Saving and Reducing College Costs:
1. Save as much money as you can for your college education. The more money you have saved, the less you will need to borrow in student loans for college.
2. A 529 education savings plan is one way to start saving for college. A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs.
3. An ESA (Coverdell Education Savings Account) is another financial vehicle to help parents save for college. An ESA allows you to make an annual non-deductible contribution to a designated investment trust account. Your contribution will grow free of federal income taxes, and withdrawals from the account will be completely tax-free as well (certain requirements apply).
4. Utilize The FAFSA4caster. This free tool provides students with an early estimate of their eligibility for federal Financial Aid for College (including grants) and can reduce the time it will take to complete FAFSA. This will help give you a clearer picture of what college will cost. You can find this tool at www.fafsa4caster.ed.gov.
5. Consider taking a “gap-year” before starting college. This may not be an option for everyone, but utilizing one year after high school graduation for full-time work and saving for college, could really help decrease the amount of money you would need to borrow in student loans.
6. Some companies will offer tuition assistance to the children of their employees. Parents should speak with the appropriate personnel within their companies to see if such programs exist.
7. Consider reducing your college costs by attending a community college for a few years before transferring to a state or private school. Tuition at community colleges and 2-year schools is significantly less money in comparison to a private or 4-year college.
8. Many community colleges offer special “transfer programs” to local 4-year universities and colleges. Within these types of programs, if you can maintain a certain GPA you will gain automatic acceptance to the 4-year schools they work with upon the 3rd year, with your first 2 years of college completed at a reduced cost.
9. Consider reducing your college tuition by attending an in-state university. State colleges or universities will charge less to its residents.
10. Consider reducing your college costs by attending a public university or college instead of a private college. Private college tuition will typically cost more in comparison to a state university or college.
11. The Advanced Placement Program (APP) offers college level courses at high schools across the United States and Canada. Taking Advanced Placement examinations can earn you college credit at a fraction of the cost.
12. The Provenience Examination Program (PEP) allows students to take an examination in a particular subject in order to “test out” and receive college credit, reducing the amount of college credits you have to pay for.
13. The College-Level Examination Program (CLEP) gives you the opportunity to receive college credit for passing their $77 examinations. Compare that to the cost of a 3-credit college course!
14. Some colleges and universities offer tuition reduction plans to qualifying students. Tuition reduction plans / discounts may be offered to: children of alumni, students who have family members employed by the college, students who have other family members attending the school, students who work at the school or are involved in certain organizations within the school. Ask your schools financial aid office if they offer such programs, and if you qualify.
15. Does your college or university offer special tuition rates or provide special funding based on personal circumstances? Some schools have funding set aside for those who do not qualify for federal or state financial aid and/or offer discounted tuition rates to families whose majority wage earner is unemployed.
16. Does your college have a program to offer free room and board in exchange for campus work hours? Believe it or not, many colleges have these types of programs.
17. Does you college offer an accelerated degree program for your major? If so, an accelerated degree program could get you through 4 years or college in only 3 years, saving you a full year of college costs.
18. Consider a College Work-Study Program. If you qualify, the campus employer may contribute 70 percent of an approved student’s financial subsidy and the federal government may provide the remaining 30 percent of the funding.
19. Consider Cooperative Education Programs. College co-op programs integrate work experience into the academic curriculum, so you can actually gain needed work experience in your field while earning your college degree. Unlike internships, co-ops are always paid positions and are not based upon financial need.
20. To reduce the amount you will need to borrow in student loans, plan to work at least a part-time job while attending college.
21. If you are currently employed full-time, check into tuition reimbursement programs through your employer.
22. ROTC or Reserve Officers Training Corps will pay all of your college tuition fees, textbook costs and provide a monthly living stipend in return for a service commitment after graduation.
23. Textbooks consume a large chunk of college costs. Student should consider buying used textbooks or renting textbooks to reduce these costs.
Free Money for College:
24. Free money funding options for college are the best funding options, because it is money for college that will not have to be repaid. In planning your Financial Aid for College, you should never skip applying for all the scholarships and grants you qualify for.
25. Be prepared to do some work. Finding and applying for college scholarships is not necessarily easy or fun, but if you are willing to put in the time and effort you may be able to drastically reduce the amount you will need to borrow in student loans.
26. Scholarships are not only academically based. Most college scholarships are awarded based on a combination of factors such as academic achievements, talents, race, gender, career selection/degree major, etc… Students should start by making a list of the attributes above; in order to help them search for scholarships they can qualify for.
27. When searching for scholarships it is best to start locally and then branch out to nationally awarded scholarships. You will have a better chance at receiving scholarships at a local level since there is less competition.
28. Do not only apply to scholarships that award large amounts. Full-ride scholarships are often heavily saturated with applicants, making your chances at obtaining that particular award very slim. Applying for college scholarships that offer smaller awards are typically less competitive, and winning 2 or 3 smaller scholarships can really add up.
29. Scholarships for college are offered to all levels of college students, all ages, and for all majors. Just because you didn’t think to apply for a college scholarship last year, doesn’t mean you can’t apply for one for the upcoming school year.
