Without a formal education beyond high school, a young person’s odds of being able to create a stable career decrease significantly. The average college graduate will earn twice as much income during his or her lifetime as someone with only a high school degree.
A college degree:
- Provides greater opportunities for meaningful and successful careers.
- Allows the flexibility to change jobs and careers due to individual preference or major shifts in the economy.
- Prepares the graduate student to carry on a lifetime of continued learning and growth.
The cost of college today is rising faster than the cost of living! That is a frightening financial worry. Tuition at colleges and universities has been rising at rates two to three times faster than the increases families receive in cost of living raises from their employers. In the last twenty years, tuition has increased by a factor of more than 200 percent, which is three times the increase in earned income for the average family.
Due to these increasing costs, it is so important that parents recognize that they will have to explore every possible means to put their children through college. They will often have to make major financial sacrifices to do so. Many parents must adjust their lifestyle by delaying retirement plans, vacations, the purchase of new cars, or remodeling their home. A large burden of the financial obligation for college has fallen on the student’s shoulders because parents are not always able to help.
In the book “Paying for College – The Greene’s Guide to Financing Higher Education” by Howard and Matthew Greene ten guiding principles are described in regards to paying for college.
Principle One: College is well worth the cost and sacrifices you might have to make. It is a valuable investment in your child’s future.
Principle Two: Begin saving for college as early as possible, but it’s never too late. Savings is the key to all other financial assistance opportunities.
Principle Three: Good students will have many choices. Good grades in strong academic courses create many opportunities for admission and for need-based and merit-based aid.
Principle Four: Do not let the cost of college limit your child’s options. Many of the most expensive, private colleges have generous financial aid programs and there is money available for college if you’re willing to research and apply.
Principle Five: Apply for financial aid; if you will need it, at the same time your child applies for admission. Work with the financial aid officers as a helpful source of information and guidance. They are there to help you manage the costs of college and navigate the complex process around securing financial aid.
Principle Six: Take advantage of the many information resources on need-based and merit-based scholarships. These resources are available to you through the internet, public library, high school guidance counselors, bookstores, and from colleges or college fairs.
Principle Seven: Apply to a broad-based group of colleges and this will create more opportunities for your child to attend a college you can afford.
Principle Eight: Consider your state’s public university system. Look for tuition bargains and special honors programs.
Principle Nine: Consider a two-step college education. Your child can enroll in an inexpensive two-year program that will lead to transferring to a four-year college with the appropriate credits. This will allow time for saving and spending LESS on college expenses.
Principle Ten: Understand and carefully evaluate your financial aid package from each college. Comparisons of the different awards can be significant. Remember the long-term implications of taking out student loans for college and the repayment obligation your son or daughter will have after completing college.
Modified Text from: “Paying for College – The Greene’s Guide to Financing Higher Education” by Howard and Matthew Greene. Published in 2004 by St. Martin’s Griffin.
Saving is a great way to create financial security for college expenses. There are a variety of tools available for saving!
- Saving Accounts are a great way to get started and to reinforce the idea of saving money. Interest rates will vary, so look for the best deal possible.
- College Savings Bonds are bonds with periodic interest. Check the State of Florida website for specific bonds with a fixed payment amount depending on maturity.
- U.S. Savings Bonds are guaranteed by the government and you can pay as little as $25.00 to get started. The interest rate will vary and automatically adjust every six months.
- Certificates of Deposits pay a significant lower interest rate than a mutual fund. This type of investment is secured by the FDIC (Federal Deposit Insurance Corporation). CD’s are considered low-risk investments.
- Mutual Funds are a grouping of stocks and bonds managed by a group of financial professionals. The investment objectives are outlined in their prospectus and can vary from a low-risk to high-risk investment.
- Common Stock investments can be low-risk to high-risk depending on the stock selected and the success of the stock. The pricing can be low to high and the return for the investor can be in dividends and increased appreciation.
- Corporate and Municipal bonds are fixed income investments that generate a predetermined rate of return at their maturity date. Review their maturity dates carefully so that you don’t get a high-risk investment for too long of a period.
The financial aid brochure provides information about options to pay for college. This brochure describes in detail the scholarship and grant programs specific to Florida. It also provides a list of websites to gain additional information about those programs and applications for Federal Student Aid (FAFSA).
