Associate Vice President for Student Affairs and Director, Office of Student Financial Services—The University of Texas at Austin
**For more information on financial aid at Thomas College, please contact our SFS (Student Financial Services) office directly at 207-859-1105
If you're feeling daunted by the idea of paying for a college education, you're not alone. The good news is that you can get help—all you have to do is ask (and fill out a FAFSA). Financial aid is widely available to help families manage the cost of college, and anyone who has even a hint of concern about footing the bill should apply. Never just assume you won't qualify, because there are options that are open to anyone and everyone (believe it or not, there are programs out there that even Bill Gates would be eligible for). It's free to apply, so you've got nothing to lose.
FREE MONEY
The most desirable forms of financial aid are scholarships and grants, which are essentially "free money"—funds given to students for college that don't ever need to be paid back.
Scholarships:
These are generally awarded for merit in
academics, athletics, or a particular field of
study. Some are based on past performance (like
a student doing incredibly well on the PSATs),
and some are based on future performance (like a
talented drummer joining the college marching
band). More specific private scholarships can be
given based on anything from artistic abilities
to ethnic background to religious affiliation.
The funds awarded vary greatly from one scholarship to the next, and it requires some investigative work on the student's part to seek out the appropriate ones. The Internet is a good place to start searching—there are a variety of Web sites (like www.fastweb.com or www.petersons.com) that have searchable listings. High school guidance offices, university financial aid offices, community organizations and private business are also worth looking into for scholarship opportunities.
Grants:
A whopping 90 percent of financial aid comes
from the federal government, and part of that is
awarded in grants—another form of financial aid
you don't have to repay. By filling out the Free
Application for Federal Student Aid (FAFSA),
you'll immediately be considered for grant
eligibility. Here are a couple of the grant
programs most widely used by Texans:
• Pell Grant—The Pell is the nation's largest grant program, and it can be used at any school. This is a need-based grant, and the maximum award amount is just over $4,000 per year—all eligible students will automatically receive the amounts they qualify for.
• TEXAS Grant program—Texas has a few state grant programs, and this is the biggest. It's available to students who've graduated from a Texas high school (with a recommended curriculum) and plan to go to a Texas college. This is a need-based award that can cover the full cost of tuition at a state school for those who qualify.
SELF-HELP
The other forms of financial aid are the "self-help" types—loans and work-study. Since everyone qualifies for some version of these, they're usually good options for students who aren't eligible for grants or scholarships.
Loans:
Loans make up about 65 percent of all financial
aid each year, and there are plans to fit
virtually every need. Of course, loans must be
paid back eventually, but they are a great way
to finance an education that you might not
otherwise be able to afford. You'll find out
which ones you may be eligible for simply by
filling out the FAFSA. Here are a few of the
most popular loan programs:
• Subsidized Stafford Loan—This is a subsidized federal loan for students with need. The biggest advantage of this loan is that the government pays the interest on the loan while the student is in school, which saves a nice chunk of change in the long run.
• Unsubsidized Stafford Loan—The difference with this version of the Stafford loan is that interest does accumulate while the student is in school (and it's not need-based, so anyone is eligible). So even though the interest rate is low, the student is responsible for all those charges. But repayment can be deferred until after graduation on both Stafford loans, and they both provide flexible cancellation provisions.
• Perkins Loan—The school itself is the lender for this fixed-interest, need-based federal student loan. Both undergraduate and graduate students are eligible—the only drawback is that there are fewer funds to go around for the Perkins loan than the limitless supply for the Stafford loans.
• PLUS Loan—This is a non-need-based loan for parents from the federal government—and it's capped only by the cost of education. That means that parents can borrow enough money to cover all tuition and fees for any school in the country. The interest rate is very low, but it does start accumulating immediately. Basically, even if you qualify for nothing else, you can still get a PLUS loan (as long as you don't have bad credit).
• Alternative/Private Loans—There are a wide variety of alternative and private loans that should fit virtually any circumstances. From state-managed plans like the College Access Loan to loans from private lenders, these are helpful for bridging any aid gaps (or for paying for unusual programs like studying abroad). Although these will have higher interest rates than the government plans, so looking into getting a PLUS loan first is usually a good idea.
Work-Study:
The Federal Work-Study Program provides jobs
(usually on campus) for students with financial
need—allowing them to work part-time to earn
money to help cover college costs. The best
thing about participating in work-study is that
employers know that their employees are students
first, which means work doesn't get in the way
of school. Studies have even found that students
who work on campus generally have better GPAs
and graduate at a higher percentage.
OTHER PAYMENT OPTIONS
Of course, traditional financial aid is not the only way to fund an education. If you start planning early, you can take advantage of Coverdell Education Savings Accounts and the two types of Section 529 plans—college savings plans and prepaid tuition plans (like the Texas Tomorrow Fund, which is closed now but may start again at some point). For more short-term funding, you can explore home equity loans, IRA withdrawals and tuition tax credits.
There's no way to know which type of financial aid works best for you until you apply. So the earlier you fill out the FAFSA, the better (starting January 1st of the student's senior year in high school). With billions of dollars of aid handed out every year, a college education is something anyone can afford.