30. Religious organizations, community organizations and professional organizations you (or your parents) are affiliated with are all great places to start your search for college scholarships.
31. Community centers and local libraries are great resources to aid you in your college scholarship search. Often times you will also be able to utilize free resources and books at these locations as well.
32. Ask your employer about scholarships the company may offer. There are many employers (especially larger companies) who sponsor scholarships for college.
33. If you are attending an in-state college or university, check with the state education department for any scholarships they may offer to their residents.
34. Many colleges and universities offer scholarships specifically to their students only. Make certain to check with your college or university to see what scholarship programs they offer.
35. Utilizing the web or a free scholarship search service is a great way to locate college scholarships. A scholarship searching service will match you (or your child’s) qualifications and characteristics against the many scholarships in their database, making your search quick and easy.
36. Utilize a combination of scholarship search methods to yield the best results. Relying simply on the web alone may not provide you with all local, regional, and school specific scholarship opportunities.
37. To increase your chances of winning a scholarship, make certain you market yourself well, avoid grammatical / spelling mistakes, do not miss the deadline, do not omit required materials (i.e. transcript or recommendation letter) and do not fail to answer the essay question or complete all parts of the application.
38. Never Pay for Scholarship Information! If you are ever asked to pay fees for “exclusive” or “special” scholarship leads, you are most likely getting scammed.
39. If highly personal information (i.e. social security number, bank account number, etc…) is being requested on a scholarships application, this is likely a scam.
40. Grants are similar to scholarships, in that they will not have to be repaid (unless you are awarded incorrectly or fail to meet the grant requirements). Grants can be federal, state or privately funded. In order to maximize you chances at receiving grants for college, you should apply for grants in all 3 sectors.
41. If you file a FAFSA, you will automatically be considered for federally funded grants.
42. To apply for state funded grants, you will need to complete a FAFSA, and most likely submit a separate GPA verification form to the state grant commission. Visit your state’s official website for more information on their specific grant application guidelines.
43. For locating private grants, you will have to use the same methods you use when locating college scholarships. Identify your talents, special abilities and/or desired field of study, and begin searching for grants using those criteria.
44. Similar to scholarships, many colleges and universities offer special grants to students with certain talents or academic achievements. If you excel in a particular area such as music, science, art, etc… you should check with your college or university to see if they offer any grants in that area of study.
45. Education Tax Credits can also help with education costs. A great resource for Education Tax Credits can be found here: http://www.irs.gov/publications/p970/index.html
Federal Financial Aid for College:
46. File a FAFSA (Free Application for Federal Student Aid); this is perhaps the most important step in the college financial aid process. FAFSA is your gateway to federal Financial Aid for College.
47. Even if you assume (or have been told by family or friends) that you will not qualify for any federal financial aid, you should still file a FAFSA. The truth is, most students will qualify for some form of federal Financial Aid for College.
48. Apply as early as possible for FAFSA (Free Application for Federal Student Aid). FAFSA has a deadline of June 30th, but some schools require you file even earlier. Applying as early as you can for FAFSA will help ensure you get all the federal financial aid you are eligible for, since some federal aid is first come, first serve.
49. Applying for FAFSA early is the best way to go, but even if you do not file early, you MUST file before the deadline to receive federal Financial Aid for College.
50. Do not wait until you file your taxes to file FAFSA. If you have not filed your taxes yet, do not let that hold you back from applying for FAFSA. Applying as early as you can for FAFSA is key, if you have yet to file your taxes, you can still file FAFSA and make corrections later.
51. Make certain to have the needed documents at hand to help speed up the FAFSA filing process. You can find a checklist of these documents on the FAFSA website.
52. Submitting your FAFSA online if the fastest and most efficient way to file for federal Financial Aid for College. In order to file FAFSA online you will need a PIN (Personal Identification Number), which you can obtain from www.pin.ed.gov.
53. You only need to file one FAFSA regardless of how many colleges you are applying to. FAFSA will provide your financial information to up to 10 schools.
54. For some private schools you may need to file something called a PROFILE in addition to FAFSA. If you are applying to private colleges, you must contact their financial aid department and see if they require this.
55. Make certain all the information on your FAFSA form is accurate. You will not want to deal with delays in your FAFSA application process as a result of incorrect information.
56. Some colleges and universities may require additional information to be sent along with your FAFSA. It is highly important to know what each school requires when filing for federal financial aid, this will help avoid any delays in the federal aid application process.
57. If you have questions or need help filing FAFSA, the best thing to do is ask! Read the FAQ provided on the FAFSA website or use the contact information provided on the website. Asking questions before you hit “submit” can help prevent costly mistakes.
58. You should never have to pay for help with FAFSA. You can always contact the U.S. Department of Education at www.fafsa.ed.gov or 1-800-4-FED-AID (1-800-433-3243).
59. Check with your college, university, or local community center to see if they offer any FAFSA / federal Financial Aid for College workshops. These are becoming increasingly popular, are typically free, and provide trained professionals and helpful resources for completing FAFSA and answering questions.
