How to fund College – My Financial Fair

Welcome to my blog How to fund College

Who in their right mind would have thought that college could of gotten so expensive? Last time I looked the average price of a State School topped $32,000, out of state $54,000, and the private schools like Notre Dame over $72,000. By the way, just so you know those amounts are per year. Ouch!!!!

The next question is usually how to fund that massive amount of tuition and room and board. What are you going to do, and how will you do it.

I find that about 5-10% have saved enough to pay in full, and 40% have saved something, but will need extra funding along the way. That means that a full 55% have saved nothing and need all the help that they can get.

Her are several ways to pay for college both traditional and non traditional.

The Pell Grant

If you make less than $60000 a year you may qualify for some free money like $5000 grand to be exact. You will need to fill out the FAFSA form: Free Application for Federal Student Aid. Today I believe FAFSA is over 129 questions about every aspect of your financial and family life.

Stafford Loan

Stafford loans are provided to just about everybody going into undergraduate school. There are two types of loans subsidized and unsubsidized. Subsidized means the government pays the interest until you graduate. The second means interest continues to accrue while you are in school. Freshman receive $5500. Sophomores receive $6500, and Juniors and Seniors receive $7500 each year. Payback usually starts 6 months after you graduate unless you can get a deferment. Parents do not have to pay these loans back as they are the students responsibility to pay back over 10 years.

Parent Plus Loans

Parent Plus Loans are generally made by institutions like Sallie Mae, Wells Fargo, and Discover Card. They are variable rate loans that a parent has to cosign on. Payments start immediately and there is no deferment. If the student defaults Mom and Dad are on the hook for the loan. You want to minimize these as much as possible

Outside Scholarships

Unfortunately outside scholarships represent only 3% of the college funding equation. Look at places like Fast Web to apply for these scholarship. Think about applying for 60-100 scholarships in these categories. Most are in the range of $200 to $500, but they can add up.

University or College Level Scholarship

These scholarships are the place to concentrate on, as most college money is given here. These scholarships can be need based or merit based, but you must fill out a FAFSA.