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The College Cost Crunch

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How to Cover College Costs

1. Search thoroughly for "free" money. Scholarships aren't just for A+ students or star athletes, says Kelly Tanabe, coauthor of 1001 Ways to Pay for College (SuperCollege). For instance, participation in community service, religious affiliation, and artistic talent are also frequent criteria.

Encourage your teen to start searching during her junior year to ensure she won't miss any deadlines, often in the fall of senior year. "Every student should apply for at least 10 scholarships to increase the odds of winning one or two," says Lynnette Khalfani, author of Zero Debt for College Grads (Kaplan Publishing). Kids should visit FastWeb.com and CollegeAnswer.com, Internet sites that will generate lists of possibilities based on intended major, special talents, GPA, and other info. It's also smart to ask school guidance counselors about scholarships offered by area businesses, churches, and community and service organizations. Local awards are generally easier to win than national ones because fewer people compete for them.

2. Fill out the FAFSA ASAP. The Free Application for Federal Student Aid (FAFSA) is used to determine eligibility for all federal aid, including Pell grants, loans, and work-study programs, plus many state- and college-based initiatives. By all accounts the six-page FAFSA can be tricky -- okay, exasperating -- but it's a must in order to apply for need-based aid, determined strictly by a family's income and assets or lack thereof. (President Barack Obama pledged during his campaign to eliminate the FAFSA form, but whether that will happen remains to be seen.) The federal deadline is always June 30, but many state agencies and colleges require the form be completed as early as March 1. Some aid is given out first-come, first served, so later filers could potentially miss out on money, says Lee Harrell, assistant vice president of financial aid at Ohio Wesleyan University.

To fill out the FAFSA online, go to fafsa.ed.gov. For a paper copy, check the library or call 800-4-FED-AID. You will need your driver's license, bank statements, mortgage data, and the previous year's tax return to complete the form. If you haven't done your taxes yet, estimate your numbers based on the prior year's return rather than wait, suggests Harrell. You can update the figures later. Pro help with the FAFSA -- starting at $80 -- is accessible at fafsa.com. If your child isn't a senior yet but you would like to get a sense of what's involved, go to fafsa4caster.ed.gov.

3. Compare aid packages. Every school that admits your kid will review your FAFSA and issue an award letter indicating the types and amounts of aid it can offer. Obviously, scholarships and grants are most desirable because -- unlike loans -- they don't have to be repaid. For help comparing aid packages, use the Award Letter Comparison Tool at FinAid.org.

4. Push for a better deal. If you feel a package contains too many loans or if the amount the school expects your family to contribute doesn't reflect extenuating circumstances, such as job loss, ask for a reassessment. "Financial aid officers hate the word 'negotiate,' but they usually have a fair amount of leeway when determining how much aid a student receives, especially if the school really wants your child," says Khalfani. Be clear about why you can't afford to pay and exactly how much assistance you need.

If your child gets a generous aid package from a college that isn't her top choice, leverage that offer to win more aid from the place she really wants to attend. Write a letter to her desired school explaining why she would rather go there and why the cost is prohibitive. Talk in the language financial aid officers understand -- numbers. (At this point, it's not about how wonderful your child is.) Make sure to include a copy of the other school's award letter.

5. Go where the money is. Some schools are able to be more generous with merit-based aid, usually because they have large endowments or are actively trying to attract top-tier students in an effort to inch their way up the college rankings ladder, says author Lynn O'Shaughnessy. To up your child's chances of receiving money, apply where she would be likely to fall within the top one-third or one-quarter of the applicant pool, says O'Shaughnessy. You can get a good idea of how her academic record compares by looking up a school's range of test scores and average GPA at collegeboard.com. Also keep in mind that although it seems counterintuitive, high-priced private schools can actually cost less than cheaper state schools in the long run, simply because private schools generally have a much deeper well from which to draw when awarding financial aid.

6. Agree on a split decision. If your son's first choice is a pricey big-name university, broach the idea of starting out at a community college for a year or two, then transferring to get the designer degree for far less money, suggests Robert Brokamp, who writes about money management. Contact the desired school beforehand to make sure it will accept transfer credits and to find out whether there are any specific course or GPA requirements that you should know about.