Showing posts with label federal aid. Show all posts
Showing posts with label federal aid. Show all posts

Sunday, June 14, 2015

Saving Money For College

It's graduation time and that means in a few months lots of people will be heading to college so I thought I'd do a post about saving money for college.  I'd say I'm well versed on the nuances of college funding; I spent my junior and senior years of high school researching and applying for scholarships, I ended up attending 5 different colleges (two community colleges, two public universities -- in state and out of state, and one private university) over my 5 year span of undergrad, and I received various sources of funding (529 plan from an inheritance, government funding, school and private scholarships).  I also helped my husband (boyfriend at the time) apply for loans when he transferred to a university.  So I hope this little article can help on people being able to better afford college.

Types of Funding for College

First, lets clear up all the different kinds of funding you can get for college.

saving money for collegeScholarships and Grants
This is money you do not have to pay back, the best kind!  These can be from the government, from the school, and from many private companies or organizations.

Obviously this is a loan which means you have to pay it back.  But student loans are some of the cheapest loan options.  You do not incur any interest while you are still in school (some do require a full time status so make sure you meet all requirements for this) and there's even a grace period after you graduate, usually 6 months, before you have to start paying anything back.  Interest rates are some of the lowest types of loan rates.

Work Study
Work study is a program where you work jobs at the school to help earn money to pay for your education.  These can be better options than trying to find a job outside of the school because it is easy to get to, they work around your schedule, and even can be in your field of interest.

529 Savings Plan
Since this is a savings plan, it really needs to be implemented years before you plan to attend school so it's not the best option if you don't have any to invest or don't have the time.  More on this later. 

You can have any combination of funding and as much as you want.  Just because you get a full ride scholarship doesn't mean you can't apply for private scholarships or do work study as well (unless stated in the rules of you scholarship).  While your tuition might be paid, there are so many other expenses that goes into higher education.  Schools' and companies' policies on imbursement vary.  Some might pay directly to you but most are given to the school.  But some schools pay you any leftover amounts after deducting all tuition and fees.  There can be a grey area then on taxes whether that is taxable income or not, but especially if you are not living on campus, usually you can say that it was used for higher education because living expenses are included in that.

How to Get Funding

Step 1: Fill out the FAFSA

The Free Application for Federal Student Aid (known as the FAFSA) is a form you fill out online for government and school funding.  It is a requirement at most schools anyway, but it's also the best way to get funding.  It is how the school will determine what financial aid they will offer you, what the government will offer you and federal loans.  You need to fill it out every year that you will be in college.  Here's their website:

**Tip: Fill it out early!  You need your current tax info (and your parents' if you're a dependent) so fill out your taxes as soon as you can and then do the FAFSA.  They give out money on a first come first served basis so the earlier you fill it out, the more money you can potentially get!**

Step 2: Apply for Scholarships

High School Seniors:
This is the best time to apply for scholarships.  Most scholarships are for high school seniors only.  There are a wide range of scholarships based on academics, activities and interests, heritage, and your major to name a few.  Apply for everything you are eligible for, you never know!  Sign up for FastWeb which is an online scholarship search.

Everyone Else:
While most scholarships are reserved for high school seniors only, don't let that stop you from searching!  There are a lot of scholarships offered through your school's departments that aren't as widely advertised.  Sometimes these are the reverse and are actually reserved for upper division only.  I once got a scholarship from the Performing Arts Department because I was the only one that applied.  Search online or go to the dean's office.

Step 3: Sign up for Upromise
Upromise is a rewards program where you get cash back for using your cards at certain stores and shopping online through their website.  You can sign up for your children (or yourself if you're over 18) and you can even add family and friends' as well.  You're supposed to use the money you earn for college, though I don't know how they regulate that since they just send you a check.  This is great for parents to start early on in their child's life, but it can be started anytime.  Every dollar helps!  Sign up here:

California Military Dependents
There is an awesome program called The College Tuition Fee Waiver for Veteran Dependents.  It covers all tuition and fees at any California Community College, California State University, or University of California campus.  This can be renewed every year until you are 27.  The requirements are really easy to meet since the disability just has to be 0% or more.  For more information click here.

529 Savings Plan
If you are a parent trying to save money for your child's future education, this is probably one of the best ways.  This is a savings plan specifically for higher education.  There are several investment options to choose from though usually in a mutual funds.  The savings and interest are non-taxable, even when funds are taken out, as long as they are used to pay for education.  As with any savings, a long term investment will give you the most rewards.  There are many different companies that offer these plans, so do your research.

I hope this helped clear up ideas about funding for college!  Let me know if you have any questions.