With a year of tuition and fees, room, and board at a public college hovering at an average of $10,636 for the 2003-2004 school year, and costs averaging $26,854 for private schools, it pays to apply for scholarships, grants, loans, work-study programs, and other available assistance.
Your first order of business is to apply for financial aid at colleges to which your child has been accepted. To do this you must file a Free Application for Federal Student Aid (FAFSA). This is the all-important disclosure of your personal finances that everyone -- schools, lenders, the government -- will want to see. To apply, you'll need information about income (including tax returns) for the year prior to the school year. For example, for the 2004-2005 school year, you will need 2003 information.
Joseph Heuston, the director of financial aid at California State University, Fresno, says all families should fill out a FAFSA, even if their income is high. The form may trigger other types of help that aren't tied to income levels.
FAFSA forms are available from your high school or college, or call the Federal Student Aid Information Center at 800-433-3243. You can also find the form online at the FAFSA Web site (www.fafsa.ed.gov).
Covering all college costs often requires a blend of sources. In addition to work-study programs, there are a number of grants, loans, and scholarships available. Grants (like scholarships) are best because they don't have to be repaid. The two most popular federal programs are the Pell Grant and the Supplemental Educational Opportunity Grant, or SEOG. These school-administered grants are awarded by financial need, with application deadlines ranging from January to March.
Between state and federal government programs, virtually everyone can qualify for a college loan, regardless of income. Stafford loans go to students, while parents take out PLUS loans. Applications for either type of loan are made through the college or a lender of your choosing, and the federal government stands behind the loan.
In addition to traditional sources, search for other types of funding that are often overlooked.
For example, tuition money is regularly given away by local civic groups, churches, even merchants. Often these awards hinge on the student's community involvement, and not just academic achievements.
More and more, philanthropists are setting up scholarships but handing over the administrative tasks to community foundations. The Pittsburgh Foundation, for example, works to improve social welfare, the arts, and culture in and around Pittsburgh. For the 2004-2005 school year, it will disburse some $1.8 million to students from Pittsburgh and surrounding communities, or for students heading to Pittsburgh-area colleges.
Finding these sources may require some detective work on the parents' or students' parts. Call local civic and fraternal organizations, the local Chamber of Commerce, and school counselors to ask if they're aware of local scholarship funds.
Workplace scholarships are usually tied to high grades or a competition. But some employers are more liberal. For example, new union contracts at Ford Motor Co., General Motors Corp., and Chrysler Corp. have made available $1,000 yearly grants to college-bound children of more than half a million workers or retirees. There's neither an income nor a scholastic test.
You can scout for financial aid and, in many cases, apply for it on the Internet. A company called FastWeb will do a lot of the heavy lifting for you -- and it's free. The service has compiled 275,000 scholarships, and after you fill out an online form, you will be matched with money sources.
Through FastWeb, Shanesha White, of Brooklyn, New York, applied to a foundation that awarded her $2,000 to study at Tufts University in Massachusetts.
Regis University isn't in the habit of giving away diplomas. But for any of its 2,000 undergraduate students who are willing, the Denver-based university promises them an on-campus job with pay of up to $2,400 a year that they can use to offset living expenses or tuition.
If your child is a photographer and interested in a work-study program, for instance, let the college public relations department know that he or she has a skill the college could use. That's the advice of Sam Speck, president of Muskingum College in New Concord, Ohio.
Speck says colleges usually learn of a student's talents via their high school record. But what happens if the student started a garage band and became an accomplished musician, something that doesn't show up on the transcript? He suggests arranging a meeting with a music professor at the school that interests you.
"Make sure that department heads know about the student's skills" so they can be scholarship and work-study advocates for you, Speck says.
If your child is lucky enough to score a big scholarship, congratulations. Now, check the fine print. Many awards are made on an annual basis and renewed only if a certain grade point is maintained. What happens if the student stumbles one semester? Also, is the scholarship automatically renewed? Is it for a specific dollar amount, or will it increase to match the escalating rate of tuition?
And finally, if it comes down to paying your own cash, consider one of several organizations that will enable you to pay tuition in interest-free monthly installments.
One such company is Academic Management Services of Swansea, Massachusetts. Instead of writing one big check each semester, you spread out the cost over six to 12 months. You send payments to the company and it deals with the college. Services generally charge $50 to set up the account. Call 800-635-0120. Also, many colleges offer their own installment plans.
Help is on the way with fresh new tax deductions, tax credits, and incentives to invest money specifically for college.
Credits are the best, since they mean direct reductions of your income tax bill. All of the credits have some sort of income phaseout limit so you get less tax help as your income rises. Here's a rundown on the new laws:
If you claim one of these tax breaks in a tax year, you may cut off access to others, so be sure to review your options with a qualified finance professional. Also check with a tax professional for more information on credits and deductions.