Dunnan on Dollars

  Personal Finance Tips from Nancy Dunnan

Paying For College

The High School Years

The most worrisome time for parents is when their children are within two years of graduating from high school. You will be most successful as a parent if, during this time frame, you are armed with information, keep key dates in mind and are well organized.

The First Four Steps

1) You should get to know your student’s guidance counselor. Ask to be informed about financial aid workshops run by the school, details on local scholarships, advice on the college application process and upcoming college fairs and visits from college recruiters.

2) Order a free copy of “Funding Education Beyond High School: The Guide to Federal Student Aid,” which is available in English and Spanish at school financial aid offices, online at: http://studentaid.ed.gov (click on “Tools & Resources,” then choose “Publications’), or by calling: 800-433-3243.

3) Spend some time going over the general information provided by the College Board. Your first read should be the section for parents at: www.collegeboard.com/parents/pay. It explains everything from how to apply for scholarships and other financial aid to understanding the award letter you’ll receive from any school to which your child has applied for financial assistance.

4) Then go to Sallie Mae at: http://go.salliemae.com/plan for a clear overview the loans for which both students and parents can apply. The site also has a calculator that estimates how much each school would cost you for four years as well as what your options might be for loans to fill in any gaps.

5) Your fifth step in the learning process is to understand the difference among loans, grants and scholarships.

A loan is money that you borrow and must pay back, usually with interest. Loans may be private or from the government.

Grants and scholarships, often given in recognition of achievement and/or financial need, do not need to be paid back. Some grants and scholarships are also career specific.

The best type of loan is one that’s subsidized by the federal government. The two major players in this field are Stafford loans and Perkins loans. Even better than loans are federal grants (which never need to be repaid) and federal work-study awards, in which students get paid to work campus jobs – perhaps in the dining hall or library.

Note: The U.S. Department of Education is your best sources for details on these programs along with chapter and verse on federal loans. Go to: http://studentaid.ed.gov.

Stay Tuned. Next Week: Dealing With the Dreaded FAFSA – Free Application for Federal Student Aid.

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