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Paying for College > Overview
Federal Financial Aid
Scholarshp Tips
SCHOLARSHIP LISTINGS
Paying for college > Overview
Navigating the world of financial aid can be difficult, confusing, and frustrating at first. But, it can also be a source of additional funding for your college education. Advisors at EOC are available to help with financial aid and scholarship seaches on a counselor-aided or self-directed basis (984-3286). This section will give you an overview of financial aid process.
College, an investment in your future
"Aside from your home, a four-year college education may be the largest expenditure you’ll ever make," according to Theodore E. Hughes and David Klein in their book, The Parents’ Financial Survival Guide.
Four years of college can cost thousands of dollars, while advanced and professional degrees taking up to seven years or more, can run into the hundreds of thousands of dollars. The expenses include tuition, fees, room and board, books, supplies, and personal expenses such as clothing, medical and auto insurance, transportation, trips home, vacations, entertainment and emergencies.
Your up-front expenses (tuition, fees, and room and board) must be paid prior to starting college and are met through family contributions, federal grants, loans, scholarships, and institutional aid. Other expenses, such as living expenses and travel, can be spread out over the school year and met through the parents' monthly contribution, the student's employment, and excess scholarship funds (hopefully).
Federal aid
The first place to begin looking for financial aid is the federal financial aid program. While the student's family is expected to pay for educational expenses to the extent that they are able, the U.S. Department of Education has committed financial resources to help students pay for their education where family resources are limited.
A Free Application for Federal Student Aid or FAFSA form is used to determine a family's expected contribution (EFC). The difference between the cost of attendance and your family's Expected Family Contribution is considered financial need. Financial aid officers at the college you plan to attend will use your financial need to come up with a financial aid package.
The financial aid package can include grants (free monies does not need to be repaid), low-interest student loans, and federal work-study programs. Over 50 percent of today's students receive need-based aid. The cost of attendance is determined by each instution and is available from their financial aid offices. For more detailed information about completing a federal financial aid application, see our Federal Financial Aid link.
Hope Scholarship Tax Credit and other initiatives
Students from mid-income families who do not quality for federal grants (free money), may be eligible for the Hope Scholarship Tax Credit. The Hope Scholarship Tax Credit is not technically a scholarship, but a federal tax credit that allows eligible taxpayers a tax credit of up to $1,500 per student, per year (100% of the first $1,000 and 50% of the next $1,000 of qualified tuition and fees) for their first two years of college. The credit offers a dollar for dollar write-off against your tax liability.
Other educational tax initiatives include the the Lifetime Learning Tax Credit, deduction of student loan interest, and penalty-free withdrawals from an educational IRA. See the IRS Tax Incentives for Higher Education Expenses for detailed information about these tax initiatives.
There may still be a gap in aid and costs
It is unlikely that a student will receive enough financial aid, subsidized loans, and non-financial need scholarships to cover 100% of the cost of attending a particular college, according to Stephan Pollan and Mark Levine in their book "Surviving the Squeeze." There will still be a gap between aid and cost, and unless you have enough discretionary funds available to cover this gap, you must turn to other sources such as unsubsidized parant loans (available through commerical lenders i.e. TERI, Nellie Mae, Sallie Mae, and parent PLUS loans), scholarships, or equity, personal and mortgage loans.
When using commercial lenders, you should be aware that while interest rates are of prime concern, it is also important to look at when the loan pay-back begins. Some lenders require payments to begin 60 days after the check is released. Pollan and Levine suggest the following strategies for reducing bills and coming up with more money:
• apply for private scholarships (see Scholarship Tips and SCHOLARSHIP LISTINGS)
• weigh financial aid offers between schools;
• take advanced placement courses in high school;
• create your own work-study programs;
• shop for tuition breaks;
• attend a community college and transfer after the first or second year;
• become a teacher; some states pay off a portion of student loans for those who teach for four years in their state;
• investigate co-op programs;
• join the military, National Guard or ROTC program;
• The Western Undergraduate Education (WUE) program provides reduced tuition at certain Western State colleges (check with EOC);
• if you're attending college out-of-state, you can attend a lower-priced community college for your first or second years, then transfer into the four-year college or university of your choice;
• investigate your college's residency requirements (for public schools only), then consider meeting them to qualify for lower-cost in-state tuition.
Other research resources
Financial aid can seem complex and difficult to understand. The following sites provide resources that includeeasy to understand explanations and financial aid calculators.
How Financial Aid Works
FinAid – the SmartStudent Guide to Financial Aid
Collegeboard.com – Paying for College
Financial Aid Myths - Don't Believe Everything You Hear
For more EOC financial resources, click on the following links:
Paying for College > Overview
Federal Financial Aid
Scholarshp Tips
SCHOLARSHIP LISTINGS
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