College Financing Advice

By Mike Hughes

Earning financial aid to help pay for college begins by learning how to navigate through the college finance system. First, it is important to know what kinds of aid are out there. While it can be difficult to qualify for federal need-based aid; other options include student loans, via government and private channels, merit scholarships, community scholarships, grants, and even sponsorships. Second, it is important to submit one’s FAFSA as soon as possible (even as soon as January 1) in order to receive the best chance of securing financial aid. Third, do not rush through filling out the FAFSA because it is very easy to reduce one’s eligibility simply by filling out the form incorrectly. Fourth, it is necessary to reduce cash balances by paying off debt, which will improve eligibility and reduce one’s cost of living at the same time. Finally, students should keep their options open.

In terms of gaining information about financial aid, there are five financial aid tips: 1. Consult your school’s financial aid office for advice. 2. Look everywhere for advice. 3. Go public before you go private. 4. Apply for scholarships and state assistance. 5. Track your paperwork and details.

Finding trustworthy lenders is another problem students and parents face. One issue is the preferred lender problem. Colleges provide students with a preferred lender list consisting of financial institutions that offer lower rates and revenue-sharing deals to college. Generally this is beneficial to students; however it is important to note that financial aid directors have been accused of receiving questionable consulting fees or paid trips for high placement on the list. Politicians have also been able to offer solutions to this problem by proposing new programs or encouraging schools to do private lending themselves. All in all, the best option is for students and parents to protect themselves through intensive research and an understanding of the types of programs or loans and their alternatives. Additionally, understand the loan agreement to get the best deal possible.

Sources:
http://www.mortgageloan.com/college-financing-2009-tips-for-getting-aid-2913

http://www.mortgageloan.com/five-financial-aid-tips-1484

http://www.mortgageloan.com/student-loans-who-can-you-trust