College Grant Money

It is expensive to get a proper education. That’s why government is doing everything it can to help those students in need. By providing them with various student aids from jobs to scholarships and college grant money, the government is in effect giving these students a chance to get the education they deserve. But what is grant money? And how is it different from student loans and scholarships?

College grant money is actually different from a student loan. One difference is that when you have qualified for a grant, you no longer have to pay back the money you receive. On the other hand, when you qualify for a student loan, you are obliged to repay the money within a specified period, depending on what has been agreed upon between you and your loan provider. Because of that, parents and students alike prefer college grant money to student loan. College grant money is essentially free money.

To calculate the amount of college grant money you receive, most colleges and grant programs factor in your parents’ income plus the average cost of college. The result is then a basic estimate of how much money you ought to receive from your grant.

Most college grant money programs fix a certain amount which they then send to the colleges and universities where the grant is offered. A student with a grant may either receive the money in checks via posted mail or the college would automatically credit the amount to the student’s account.

If you want to be considered for federal financial assistance and receive free college grant money, you

must complete the Free Application for Federal Student Aid or the FAFSA. The quickest way to do this is online at the FAFSA.ed.gov website. The FAFSA can only be filed no earlier than January 1^st of the year you will be attending.

However, be wary of the dates on which you will be filing for college grant money. Sometimes, the deadlines announced by the federal student aid programs and your college of choice may differ. Just to be safe, file your application way before any of the dates.

Besides the FAFSA, there may still be other forms you will need to submit. If you are an incoming freshman, you may also need to complete the CSS Profile Application which is required in many private colleges. Your CSS profile will give administrators a broader set of data from which to derive your eligibility for institutional need-based assistance. Generally, the Profile application becomes available in the middle of October. You can register and apply online at CollegeBoard.org.

With the use of the processed data from either the FAFSA or the CSS Profile, colleges determine your eligibility for college grant money by using your household, demographic, and financial data as basis.

How to Save Money and Time Completing the FAFSA   

Short on Cash for College? Here’s Help

(ARA) – Even in a slowing economy, high school students graduate and go to college. But when your bank account is already strained, adding thousands of dollars in tuition to the mix can be a terrifying thought. Parents and students don’t have to shoulder the burden themselves though; financial aid for those who qualify is available if you’re persistent and know where to look.

The first stop on your college financing journey should be to meet with the financial aid advisor at the school your child will be attending (or hopes to attend). Student and parents should meet with the advisor, who acts as an advocate to get the best funding package to fit each student’s situation.

When a student applies to a university, they will typically receive a financial aid packet that includes the Free Application for Federal Student Aid (FAFSA). This is the key that unlocks the financial aid process and gets a student into the system. The FAFSA can be filed any time during the year, but the process should start as soon as parents receive W-2 forms in January. You can fill out the FAFSA online at www.fafsa.ed.gov. It is crucial that the form be filled out correctly, so don’t hesitate to stay in contact with the school’s financial aid advisor if you need guidance or have questions.

The FAFSA covers state and federal aid, but you shouldn’t stop there. Colleges and universities provide millions of dollars in scholarships each year and the financial help they can provide shouldn’t be underestimated.

DeVry University, for example, offers scholarships for students who fall into many different groups, including those nominated by a high school guidance counselor, educators, veterans and many others. Umeko Poole is a student at DeVry University in Arlington, Va., majoring in game and simulation programming.

“I received the 21st Century DeVry grant,” says Poole. “The wonderful thing about this grant is that it enabled me to register for more classes. Taking more classes will help me to graduate a lot sooner.”

When it comes to scholarships, don’t discount family ties. Shannon Taylor is a student at DeVry University, Raleigh/Durham, N.C., and received a full AMVETS scholarship because her father was a Vietnam veteran. “The DeVry scholarship has helped me to pursue my dream of a college education because the amount of the scholarship was $9,000 off the total amount of my education,” she says. “It also gave me the courage to apply for more scholarships that I qualify for.”

To apply for scholarships, some private colleges and universities also require additional forms, such as the PROFILE, which is administered by the College Scholarship Service, the financial aid division of the College Board. Many private institutions require the form to determine a student’s eligibility for non-governmental financial aid like loans, grants and scholarships.

Even if you’ve been through the financial aid process before and have been turned down or have come away disappointed with your award, don’t give up. Apply for aid every year even if you think you don’t qualify. Situations can change and while a student may not have been eligible last year, this year could be a different story.

When it comes to college financial aid, be enterprising and use all the resources at your disposal. For more information on financial aid and scholarship opportunities, visit www.DeVry.com.

Courtesy of ARA content  

Parents - Paying for College? Do the Math First

(ARA) - In these challenging financial times, parents make certain sacrifices to ensure they can navigate the crunch and provide their children with the things they need most. Given the frequent need for sacrifices when it comes to paying for college, parents owe it to themselves to make sure they focus on value.

Securing the right education at the right price means “doing the math” to determine the real cost of a college education. While the reality check may not be pleasant, it can lead to considerable money-saving decisions when it comes to funding a child’s college education.

A few smart, simple rules can help families determine a realistic number to start budgeting for.

