| Strategies for getting college financial
aid |
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For parents, the federal Parent Loan for Undergraduate
Students, or PLUS loan, is an option. As with Stafford loans, the
rates for PLUS loans convert from a variable rate to a fixed 8.5
percent for new loans issued after June 30. The fund is designed
to cover the difference between the cost of admission and the amount
your child receives in financial aid. Take note, however: "Parents
are on the hook for the PLUS loan," says Mark Kantrowitz, publisher
of FinAid.org. "Even if you have a verbal agreement with your
child, it's ultimately the parents' responsibility."
Finally, parents and students requiring additional
funds to cover education expenses are free to explore private
education loans at private lending institutions. But be prepared for higher
interest rates than those programs offered through Uncle Sam. You
can reduce the amount you need to borrow by establishing a monthly payment plan
with your school. Making smaller payments over the course of a year, rather than
one lump sum, enables you to keep funds longer in interest-bearing accounts. Academic
Management Services operates the TuitionPay program, offered at more than 1,500
schools, that allows you to pay monthly. Finding
free money
The holy grails of all forms of financial aid are grants
and scholarships -- awards that do not need to be repaid. Most
are designed to reward academic or athletic excellence, but some are reserved
for students pursuing a particular degree or those who represent an ethnic group.
Needless to say, such awards are highly competitive. These
days, however, finding scholarships for which your child is eligible to apply
is easier than ever. Online databases, including FastWeb.com,
SRN Express,and the College
Board's FUND
FINDER tool, provide free search tools that help identify ones that match
your student's personal profile. "I recommend doing two
online searches, which will make you more comfortable that you haven't missed
anything and less likely to get taken in by a scam that requires you to send in
money with your application," says Kantrowitz. Kantrowitz
also recommends doing a search for small, local awards by reading notices posted
on bulletin boards at your school's guidance office, the public library and outside
the financial aid offices at nearby colleges and universities. "It
doesn't hurt to get the advice of your guidance counselors on how to win these
awards, since they've seen students apply and win them before," he says.
The government offers perks to students, too. See "Education
tax breaks 101" for more. | 
