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10 financial aid pitfalls |
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If Stafford loans aren't enough to cover the total cost of college, parents can help out with PLUS loans. The alternative: Students should shop around. College loans from private lenders vary tremendously in terms of required fees, loan limits, interest rates, eligibility requirements, repayment terms and where the money can be used. Before you sign on the dotted line, Barnett recommends getting the facts about the total amount you'll have to pay back (fees and interest included), how long you'll have and what happens if you miss a payment or need to take out more. Once you've sized up a few lenders, run your numbers through the FinAid.org's Student Loan Comparison Calculator for apples-to-apples comparisons.
8. Earning too much
Sound impossible? Guess again. The federal government expects dependent
students to contribute a significant portion of their income toward
their higher education. As of July 2007, dependent students may
earn up to $3,000 ($2,550 before July 2007) without any financial
aid repercussions; however, for every dollar over that amount, students
will lose $0.50 in aid eligibility. "You're better off with
a work-study job for that reason," says Chany. "Work-study
earnings aren't considered income that affect eligibility, whereas
a job that you take outside of work-study, that's going to affect
your aid."
In addition to work-study positions offered at your
college, Americorps stipends, as well as the $4,725 educational
reward participants receive upon completion of the Americorps program,
are also FAFSA-exempt. To bank as much as possible without losing
a dime in financial aid, earn the big bucks during your freshman
and sophomore years in high school, then scale your hours back and
blow your earnings on supplies you'll need for school.
9. Neglecting your aid officer
Though aid officers can't radically alter a school's financial aid
packaging policies, they can help adjust your award package if you
have special financial circumstances. "On a financial aid application,
everything fits into a box and if you have something in your life
that doesn't fit into the data on the form, you need to let a school
know about it," says Barnett.
"For example, the FAFSA does not do a good job accounting for out-of-pocket medical expenses, but if you call a school and let them know that you have these expenses, they may be able to make some adjustments that could affect the financial aid package." A significant reduction in parental income from one year to the next, death in the immediate family or a separation or divorce could potentially qualify you for a recalculation of your aid package.
10. Ignoring alternative aid
If both the federal government and your future college leave you
high and dry in the financial aid department, investigate alternative
sources of funding, such as tuition reimbursement programs through
work, loan forgiveness programs and educational reward opportunities
offered through Americorps, the Peace Corps and Teach for America.
Rogers also recommends checking out fellowship programs through
such organizations as the Institute of International Education and
the Woodrow Wilson National Fellowship Foundation.
"Fellowships are great because they're not as
well-known and are a little bit less competitive than national scholarship
programs," says Rogers. For more information on available fellowship
programs, consult faculty members in your program of study as well
as national professional organizations.
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