Math Rule 1 – Know Your Estimated Total Costs
Tuition is just one part of the total cost of college. It’s important to factor in books, meals, housing, transportation and other expenses (even decorating the dorm room) when making a college financial plan. Your school should be able to provide helpful information on costs. Meanwhile, here are a few insights that may help:

* Four-year public college – If you’re in-state, the average budget is about $18,000 per year, of which tuition and fees are $6,185. The average out-of-state budget should be about $28,000, of which tuition and fees are $16,640. Students considering a public college should be mindful that tuition and fees are approximately one-third of their total budget.

* Four-year private college – The average budget should be about $35,000 per year, of which tuition and fees are close to $24,000. Students considering a private school should consider their tuition and fees as just over two-thirds of their total budget.

* Two-year college – The average estimated budget for a two-year college is about $13,126 per year. Tuition and fees are just $2,361 of that amount. Students considering a two-year college should understand that tuition and fees are approximately 20 percent of their total budget.

Math Rule 2 – Know the Impact of One Percentage Point of Interest and Shop Around for the Best Rate on Student Loans

If, after determining the total cost, you and your child decide you need to borrow, keep in mind that even a small change in rate can make a substantial difference in the overall cost of a student loan. For example:

* A $10,000 private student loan that has an average percentage rate (APR) of 8.69 percent will cost $20,512 in interest if you defer payment until after graduation.

* Meanwhile, a $10,000 private student loan with an APR of 6.92 percent will cost $14,797 in interest if you defer payment until after graduation.

In other words, a less-than-2-percent difference in the rate of interest on a $10,000 loan translates to a $5,700 difference in the amount you’ll have to repay.

Math Rule 3 – Understand the Impact of Your Repayment Decisions

Using the same examples above, recalculate the interest payments if the borrower starts repayment on the student loan immediately.

* The first loan’s total interest owed is reduced to $11,056, a savings of nearly $9,500 in overall interest paid.

* The second loan’s overall interest amount paid reduced to $8,420, a nearly $6,400 difference.

Because payments need to be made consistently, it may not be realistic for many students to start repayment immediately. However, knowing that interest accrues during the deferment period and that you have to make it up by paying it back later should help parents and students make smarter borrowing decisions.

Student loan company MyRichUncle offers handy tools for prospective borrowers. One tool, called the APR Monthly Repayment Calculator, provides student loan borrowers a new process where they can view examples of private student loans and repayment from several different vantage points, including the cost difference between different repayment terms, different repayment options and the impact of different interest rates on the overall cost.

For more information on student loans and for online tools, visit www.MyRichUncle.com.

Courtesy of ARA content 

Seven Common Credit Myths Dispelled

(ARA) – With the economy reeling and home loan rates at a nine-month high, lenders are scrutinizing everyone’s credit history like never before. Yet, many Americans don’t realize the impact of late payments on their credit score and their finances.

In fact, mortgage loan delinquency reached a national average high of 3.23 percent for the first three months of 2008, according to Trend Data from TransUnion.

“Being knowledgeable about your credit standing is becoming increasingly more important by the day,” says Lucy Duni, vice president of TrueCredit.com. “Businesses, ranging from insurance companies to wireless providers and some employers, are now reviewing consumer credit information as a routine part of their application processes.”

When it comes to credit, knowing fact from fiction and understanding how to act is critical. Here are some common credit myths that may be preventing you from engaging in effective credit management:

Myth: My score will drop if I check my credit.

Fact: Checking your own reports and scores is considered a “soft inquiry” and has no negative impact on your credit score.

Myth: Reviewing any one of my three credit reports occasionally will tell me everything I need to know about my credit standing.

Fact: Occasional monitoring will give an incomplete snapshot of your credit standing. You should, instead, check all three of your credit reports and scores frequently throughout the year because the information and scores contained in each of those reports can vary at any given point in time.

Myth: There’s only one score that all lenders use to determine my credit-worthiness.

Fact: There are literally hundreds of different scoring models used by lenders in the marketplace today.

Myth: Closing old credit card accounts will clean up your credit reports.

Fact: Some people advocate closing old and inactive accounts as a way to manage their credit. In most cases, closing your older accounts will make your credit history appear shorter, which can negatively impact your overall credit standing.

Myth: Once you pay off a delinquent loan or credit card balance, the item is removed from your credit report.

Fact: Negative information such as late payments, collection accounts and bankruptcies will remain on your credit reports for up to seven years. Certain types of bankruptcies stick around for up to 10 years. Paying off the delinquent account won’t remove it from your credit report, but it will update the account to indicate it as “paid.”

Myth: If I don’t pay a medical bill on time because I believe it is incorrect, I can’t be held accountable.

Fact: If you fail to pay a medical bill in a timely manner, the delinquent payment may be reported as late to a credit bureau. If you believe a medical bill you have received is wrong or was sent to you in error, it’s best to contact the provider to resolve or discuss the matter prior to the bill becoming past due.

Myth: The “credit bureaus” report people as having either good or bad credit.

Fact: Credit reporting companies compile information that is provided directly and voluntarily by consumer lenders. If you have a credit card, home or auto loan, or make other monthly payments, details of your payment track record on these are likely being reported by those parties.

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