For many high school seniors and their parents, the college application process begins in earnest this month. Fall is the time for students to consult rankings, narrow down their list of choices, draft essays and ask teachers for letters of recommendation.
What most students and parents neglect to start now, though, is creating a plan to pay for college, not just gain admission. Here are some proactive steps college applicants can take in the September to December time frame to get an early start on financial aid, with the goal of limiting the need for student loans.
September
This is the time to apply for scholarships. Like grants, scholarships provide money for college that doesn’t have to be repaid, which makes them preferable to education loans. Scholarships come in many different shapes and sizes, and from a variety of different sources. In addition to search engines, other places to look include churches, clubs, organizations scholarship foundations in your state or parent and student employers.
[Learn more about finding college scholarships for you.]
Speaking of part-time jobs, now is a good time to get one if you’re not working already. Students who work for the federal minimum wage of $7.25 an hour for 15 hours a week could earn around $5,600 in one year, before taxes — that could take a good chunk out of next year’s tuition bill.
One word of caution on receiving scholarships from an outside source is that they could reduce the size of your financial aid package. College financial aid policies vary on how they treat outside scholarships, so check with your school for specifics.
October
The Free Application for Federal Student Aid can’t be filed until Jan. 1, but families can get a head start by using the FAFSA4caster to estimate what federal aid they’ll receive and their expected family contribution.
This is a good opportunity to play with different scenarios and perform the exercise of filling the gap between college costs and the amount of financial aid you’re likely to receive.
[Parents must think hard before borrowing money for a child’s education.]
For example, let’s say your school costs $20,000 per year and the FAFSA4caster predicts you’ll receive a Pell Grant for $2,000, a federal student loan for $5,000 and federal work-study funds of approximately $1,000. That means you’ll have a $12,000 gap to fill, and families must consider how to find this money.
The college may offer an institutional scholarship or grant, but if it doesn’t, you must think about options such as withdrawing savings, calculating possible part-time employment earnings, finding outside scholarships or borrowing private loans to cover costs. This is also a good time to weigh applying early decision or early action. Early decision is binding, whereas early action will still allow you to compare financial aid awards.
November
Begin creating a calendar of financial aid deadlines. There are three sets of deadlines — federal, state and institutional — that you need to know about. The deadline to file the federal FAFSA form is June 30 for the academic year beginning in September, but don’t wait until then as the schools you are applying to will use your FAFSA results to determine your financial aid package. File the FAFSA as soon after January 1 as possible.
The state you reside in may also offer grants, scholarships and no- or low-interest loans, often on a first-come, first-serve basis, so be sure to apply well before the deadline. Missed deadlines can mean missed opportunities for the best types of financial aid.
The colleges you apply to will also have their own financial aid deadlines, and some may require additional applications besides the FAFSA. Take time now to familiarize yourself with the financial aid process for each school you applied to.
December
The holiday season is the perfect time to ask for donations to your college fund as a gift. Another idea is talking with relatives about early distribution of inheritance toward your education, as some people would be happy to pass on those inheritance funds when you really need it rather than wait until years down the road.
Relatives can either give the money to your college directly when the time comes, or fund your 529 savings plan if you have one.
This is also a great time to figure out your backup plan if you get in to the school of your dreams but they don’t give you enough financial aid. You may want to research some alternatives, like enrolling in a less expensive institution for the first year or delaying your admission for one year while you work in a national service program.
For example, AmeriCorps grants the Segal AmeriCorps Education Award to members who complete a full-time term of national service within 12 months. Some schools will even match the Segal Award with their own funding.
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Make a College Cost Plan to Limit Student Loans originally appeared on usnews.com