If you visit www.floridastudentfinancialaid.org you will learn more about Florida’s specific scholarship and grant programs with associated application instructions and forms. At this same site you can apply directly for the FAFSA – Federal Student Aid website from the above site.
What are the types of financial aid?
| Type of Financial aid |
Brief Description |
| Federal Pell Grants |
Pell Grant is federally funded and is awarded to families who demonstrate high financial need. Current awards range as high as $5,350 per academic year. |
| Federal Stafford Loans |
Stafford loans are estimated and adjusted due to changes in enrollment status and/or federal, state, or college funding. Students considered to be “need-based” qualify for the Subsidized Stafford loan (no interest while attending school). The student grade level determines financial awards. Freshmen receive a lower loan amount and the Junior/Senior level receives the highest loan amounts. |
| Federal Parent Loan for Undergraduate Students (PLUS) |
The Federal Parent Loan program is for the parents of dependent undergraduate students. Parents may borrow up to the cost of attendance minus any other financial assistance that the student is receiving. |
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Federal PLUS Loan for Graduate and Professional Students |
The Loan PLUS program is now available for graduate or professional students. Terms and requirements are the same as for parents. The borrower must complete the FAFSA, must not have adverse credit history, and must have applied for annual loan maxmimum under the Stafford Loan Program. This loan is available based on a disbursement date after 07/01/2008. |
| Federal Supplemental Education Opportunity Grants (FSEOG) |
This grant is available to families who demonstrate high financial need. Normally, the FSEOG is offered along with the PELL grant. The current amount of this grant is $100– $400 per academic year.
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| Federal Work-Study Program |
This is an opportunity for a student to work while enrolled in college. Most of the jobs are campus-based. Through the Federal Work-Study program the student may earn up to the amount of their award by working for an on-campus employer or off-campus nonprofit organization. This is an approved Federal Work-Study job. |
| Federal Perkins Loans |
This loan is available to students who demonstrate financial need. The loan has 5% interest rate, and repayment begins nine months after a student drops below half-time status, or after a student graduates. The current award is up to $5,500 per. academic year and $8,000 for graduate or professional studies. |
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Florida College 529 and Prepaid Savings Plans:
www.florida529plans.com - The Florida College Investment Plan is described in detail on this site. You will find all the specific enrollment and savings information for the Florida 529 plans.
www.florida529plans.com - With the Florida Prepaid College Program, you can lock in at a fixed price – today. It’s guaranteed! The program is very affordable and it can be used at any public Florida university or community college and most private colleges in Florida.
www.smartmoney.com/college/investing - This site provides guidelines and suggestions on how much money to save through the state specific 529 plans.
www.uPromise.com - You are offered a method of college savings based on purchases made for airline frequent flyer programs; member merchants and companies who contribute credits to your personal saving for college accounts when you use their services or products. There is no charge for the site registration.
Apply for Financial Aid early – don’t think that you won’t qualify!
Even if you don’t think you will qualify, still complete the FAFSA (Free Application for Federal Student Aid). This form is the very first step for ALL TYPES of federal aid in grants, scholarships, and work-study on a state-to-state basis.
Search for scholarship and free funding for college
Use the following website www.finaid.org to search for available monies through scholarships and grants.
Another suggestion is to accumulate credits before college.
Your son or daughter can save in tuition by earning college credits while still in high school. Take advanced placement courses or take courses at the local community college to get a head start on your college career. You may be able to place out of “required” courses based on the grades from the advanced placement courses.
Live at home during college or the first two years of college
Obviously, you can save money if your son or daughter lives at home. Granted they will miss out on some of the “traditional” college experiences. Another idea is to have your student share an apartment with fellow students or high school classmates if they all are attending the same college.
Apply for “life experience” credit
If your son or daughter is returning to college after being in the workforce or you decide to attend college after being employed for years; they’re maybe an opportunity to obtain college credit for your employment life experience. Some employers administer their own tests and standards while others allow you to take the CLEP (College-Level Examination Program) and PEP (Proficiency Examination Program) tests for college credit.
Other tips
Have your son or daughter get a part-time job to help cover some of the miscellaneous expenses they will incur while attending college. On campus jobs are a great source of employment, have your student look into becoming a campus resident advisor. This particular job often requires that the student employee advise and counsel other students living in on campus dormitory. One of the biggest benefits to this job is that most often the resident advisors receive free room and board for the dormitory to which they advise.
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