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Financial Aid Made Easy

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planning for college can be stressful and time consuming for students and their families. It's exciting to consider which schools to apply for and even more validating to receive acceptance letters, but worries about tuition can be disconcerting. Parents may worry that their income won't allow their bright, young child to attend a university that matches their potential.

There are a lot more options than you might think!
Before weighing your choices, a student should consider what kind of careers and majors they find the most intriguing. Secondly, they should ask themselves which colleges are ideal, not just for the student as an individual but also for their major, and why they find those schools so appealing. What are their second, third, tenth choices?

Before you get in over your head, you'll need to get an idea for what you and your family can afford to pay. Your first step is to fill out your Free Application for Student Aid, or FAFSA.

FAFSA

FAFSA is filed with the US Department of Education and essentially evaluates your financial situation, determines whether you qualify for financial aid and to what extent you can benefit from it. When a prospective or current student submits a FAFSA form, they automatically become candidates for all federal and state grants available. To be eligible for financial aid, you must be a citizen with a high school diploma (or GED) and cannot have not been convicted on any drug related charges.

Your FAFSA results will give you your Expected Family Contribution (EFC), which is an assigned dollar amount to your financial ability. Significant financial aid can be awarded with a low EFC; if you come from a low-income home and have additional siblings in college, both your EFC and your financial burden will lower. Keep in mind that your EFC will not be the same for every college and that aid is granted on a first come, first served basis.

Every family that questions their ability to put their child through college should file for FAFSA.
This ensures you will get whatever help from the government that you qualify for, and the most bang for your buck. In fact, a recent study showed only 58% of eligible community college students and 77% of eligible state-school students even bothered to apply for financial aid in 2007-2008. The study, authored by the College Board's Advocacy and Policy Center, suggests that some students avoid four-year colleges because they assume they can't afford to attend.

Thanks to FAFSA, $168 billion dollars in financial aid were allocated to students in the 2009-2010 school year. To apply electronically, go to fafsa.ed.gov.

Grants

After applying for FAFSA, what type of grant might be in store for you?
If your family makes less than $20,000 a year, you could be awarded a Pell Grant. Filing as an independent might improve your chances of receiving the Pell if you can validate your financial need. If have ever been incarcerated or have defaulted on government loans, you do not qualify for a Pell Grant.

Other Grants include the Academic Competitiveness Grant, the TEACH Grant, the SMART Grant, Federal SEOG Grants, and State Student Incentive Grants, all of which are need-based. Some grants, such as the TEACH grant, require that you score above the 75% percentile on your SATs or ACTs. Other grants, like the science & math based SMART grant, are only applicable to certain majors.

Scholarships

If FAFSA fails to meet your needs, don't despair!
Studentaid.com reports that $43.3 billion in aid is from private sources opposed to government programs. That being said, apply for as many scholarships as you can. There are thousands of scholarships available to you, whether you play football or make prom dresses out of duct tape. Based on your SAT or ACT scores, you could qualify for a merit scholarship. Community and religious groups often sponsor scholarship programs, as do non-profits and volunteer organizations. Student-specific sponsorships based on your race, gender, religion, family or medical history are also widely available.

High-demand careers such as teaching and nursing typically offer bigger bucks to prospective students. With so many jobs available and so few to fill them, industry leaders are motivated to award scholarships more so than other fields. Some scholarships come at a price, though: a teaching fellow in the United States must pay back the assistance they received for their education by working wherever their state needs them, most often in rural areas.

How do you know you'll be able to get a scholarship? You can't know for sure. Are you tall? Are you short? Are you left-handed? Are you a vegetarian? A meat-eater? A trekkie? Do you want to write the next great American novel in a spaceship? Yeah, there's a scholarship for that.

Student Loans

In a financial bind and only when absolutely necessary, students can take out loans to pay for their education.
Not all student loans are created equal, however. A Federal Direct Subsidized loan does not obligate the student to pay interest while in school, unlike an unsubsidized loan. Other federal loans include the Perkins Loan, the Parent PLUS Loan, and the Graduate PLUS Loan.

Most banks offer student loans at a higher interest rate than a federal loan. Some competitive state and private colleges have reformed their financial aid programs to reduce student debt and encourage a diverse socioeconomic student body.

There are a lot of factors to consider when choosing a student loan plan. Will your student loan damage your credit score? What percentage of your monthly income will you be able to contribute to paying off your loan? How high is the interest rate? How will it affect your taxes? Hit the books and read the fine print of the terms and conditions for each plan. You'll be glad you did.

Avoid student loans as well as you can.
A good education will follow you wherever you go, but so will your credit score and your student loan debt.

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