full rate. Banks, credit unions and other private lenders also give low-interest college loans to those who don’t qualify for assistance anywhere else.
Some students get their financial help for college by joining the military or their high school’s ROTC program. Check out those possibilities through local recruiters.
On-campus and off-campus jobs can also help take the sting out of college bills. But find them early or talk to college staff before getting to school to check into possibly leads.
And remember that May 1 is the date by which students should notify colleges where they will enroll in the fall.