Paying for College: It’s Never Too Early or Late to Start
Using a multi-tiered financing strategy, you can tame the cost factor.
Even though studies continue to show that college graduates earn substantially more money over their lifetimes than their non-degree-holding peers, there’s no getting around the fact that college costs have risen dramatically. High school juniors and seniors around the country will soon begin making their college selections. For students, this often means choosing a school that offers a specific degree program, a world-class sports team or one that just “feels right.” For parents, however, the choice often comes down to cost. Thankfully, several tools and options are available to students and parents as they make this very important, life-changing decision. These tools include:
• Net Price Calculators. Required by the U.S. Department of Education to appear on university Web sites, this tool allows a student to enter basic biographical information and determine the net price of attending an institution. Keep in mind, this is only an estimate of actual costs.
• FAFSA (Free Application for Federal Student Aid). Nearly every student qualifies for some type of federal financial aid, whether it is a scholarship, grant, work-study assignment or student loan. In order to determine a student’s eligibility, every student should complete the FAFSA (www.fafsa.ed.gov). The application determines how much the family is expected to contribute toward college costs. The information is used to assign need-based scholarships. A common mistake for many students is failure to complete the FAFSA, thus missing out on various opportunities for financial aid.
• 529 or College Savings Plans. These plans are special investment accounts designed to help families save for higher education expenses at eligible 2- and 4-year colleges, postgraduate programs, or secondary trade and vocational schools. Funds from a 529 plan cover qualified education expenses such as tuition and books, and certain room and board fees. Most 529 plans are sponsored by a state and offer tax advantages and other incentives that make it easier to save. Some 529 plans, such as Missouri’s MOST, even offer scholarships.
• Scholarship Aid. Scholarships are education funds that do not have to be repaid. Eligibility is based on criteria established by the donor, which may include merit, need or special characteristics, such as ethnicity, major, or geographical location. In 2010–11, University of Missouri undergraduate students received more than $60 million in scholarship aid, both internal and external. Students should never assume they do not qualify for scholarships, as donors place specific criteria on many of their donated scholarship funds. For example, Mizzou has one scholarship that is designated for a student “reared on a farm” in Livingston County with a “sincere interest in agriculture.” In the 2010–2011 school year, MU students were awarded more than $9.5 million in outside scholarships, which are often awarded by local organizations and require formal applications.
• Institutional Aid. Most institutions combine automatic scholarships with admissions applications. These are primarily based on standardized test scores, high school GPA and/or class rank. Students often know within hours of applying if they are eligible to receive these scholarships.
Other scholarships are based on the goals or interests of the institution. For example, MU strives to continue building relationships with alumni. Thus, we have established MU’s Heritage and Global Heritage scholarships that cover out-of-state tuition to students whose parents graduated from Mizzou. It’s important to ask about any supplemental scholarship applications when applying to an institution.
Here are some tips to keep in mind when applying for scholarships:
• Submit as many applications as possible.
• Don’t avoid applications that require an essay; if you thought about skipping it, others probably did too, and you will have a better chance of receiving the scholarship.
• If you’re a parent, don’t take over the application process. Reviewers can tell the difference between a student’s application and a parent’s work.
• Be sure each essay is written specifically for that application; cookie-cutter approaches don’t work.
• NEVER pay to submit scholarship applications; that’s a red flag for scams.
• Check with your high school counselor regularly; scholarship notices come in throughout the year.
Paying for college is within reach if you start planning now and keep an eye out for scholarships and other aid opportunities.
Nick Prewett is director of student financial aid at the University of Missouri.
P | 573.882.6200
E | prewettn@missouri.edu
Return to Ingram's September 2012