Federal Student Aid

 There Is No Getting Around It – College Is Expensive!

We did a post last May that reported here, in Connecticut, yearly college costs varied from twelve thousand dollars at Charter Oak State College to over 61 thousand dollars at Yale. Very few families have the financial resources to cover those kind of expenses without help.

According to USA Today:

More college students are receiving loans, grants and other financial aid than at any time since the debut of the GI bill after World War II, new data show.

Seventy-one percent of all undergraduate students received some type of financial aid in the 2011-12 academic year… Most of the increase in student aid is coming from federal sources.

So, since most of the financial aid is coming from the U.S. Government, let’s take a quick look at Federal Student Aid:

According to the Federal Student Aid web site, Office of the U.S. Department of Education:

The U.S. Department of Education awards about $150 billion a year in grants, work-study funds, and low-interest loans to more than 15 million students. Federal student aid covers such expenses as tuition and fees, room and board, books and supplies, and transportation. Aid also can help pay for other related expenses, such as a computer and dependent care. Thousands of schools across the country participate in the federal student aid programs; ask the schools you’re interested in whether they do!

Financial aid is available from a variety of sources for college, career school, graduate school, and professional school.

Financial aid is money to help pay for college or career school. Aid can come from

Besides financial aid, you also should think about what you can do to lower your costs when you go to college.

Here’s a short video  from Federal Student Aid Office that offers a quick overview (2:14 minutes).

The Federal Student Aid web site provides a wealth of information and advice. There are links to many other sources of useful and valuable information. Visiting this web site is a must for anyone who will be facing college bills in the next few years.

And don’t forget, the Tri-Town Teachers FCU offers scholarships to members and their families. Admittedly, this won’t cover your expenses at Yale, but hey, every little bit  helps.

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Federal Educational Financial Aid

To say the cost of higher education is daunting is an understatement. Here in Connecticut, the yearly sticker prices for a sample of schools range from $12,535 at Charter Oak State College, to $61,333 at Yale (source: CNNMoney). Help is available and since the Federal Government is responsible for much of the financial assistance, a good place to start looking is the U.S. Dept. of Education.

The material below is reprinted from the U.S. Dept. of Education, Federal Student Aid web site. Read it for a quick overview and links to a number of  web sites and documents to assist your search for financial aid. But be sure to visit the source web site for the complete story on what financial aid might be available to help YOU.

 

Aid and Other Resources From the Federal Government

The federal government offers a number of financial aid programs. Besides aid from the U.S. Department of Education (discussed below), you also might get

The U.S. Department of Education awards about $150 billion a year in grants, work-study funds, and low-interest loans to more than 15 million students. Federal student aid covers such expenses as tuition and fees,room and board, books and supplies, and transportation. Aid also can help pay for other related expenses, such as a computer and dependent care. Thousands of schools across the country participate in the federal student aid programs; ask the schools you’re interested in whether they do!

Federal student aid includes:

  • Grants—financial aid that doesn’t have to be repaid (unless, for example, you withdraw from school and owe a refund)
  • Loans— borrowed money for college or career school; you must repay your loans, with interest
  • Work-Study—a work program through which you earn money to help you pay for school

Use FAFSA4caster to get an estimate of how much aid you might receive from the U.S. Department of Education.

Apply for federal student aid using the Free Application for Federal Student Aid (FAFSASM). And remember, the first F in “FAFSA” stands for “free”—you shouldn’t pay to fill out the FAFSA!

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Tips on Dealing with College Costs

One of the major categories of the Tri-Town Apple is Life Events and Higher Education is part of this category. As with much of the content here, we use readily available information published by the government, centered around the “mymoney.gov” web site. We strongly recommend you visit that site, not only for information on higher learning, but on just about all the major events and happenings that take place over a lifetime.

The cost of sending an offspring to college can be staggering. And the bill for several children attending an institution of higher learning can strain a family’s budget to the breaking point.

There’s no getting around it. Except the few who receive sizable scholarships, there will be large bills for tuition, room, board, books and fees. But that is not to say you are helpless in the face of this heavy hit on the family finances. There are strategies that can help. As with most significant parts of life, anticipation and early planning can make a big difference when the “rubber meets the road”, or in this case, “when the student hits the road” for school.

Today we’re looking at cost of borrowing for college and what can be done to minimize these expenses. We’re using a web article published by Federal Deposit Insurance Corporation (FDIC) under their FDIC Consumer News initiative. To read the entire article go here, and we encourage you to do that. The main points are summarized below.

Higher Education, Lower Debt: Ways to Minimize the Borrowing Costs for College

“The average annual cost of higher education has increased dramatically in the last decade. And with education debt continuing to rise along with the increase in costs, many people face a tough financial situation. FDIC Consumer News offers these tips to help students and their families …” (more)

Start saving early to reduce the amount you may need to borrow.

“In particular, Section 529 college investment plans, which are mostly offered by individual state governments, are a helpful tool for building a savings fund.” (more)

“U.S. Savings Bonds are another way to save for the future and, for qualified taxpayers, to benefit from a tax exclusion if the money is used for education expenses.”

“To learn about Savings Bonds, start at www.treasurydirect.gov/indiv/indiv.htm. For information about the tax exclusion, go towww.treasurydirect.gov/indiv/planning/plan_education.htm.” (more)

Find ways to cut costs. 

“High school students who take advanced courses or pass special college-level exams can earn college credits before they set foot on campus. “It’s never too early or too late to start saving on future tuition expenses and reduce the amount you’ll need to borrow for college,” said Denise Waters, an FDIC Consumer Affairs Specialist.” (more)

If you must take out a loan, understand the different options.

“Federal student loans usually have lower interest rates and more flexible repayment options than private loans from non-government lenders such as banks and credit unions. Under current law, all federal student loans are obtained through the Federal Direct Loan Program administered by the U.S. Department of Education. The easiest way to learn more about federal student loans, and to apply for a federal loan, as well as federal student aid and most state and college aid, is online at www.fafsa.gov.”  (more)

Choose the best repayment plan.

“For federal student loans, a monthly, fixed payment over a standard, 10-year term is the most cost-effective arrangement and minimizes the total amount of interest you’ll have to pay. However, there are alternatives… (more)

For more information for students and parents from the FDIC, the U.S. Department of Education and other government agencies — on topics ranging from money tips for young adults to saving for college — start at here.”

 

For some, this advice is probably well known, but that doesn’t make it any less valuable and a quick read will reinforce the good advice that it is. For those just starting to think about college costs, the FDIC article is a good place to start and there are many embedded links that will take you additional worthwhile information.

Remember, it’s not going to cost you anything to be well prepared!

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