60. If you or your child is thinking of applying Early Decision to a college or university, research how this could affect your federal Financial Aid for College. Early Decision acceptance may prevent you from comparing awards, since you may have to commit to the school before you see the financial aid offers from others.
61. Once you receive your Student Aid Report or SAR (which is what you will receive after completing your FAFSA), keep a copy for your records, and compare each schools financial aid award package to help determine your best options.
62. Make certain to contact a school’s financial aid office if you have questions about the aid that school has offered you.
63. It is important to note that you must reapply for federal financial aid every year.
64. If you change schools, your aid doesn’t automatically transfer with you. Check with your new school to find out what to do in order to continue receiving federal Financial Aid for College.
65. If you find you’re not eligible for federal aid, you might still be eligible for financial assistance from your state. Contact your state higher education agency for more information.
Maximizing Federal Financial Aid for College:
66. There are no “secret techniques” to maximizing your federal Financial Aid for College. Everything (legal) that one can do to maximize their chances of receiving federal Financial Aid for College can be found through simple research.
67. There have been many great books written on strategies for good financial planning and management, which is what essentially will help “maximize” your financial aid eligibility. Utilize your local library to find books on this topic.
68. Do NOT attempt to defraud the federal financial aid system; this carries very heavy penalties including large fines and jail time. The goal should be to make certain you are doing everything possible to ensure you get the financial aid that is honestly owed to you or your child. You should not be looking for opportunities to unfairly scam the federal financial aid system, and divert funds away from someone who has a greater financial need.
69. If you have some money saved away and also have consumer debt (credit card balances), you could consider paying these debts off or down. Credit card debt is not factored into the financial aid eligibility equation, but assets such as cash are. By using your saved “cash” to pay off/down consumer debts (such as credit cards), you will be helping to “maximize” your federal financial aid eligibility.
70. When saving for college, save money in the parent’s name, not the child’s name. Since parents only need to contribute around 6% of their assets, and you are expected to contribute more then 5 times that, having more assets in your parent’s names will help maximize your financial aid eligibility. Using a college saving plan that is treated like a parents asset (such as a 529 plan) can also work in a similar fashion.
71. The student should always spend down his or her income and assets before spending the parent’s assets.
72. The student should consider making any large purchases BEFORE he or she files the FAFSA, this way the reduction in cash will “count” towards maximizing your financial aid eligibility.
73. If you have lost your job since completing the FAFSA or PROFILE, inform schools about your situation. The school may have a policy regarding such situations, which could increase your financial aid.
Private Student Loans for College:
74. You should never obtain a private student loan before exhausting ALL of your free money options and federal financial aid options for college.
75. PLUS Loans (which are for parents or graduate students only), have a higher interest rate than other federal student loans, but they are typically a better deal than private student loans. If you are a parent paying for a child’s college education or a graduate student, you should consider PLUS Loans before private student loans.
76. Private student loans will typically be the most “expensive” form of Financial Aid for College, and even reputable private student loan lenders will acknowledge it is in your best interest to file a FAFSA, and obtain what you can from federal student aid before moving on to private student loans.
77. Just because your school may recommend a “preferred lender” doesn’t necessarily mean this is the best deal. Schools may have different reasons for recommending a particular lender(s), and it is always in your best interest to research all of your options.
78. To increase your chances of getting the best private student loan possible, apply with a very creditworthy cosigner (if you have bad or little credit). Private student loans are based on credit, so if your credit is lacking, you will most likely not qualify for the loan at all, or you will qualify at a very high interest rate.
79. You can always try to negotiate the interest rate on a private student loan. If you and the lender do negotiate a lower rate for the loan, make certain to get the final deal in writing.
80. If a private student loan lender is offering discounts and/or special deals associated with your private student loan, make certain to get copies of these for your records.
81. Be skeptical of any company or website that guarantees bad credit student loans without a cosigner. These types of deals are typically either scams or offer you loans at outrageous interest rates.
82. Never borrow more money in private student loans than you absolutely need. If you borrow only the amount you need to cover your college costs, you will be minimizing unnecessary student loan debt after graduation.
83. Never spend private student loan money on non-education related expenses. Private student loans will need to be repaid with interest, so this is not money you should be purchasing a big screen TV with.
84. Each private student loan is different; so do not simply apply for the first loan you find. Repayment options, deferment options and forbearance options can all be different depending on the private student loan lender.
85. Private student loans are not regulated in the same way that federal student loans for college are, because of this, private student loan terms and conditions will differ from lender to lender. It is highly important that you read all the loan terms and conditions carefully before agreeing to the loan.
86. Make certain to ALWAYS keep copies of all documents, forms and applications pertaining to your private student loans.
87. Applying for many private student loans over an extended period of time can hurt your credit. It is best to do your research on private student loan lenders, select the private student loans you like best, and apply to them all with the period of about a month.
88. Even though federal student loans are less expensive than private student loans, private student loans will almost always provide you with better rates than credit cards.
89. If you do to take out private student loans, consider making your loan payments immediately after graduation instead of waiting until the grace period (typically 6 months) is over. Some private student loans will capitalize the interest from this period, which will be added to the principal of your loan, making your loan balance larger.