for college: best strategies
for the year
Find out when you must begin paying off the loan. Can payments be deferred while a student is enrolled in college or graduate school? If so, will delaying payments cost extra? How much more?
Does the loan
offer discounts, such as an
on-time payment break? Robert
Shireman, president of Project
on Student Debt, says borrowers
can't even have one late payment,
nor can they adjust their repayment
schedules, to qualify for on-time
discounts. As a result, he says,
few actually do end up getting
There are other considerations, too. Be sure you can temporarily defer or reduce loan payments in the event of some sort of fiscal hardship, such as illness or job loss. And, finally, never take out a loan without first finding out how much you can borrow without adversely affecting your eligibility for other forms of financial aid.
getting a private loan could
require the financial aid professional
to adjust other portions of
their student aid award,"
says Brett Lief at the National
Council on Higher Education
Loan Programs. Bottom line:
Ask the college's financial
aid expert for help when dealing
with private lenders.
Seek help from individuals who
specialize in college financing.
Institute of Certified College
Planners, for example, certifies
advisers who stay up to date
about tax strategies, financial
aid program changes and new
twists to investment plans that
affect college savers.
Stay on track
Finally, don't forget that even
the simplest steps can have
a big impact on college costs.
Only four in 10 college students graduate in four years. Motivate your student to be in the minority.
In some cases, there's good reason for the delay. Individuals may take time out to work through (and pay for) school. But in other cases, students extend their stay in academia because of lost credits in a transfer to another institution, a change in major or simply because they goof off.
That costs a bundle -- up to 25 percent more for every extra year.
If your genius
is on the slow track, it may
be time to put some fire under
his or her feet. Students can
take extra courses during the
regular semester or over the
summer. He or she can sign up
for summer school at a local
community college, which may
be more affordable, and transfer
It can start as
early as high school, where
students can sign up for rigorous
advanced-placement classes that
can be counted toward college
Finally, don't downplay the power of parental persuasion.
Says financial planner Dee Lee, author of Let's Talk Money: "We told our kids we'd pay for their room, board and tuition for four years, but they'd be on the hook for everything else."