Spotted this quick and easy list of five places to find financial aid help today, and wanted to share…
From Yahoo News: If you find the Free Application for Federal Student Aid, known as the FAFSA, intimidating, you’re not alone. Families must fill out the FAFSA every year with their financial information, which is used to determine their eligibility for financial aid, including federally subsidized grants and loans and other sources of financial aid.
Each year, too many families either skip the FAFSA altogether or turn to high-priced consultants for assistance. With a little time and legwork on your part, though, you can file your FAFSA at it was originally intended — for free.
US News released their annual list of the most expensive schools in the country for in-state students, and once again two Pennsylvania schools top the list. In fact, they’re nearly tied–separated by less than $200. Since these schools often offer very limited financial aid, this is a good reminder that students can often make out better financially by choosing a private school that is more generous with aid packages.
What’s it like to survive on an “average” American income? MSNBC recently did an intriguing series of articles profiling families who lived on $50,000 a year—the nation’s average household income.
Now, I’ll say upfront that I’m generally not a big fan of these “can you live on XX?” types of stories, because there are simply too many variables to do a fair apples-to-apples comparison. For example, a young childless couple can live just fine on a tight budget, whereas it’s much tougher for families with several kids. Likewise, a given amount can stretch much farther if you live in the rural Midwest, as opposed to a very expensive metropolitan city.
However, I thought this series did a good job of covering a wide variety of scenarios, showing how vastly different it can be to live on a certain amount, depending on your circumstances.
But back to the basic question of, “Could you survive on $50,000 a year?”
Not if you have a kid in college.
At least, not unless you’re working the financial aid system or have somehow managed to amass a really nice college savings fund.
Our son’s first year at a public university cost us more than $25,000 out of pocket. (That’s just for tuition and mandatory room & board—I’m not even counting books, transportation and other costs.)
A financial aid rep once told me that I really needed to get our household income down to around $40,000 or less to get a decent amount of financial aid. And again, remember, we were paying $25k+ a year to the school, for just one child. In other words, we’d need to be paying more than half of our entire household income—leaving our family of five less than 20 grand a year to survive on—in order to be considered needy enough for decent financial aid.
This is one of those times when it’s particularly tough to be in “the gap,” as I call it—not technically under the poverty level, but still barely scraping by and living paycheck-to-paycheck. What some might call the “working poor,” for lack of a better term (although I’m looking for other suggestions). If you’re really low income—say, living on public assistance—your children will automatically get the maximum financial aid. At the other end of the spectrum, if you’re living comfortably, you should be able to afford tuition bills without too much sacrifice.
But for those in that Land of In-Between, life can seem like a series of tough choices, and this is one of those times. Send your kid to college or keep your house? Go to work, or quit your job so your kid might have a shot at substantial financial aid? Those aren’t rhetorical questions. For those living “on the median” with kids who hope to go to college, that’s the reality.
Something’s wrong with this picture.
(Want to learn more about the financial aid process and how the system works against you? Check out our special reports at FinancialAidLessons.com)
It’s a very good idea to start working on the FAFSA (Free Application for Federal Student Aid) as early as possible. The application for the 2013-14 school year is available now. If you want to get it over with and check one thing off your financial aid to-do list, you can submit your application here. And for tips on getting financial aid, along with lessons we learned the hard way, check out our special reports at FinancialAidLessons.com
I’ve always been a big proponent of starting college directly after high school. My feeling was that taking a hiatus from school would break the student’s stride and would also make them less likely to return to school. I know there are many fans of the “gap year,” but I’ve seen far too many students whose temporary break turned into a permanent thing.
This is especially true in the case of students who get a job which they may need to give up in order to return to school. For a young person who has few (or no) bills, earning even $8 or $10 an hour can seem like a great thing. The thought of giving up that paycheck to sit in a classroom may be tough.
So I really would love to see kids transition seamlessly from high school to college, in a perfect world.
However, I have recently had to rethink my stance on this.
As student loan debt continues to soar out of control, far too many kids enter school before they and their parents have come up with a good plan of how they will pay for it. This will often lead to students signing up for loans without giving sufficient thought as to the obligation they are agreeing to.
As this article says, it may be smart to hold off on heading to school while the family plans out an outline of the best way for them to pay for college. This may involve making some strategic financial moves to increase chances for financial aid, spending more time weighing the best college choice or taking an extra job to save up more for the college fund.
It may also be wise to enroll in a community college for the first two years. This can save you a lot of money, as I discussed in a previous post.
Yes, I still think it’s great to head right off to college—but it’s even better to make smart financial decisions that will put you in the best position for long-term financial well-being.
A good college education is worth the wait.