Saving for College - How to get financial Aid

While the official rate of inflation has hovered in the very low single digits for the last 15 years, the cost of a college education has sky rocketed right through the roof. Private school tuitions now exceed $30,000 per year, and even state schools will cost at least $10,000 per year for in-state residents. How can you save for college? How can you pay for a college education or get enough scholarships and financial aid to help with your school expenses? These are all important questions you need to ask when you begin considering plans for college for yourself or your children. Below, we will look into some college expense calculators and estimates, find out about special programs for student loans and educational grants, and the best places to apply for financial aid, and what you should expect.

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College Cost Calculator - College Expense Estimator

How much does tuiton cost at various universities? A good site to start with is CollegeAnswer.com. This is an excellent site run by the government agency SallieMae. They have a section on school affordability to give you a pretty good estimate of college expenses. Click the state and school you are interested in, choose in state or out of state tuition, and up comes all the information you need -- tuition expense, additional fees, estimated book expense, room and board costs, and other expenses. For Boston College, we came up with a total of $40,666 per year. For UCLA, we got an estimate college cost of $36,171 per year (out of state), while Cal State Chico is "only" $26,198 per year. For cheaper states like Oregon, the cost of a year at University of Oregon is $13,781. This is a great site for getting quick comparisons of tuition and living expenses at many schools, all in one place. They also offer a very helpful guide called "How to Pay for College" for $18 at Barnes and Noble or Amazon: "Aimed at parents who are footing their children's college tuition bill, this guide explores everything from financial aid and scholarships to student loans and work-study programs. Sallie Mae, the nation's leading provider of education funding, has assembled an elite group of financial aid officers at respected colleges to provide a behind-the-scenes look at how financial aid works and what parents can do to maximize the amount they receive. This comprehensive guide is filled with useful tips, strategies and advice to help all families create a plan to pay for college."

When considering how much school costs, there are several components: tuition is the cost of the classes you take; room and board are your living expenses, whether for on-campus housing or apartment, and your meal costs; then comes books and supplies, computer, transportation, personal expenses, and any other school fees. When it comes to saving for college, they cover 529 College Savings Plans, Coverdell ESA (educational savings account), UGMA accounts -- they even have a section on free money for college. This includes information on discovering scholarships available from employers, individuals, schools and colleges, and religious and professional groups. Most people are surprised about how many local organization offer scholarships. Sure, they won't pay for all your college expenses, but picking up $1000 here and $1000 there will go a long way in reducing your out of pocket expenses.

Applying for financial aid

When you fill out your college application forms, you should also apply for financial aid. The first step is filling out the Free Application for Federal Student Aid (FAFSA) available at Fafsa.ed.gov . Your college will use this along with a CSS Profile Application to determine your level of need and aid. They will calculate your Expected Family Contribution - if it is less than the cost of your school, you will be eligible for loans, scholarships, and/or grants to help make up the remaining funds. All state schools require you to fill out these federal forms, Even if you don't think you will qualify for financial aid, many colleges will still offer grants for part of tuition expenses to attract students they want to attend. For additional information on the FAFSA and CSS Profile, check out Finaid.com. They have complete details on dates and deadlines for submitting forms, and links to the online sites where you can complete your applications.

Getting a Student Loan

Many financial companies offer student loans. In general, you will need a co-signer (usually your parent(s)) when getting a student loan since you will likely be going to school full time and will not have any income to qualify for the loan on your own. One such company you can check out is AstriveStudentLoans.com. With a strong co-signer, they promise you can get funds within 5 days of applying. You need to know and verify your school enrollment plans prior to getting a loan from them. You can borrow from $1500 to $30,000 per year, with a lifetime maximum of $130K. There are no out of pocket fees or expenses - all costs are built into the loan amount, meaning there are no cash outflows up front. Loan terms are a maximum of 20 years and there are a number of payments options. You can begin immediate payments while you are in school to pay off the loan as quickly as possible (a $10K loan with 20 year term would cost you $92 per month at an est. 9.3% APR), you can make interest only payments while in school then switch to full payments upon graduation, or you can defer payment until you graduation (4 years) and then pay $132 per month for the next 20 years with the loan example above. Opinions vary when it comes to student loans. A college education definitely increases your lifetime earning potential, but many jobs that require a college degree don't come with big salaries, like teachers or social workers or archeaology majors. Keep this in mind when deciding what kind of debt load you want to take on, and your ability to pay it back. Many students graduate with so much student debt that they can never get out from under it, and feel continual stress for decades about career choices and financial tradeoffs. Our recommendation is to minimize loans by working part time in school, applying for grants and scholarships, and selecting more affordable schools if top-rate colleges will leave you financially destitute upon graduation. Also remember that most millionaires in this country got that way by having their own businesses (something like 2/3). If you have a career plan that doesn't require climbing the ranks of corporate America, chances are that the education you get at any university will serve you just fine.

GMACBankFunding.com is another site you can visit to find out about student loans - they offer loans up to $40K per year.

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