College Aid for the Middle Class
College Financial Aid?
If you are in the middle class, be careful about what you expect in the way of financial aid from colleges. Those wonderful statistics from the college about the percentage of students getting aid and the amount of that aid include loans and work study programs.
Perhaps you went to the free seminar put on by the local college and learned all about filling out the FAFSA form (federal Application for Student Aid). You might have even repositioned some assets to improve your eligibility. Surprise! The form the school sent you may include requests for additional information not on the FAFSA. For example, the school form may ask about the equity in your home. School forms often request a lot more information than the FAFSA form.
Because you did such a good job on the FAFSA form, you got a subsidized student loan. If middle class, you may find that you do not qualify for the subsidized FAFSA loan unless you have more than one person in college simultaneously. The subsidized loan mean that the government pays the interest while your child is in college. If you were awarded the unsubsidized loan, you or your child will have to pay the interest sooner or later.
If your child is a top student or athlete, scholarship money may be available. Top scholars will typically find scholarship money at schools that are easier for them to get into. The top schools have enough top students applying that they do not need to offer scholarships on merit alone.
There are free search engines on the web to help find potential scholarship money. One example is http://www.fastweb.com. This is on of the largest free scholarship searches on the internet. Also, the colleges of your choice may be able to offer some other possible sources to search. These are outside scholarships. It is not necessary to pay money to do this kind of search. There are some firms that would like to convince you that only they can do a successful scholarship search. Be careful not to pay a lot of money for something you can easily do yourself.
Your employer may be affiliated with loan programs which will provide unsecured loans to pay college expenses. One example is CONCERN. These program offer loans of much larger amounts than the FAFSA limits and can be used to make up the difference. An unsecured loan does not require collateral for the loan. When you take a mortgage, your house is collateral. The financial aid office of the colleges can very helpful in identifying alternative loan programs and alternative payment plans. Colleges generally have a "needs blind" admission policy. This means that your ability to pay is not part of determining whether you receive an offer of admission.
Another option is a loan on which only the interest is due during the college years, and after the college year the payment then includes interest and principal. This type of loan is available through some banks and other financial institutions including brokerages.
So, unless you are one of those fortunate enough to find a scholarship, the basic look of financial aid for middle class America is the loan.
There are some ways to reduce costs.
State schools are almost always less expensive than private schools. Some state schools offer top rated programs.
Some community colleges offer excellent preparation for transfer to a four year college as a junior. In some states the community college curriculum is coordinated with that of the state college to allow a seamless transfer. If you intend to transfer from a community to a four year college, determine what credits the four year college will accept. To ensure this, get this in writing from the four year college in advance. Never rely on the two year college to tell you what credits will be accepted at the four year college. And remember the person you talked to at the four year college may no longer be there when you arrive with transcript in hand.
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