FINANCIAL AID FACTS

  Is College Too Expensive?

With the cost of college rising you might feel that it is only an opportunity for people with money.  In actuality, a large number of college students receive financial aid to help ease the financial burden on the student and their parents.  There are many types of aid available for students who want to continue their education; grants, loans, state and college scholarships, private and athletic scholarships, and work-study.

Types of Financial Aid

Need-Based Grants are for those who show a need for financial help.  Grants are money that does not have to be repaid, free money.

Types of grants:

v      Federal Pell Grant is a need-based grant that may possibly award you up to $4000 a year in financial aid.  However, certain conditions may have to be met by the student, such as being enrolled as a full time student and/or maintaining good academic standing.

v      Federal Supplemental Educational Opportunity Grant (FSEOG) is another need-based grants for students.  That can award you between $100 and $4,000 depending on your financial need and the availability of funds at the college you decide to attend.

v      Cal Grant A or B are awarded to you if you are a resident of California (in which you have been residing in California for the past two years).  Cal Grant A gives money to those who were not entitled aid.  The amount awarded depends on the institution of education you plan to attend.  The maximum amount a Cal Grant A awards follow: $1,429 if you plan to attend a California State University, $3,429 for a University of California and $9,708 for independent institutions.  Cal Grant B is given to those who demonstrate financial need, in which the maximum amount awarded is $1,551

Loans are granted to students or their parents but must be repaid.

Main Types of Federal Student Loans:

v      Perkins Loan
Perkins Loans is a low 5 percent interest rate need-based loan for undergraduate and graduate students.  You do not repay the loan until you have stopped attending college.

v      Subsidized Stafford or Direct Loans

Subsidized Stafford Loans are for those who demonstrate financial need that will allow you to pay for educational expenses that you may acquire.  There is no payment of interest for subsidized loans until you leave school and must begin to repay the loan and interest accumulated.

v      Unsubsidized Stafford or Direct Loans
Unsubsidized Stafford Loans are not based on financial need, you must pay the yearly interest while in school and repay the loan when you stop attending school.

Private Loans:

v      Federal PLUS Loans
The PLUS Loan program is available for parent’s to take out loans for their dependent undergraduate student enrolled half time.  Parents can borrow the full cost of college expenses that is not covered by any other financial aid.  Repayment starts 60 days after the money is paid to the selected college.

v      College Loans
Some colleges might provide their own services to offer loans to students or their parents.  The amount borrowed and the interest rate may vary however, it is best to check with colleges.

v      Private Student & Parent Loans
Many lenders offer private education subsidized loans to students but most often have a higher interest rate than federal need-based loans.  Private loans offered to parents might also have a higher interest rate than PLUS Loans.

v      Other Loans
Particular organizations and foundations have loan programs that, depending on their conditions, might be more suitable for you or your parents.  You can search for loans on Scholarship Search.

Scholarships are forms of free money that can be offered by the college or students may also apply for them.  The amount awarded by the college depends on the student’s financial need.  However, outside scholarships may range from as little as $50 to an all college expenses paid trip to college.  But beware of scholarship scams that ask for your bank account or credit card number, remember scholarships give you money they should not take it.

v      College Scholarships are scholarships that are given to the student based on their financial need.

v      Private Scholarships are available from a variety of organizations and foundations.

v      Athletic Scholarships are awarded to athletes who have demonstrated talent in a particular sport and are granted money to attend college.

You can find scholarships using these websites:

• Wiredscholar         

• Fastweb              

• Scholarship            

• College Board Online

• Scholarship Resource Network Express

Work-Study is an opportunity for students to earn money as they work on campus.  When applying for FAFSA, the federal government allots a set amount of money each year to students to be earned and used for student’s educational and personal expenses.  Moreover, some colleges might grant you work-study if you are not eligible for federal work-study.

How & When to Apply for Financial Aid

Apply for financial aid using the Free Application for Federal Student Aid (FAFSA).  And if you are applying to private colleges or universities it is required to fill out the CSS/Financial Aid Profile.  If you are a resident of California you may also be eligible for more money if you file a Cal Grant G.P.A. Verification Form that is available from your college counselor or college office.  Moreover, the financial aid offices require that you submit other financial documents (such as W-2’s and tax returns) to determine the amount of financial aid that will be awarded.

Financial Aid Deadlines for Fall 2005-Summer 2006

*Check with the colleges you are applying to for required materials and deadlines.

College Is Possible

College expenses should not be an excuse for not attending an institution of higher learning.  The benefits of having a bachelor’s degree outweigh those of only having a high school diploma.  According to U.S. Census Bureau statistics, a college degree gives people a better chance of getting a job and earning 60% more money than those with a high school diploma.  Do not let the cost of college scare you.  A lot of money goes unclaimed every year.  Think of college as an investment in your future, a car will lose its value in a few years, but your college degree will never lose its worth.  So search and apply for as many scholarships and other forms of financial aid to help you with your journey through college.