Making Your Way Through Financing College

Many baby boomers are in the middle of funding college educations for their children. Next year, I will have two children in college. My son will be a senior at a public college in Maryland and my daughter will be attending a private college in Pennsylvania.

For most of their lives I was a single parent. While I always made a decent living, there was not much left over to save generously for college. Their dad, for various reasons will not be contributing to their college tuitions, so I am solely responsible for funding. I have to admit, this has started to cause me some sleepless nights.

There seems to be quite a maze of options available for financing, and I thought I would share a bit of what I have learned and I am hoping that others will add to this information as well.

OK....so how can we get our kids through college? What are our options? What do we, as parents or guardians need to do?

• Community College: These are two year schools which offer students a chance to take many of the basic liberal arts courses that are required in the first two years. Most of the time your student will live at home so this saves tons of money on dorms and meal plans. Tuition is very reasonable and if your student has done well academically in high school, they may even be able to have that tuition reduced. In New Jersey, the STARS program rewards students graduating in the top 20% of their class with free tuition! Many community colleges work closely with public 4 year colleges to make transferring after two years at community easy.
• FAFSA: This must be completed if your student is planning on applying for scholarships or student loans. This is done EVERY Year! The sooner you can complete this the better. It is highly recommended that it be done by the end of January. You can use the previous year's tax return and then go back and update once you have your current tax return completed. Check with individual colleges for deadlines. It is a bit time consuming and initially seems overwhelming. This application can be done online, so click here for a direct link! Note: Your expected family contribution is based on the household in which the child resides. So if you are remarried, the step parent's income is considered even if they are not helping pay for tuition!
• Scholarships: Private colleges and universities usually have a structure in place for awarding "free money" to students. Each school will have its own set of guidelines for these awards. So as you are looking at colleges take a close look at what your child needs to do to be eligible. Many times it is connected to class rank and SAT scores, so you need to be realistic. Think you have an athlete who will receive money for their talents? The NCAA has a boatload of rules and regulations for this too! Only Division One and Division Two schools can award athletic scholarships, but there are academic requirements. Click Here to find out more about the qualifiers and talk to your child's high school counselor! There are also a multitude of small, some quirky scholarships available, but you and your child will have to dig and read. FASTWEB is one such website where you can register for information and apply for independent scholarships.
• Grants: These are need based awards. After you fill out the FAFSA and your expected family contribution is calculated your child may be eligible to receive a grant. This is money that does not have to be repaid.
• Student Loans: The Stafford Loan is available for students to take. Repayment does not begin until after graduation. Again the FAFSA must be completed and your child needs to apply through his/her college. This can all be done online and colleges are usually good about helping you through the process. Click Here to find out how much your student can borrow each year and for more information on the Stafford.
• Parent Loans: PLUS-Federal Parent Loan for Undergraduate Students. These are low-cost education loans for parents at a fixed interest rate (currently 8.5%) Repayment starts shortly after disbursement and requires a credit check. There is also an "origination fee." You can do this through your selected college.
• Monthly Payment Plans: Some colleges will offer interest free installment plans. My daughter's college will allow me to decide how much of her tuition I would like to pay over a ten month period and deduct this from my account monthly.

These are just some of the options available that I have found. Believe me, I am learning as I go and by no means claim to be an expert. Use the financial aid office at your college to help you with all of this, and read as much as you can to help yourself become familiar. If any of you have helpful information or tips that you have found, please share!!!