Paying for College 101

There’s no way around it. A college education is expensive, especially if you or your child goes to a private school. How much it will cost depends on the school you choose.

Once you’ve narrowed your choice of schools, contact them to find out how much the total cost will be and what scholarships and financial aid are available.

High schools often hold free seminars on choosing and paying for college. Another source of information on financial assistance from both private and government sources is www.finaid.org. This site also offers calculators that can help you figure out how much school will cost, how much you need to save, and how much aid you will need.

Many state governments have created programs to make it easier for families to save money for their children's education. Visit www.collegesavings.org for links to information on various state programs such as 529 plans.

Student Financial Aid

Student Financial Aid is available from a wide variety of sources including the federal government, individual states, directly from colleges and universities, as well as from numerous other public and private agencies and organizations. Whatever the source, all forms of college aid fall into four basic categories:

• Grants. Gift aid from grants does not have to be repaid and is generally awarded based at least partially on financial need.
• Work Study. The Federal Work-Study Program (FWS) is a federally funded source of financial assistance used to offset financial education costs. Students earn money by working and attending school. The money does not have to be repaid.
• Loans. Funds that are borrowed and must be repaid with interest are loans. As a general rule, educational loans have far more favorable terms and interest rates than traditional consumer loans.
• Scholarships. Offered by schools, local/community organizations, private institutions and trusts, scholarships do not have to be repaid and are generally awarded based on some specific criteria.

Federal Student Aid

• Many helpful publications are available at www.studentaid.ed.gov/pubs or you can call 1-800-433-3243.
• www.dl.ed.gov The federal government's direct loan website includes a servicing center.
• www.bls.gov/oco The U.S. Department of Labor's Occupational Outlook Handbook provides information on various careers and their earning potential.
• www.ed.gov The U.S. Department of Education offers several financial aid guides for consumers.
• www.nasfaa.org The National Association of Student Financial Aid Administrators provides a "Cash for College Guide" with advice, tips and information on financing your education.

Federal Student Aid Information Center

The Federal Student Aid Information Center (FSAIC) can answer your federal student financial aid questions and give you all the help you need for free. You can also use the FSAIC automated response system to find out if your FAFSA application has been processed and to request a copy of your Student Aid Report (SAR).

Beware: Scholarship and Financial Aid Scams

Some unscrupulous companies guarantee that they can get scholarships on behalf of students or award "scholarships" in exchange for an advance fee. Most offer a "money back guarantee" but attach conditions that make it impossible to get the refund. Others provide nothing for the student's advance fee, not even a list of potential sources. Still others tell students they've been selected as "finalists" for awards that require an up-front fee. Sometimes, these companies ask for a student's checking account to "confirm eligibility," then debit the account without the student's consent. Other companies quote only a relatively small "monthly" or "weekly" fee and then ask for authorization to debit your checking account for an undetermined length of time. Be cautious of paying for information that you can obtain for FREE.

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