Thursday, April 29, 2010

Tips for Paying for College

Getting admitted to your choice college is only half the battle; the other half is figuring out how to pay for it. The competition for resources can be stiff, especially in tough economic times. The most important rule to planning so that you can take advantage of financial aid is to start early.

1. Start researching aid possibilities sooner rather than later. The competition for aid increases when the economy is weak. Those who plan ahead for the aid process will do much better than those who procrastinate and miss deadlines.

2. Take steps that improve your aid eligibility. For example, if someone in your family has lost a job, avoid the temptation to spend any assets in the retirement plan. In addition to the likely early distribution penalties and additional income taxes, the higher income will reduce your aid eligibility.

3. Apply for financial aid no matter what you think of your financial circumstances — good or bad. Applying by the priority deadlines, even if you think you won’t qualify, will help you if your finances take a turn for the worst. Some schools will only accept requests for reconsideration due to a decline in income from those students who filed for aid on time — even if they were turned down initially.

4. You should still not initially rule out any school as being too expensive. Many colleges — especially the private ones — have increased their aid budgets to attract applicants whose families are now more price resistant given the state of the economy. But have a back-up plan in case the aid is not enough to attend those pricier schools. Most likely this will mean also applying to a public institution in your home state and/or any school where the student can live at home instead of paying for room and board.

5. Pay less for a four-year degree. One way you can save on costs if you attend a community college for two years and then transfers to a pricier school for his or her remaining two years. However, be sure that the college where you want to transfer will accept the credits from the community college.

6. Take as many AP courses as reasonably possible and prepare yourself well for the AP exams. High scores on AP exams can save considerably on college tuition. Many colleges award course credits for them, which can reduce the amount you need to pay in tuition.

7. Apply strategically to colleges. If you exceed the school’s admission criteria, you are much more likely to get a better aid package than a marginal applicant. Be sure to prepare for the standardized tests like the SAT or ACT.

8. Be realistic about how much debt you and your family can incur, given the starting salaries for your probable major and career path.

9. If you have to borrow, pursue federal loans first and avoid having taking private loans at all costs.

10. If your circumstances have a taken a turn for the worst, request additional aid. But expect that the college may require considerable supporting documentation.

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