|
With college costs (room, board,
tuition and fees) ranging from about $11,000 annually at SUNY to $30,000 or more
at private colleges, you may think you have to knock over a bank to provide your
child with a college education. But take heart! Plenty of parents are finding
ways to make college a financial possibility, as evidenced by the growing number
of young people who are continuing their education after high school.
How are they doing it? One of the
first places to go looking for answers is in the high school guidance office.
The guidance counselors are more than happy to talk with parents, explain the
different scholarships and loans that are available, and direct them to various
books and articles on paying for college.
And don’t think you have to wait
until your child’s junior or senior year to start your research and planning.
The more you know and the sooner you know it, the better off you will be.
Plenty of free assistance
One warning from guidance
counselors: Don’t be taken in by unscrupulous operators who want to charge you
money to help you find college financial aid. There’s plenty of free
assistance out there. For example:
Public libraries have educational
sections with college financing information, pamphlets from specific colleges
and Internet hook-ups for online research. Both guidance offices and public
libraries keep copies of the financial aid application form, FAFSA – Free
Application for Federal Student Aid – that colleges use as their formula for
determining financial aid, and applications to federal and state financial aid
programs.
The Internet is also an incredible
resource. A "college financing" search yielded 1,543 sites. One, www.pueblo.gsa.gov, outlines college costs through the year 2017, and strategies
for paying the sometimes shocking fees.
Some corporations or unions offer
scholarships or tuition payment plans to their employees’ or members’
children.
Guidance counselors also recommend
that students and their parents talk with financial aid officers at colleges
they are visiting to get an idea of what financial aid they have available.
What can we expect?
One of the first questions parents
often ask is a very personal one: What can we expect in the way of aid, given
our family income and resources?
Jim Vallee, director of financial
aid at the College of Saint Rose in Albany, said there are no hard and fast
guidelines for determining how much financial aid a family might receive. He
suggested using the need analysis calculator at www.hesc.com, under New York
Mentor. "This will determine the estimated family contribution (EFC),"
Vallee said,
After scholarships and grants are
exhausted, loans become the way to go. The most common student loan is the
Stafford loan. This federal loan allows dependent undergraduates to borrow up to
$2,626 as freshmen; $3,500 as sophomores, and $5,000 for their remaining college
years. Their variable interest rates are capped at 8.25%. The Perkins loan is
awarded to students with exceptional financial need at a 5% interest rate, with
a limit of $3,000 per year for undergraduates.
Parents of dependent students can
take out PLUS loans, the federal Parent Loan for Undergraduate Students, to make
up the difference between the student’s aid package and the tuition cost.
Their variable interest rate is capped at 9%, and payment begins 60 days after
the funds are fully disbursed, with a repayment term of up to 10 years.
NY College Savings Program
New York now offers a College
Savings Program that allows residents to deduct up to $5,000 of annual
contributions – or $10,000 for married couples filing jointly – from their
taxable income to pay for college expenses. Investments are managed by TIAA,
part of TIAA-CREF, a financial management service, and earnings are tax
deferred. There’s no cost to open an account, which can be done with as little
as $25.
There is a 36-month waiting period
to withdraw funds, which can be used at any accredited educational institution
globally. The money is invested based on a child’s age or a family’s comfort
with risk. Two types of portfolios are managed by age, with investments in
stocks and aggressive growth when a child is young, then in more conservative
instruments as the child gets closer to college. There’s also a pure stock
portfolio based on Standard & Poor’s 500, and a conservative,
interest-rate sensitive portfolio that never goes below three percent.
New York’s College Savings
Program started in September, 1998, and as of April 10, 2001, 147,295 people had
contributed $642 million to it. To get an enrollment kit, call 1-888-722-9836,
or log on to www.collegeplanny.com.
>
Back
For
permission to reprint this article, please contact the
Capital Region BOCES Communications Service at (518)
464-3960.
|
