Wednesday, August 12, 2009

Even As Kids Pack to Go to College, It's Not Too Late For Aid

Earlier today I came across this great USA Today article reminding students and parents that even this close to school season, financial aid is still available for students. The article also offers several helpful tips on how to finance higher education in the tough economy, check it out below.

Few things are more demoralizing than receiving a bill that exceeds the amount of money in your bank account. Especially if your child's future hangs in the balance.

That's the predicament facing many cash-strapped parents of college students as bills for the upcoming semester start to arrive in the mail.

Fortunately, even at this late date, you have options. Among them:

Extended-payment plans. These plans let you pay your tuition bill in monthly installments instead of one lump sum. You'll typically pay a fee of $50 to $100 to set up a payment plan. The plans are provided through colleges and universities, so contact your school's financial aid office for more information.

You don't have to put the entire amount you owe on a payment plan, says Thomas Blair, director of financial aid at Roanoke College in Salem, VA. But paying even a small amount of the balance in monthly installments will reduce the amount you have to borrow, he says.

Federal student loans. Unsubsidized federal Stafford loans are available to all full-time students, regardless of financial need. They carry a fixed rate of 6.8%. For the 2009-10 academic year, dependent students can borrow up to $5,500 for their freshman year. Sophomores can borrow up to $6,500 and juniors and seniors can borrow up to $7,500.

To qualify for a federal student loan, you must fill out the federal Free Application for Federal Student Aid, or FAFSA. You can find the form online at

PLUS loans. If federal loans won't cover all of your costs, you can apply for a federally guaranteed Parent Loan for Undergraduate Students to fill in the gap. Parents are responsible for repaying the loans, but have the option of deferring payments until the child finishes school. PLUS loans carry a fixed rate of 8.5%.

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