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Free Money for College: Dos and Don'ts

Feb 28, 2012 11:55:00 AM

When seeking free money for college, there are a few guidelines you will want to follow:

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Topics: Scholarships for High School Students, College Financial Aid

Don't "Get it Over With" When Signing for College Loans

Feb 23, 2012 11:21:00 AM

Have you found that when it comes to paying for college, you just want to "get it over with?" While this may seem like a good idea at the time - quickly coming up with a method for paying the tuition bill before it is due - you may regret it later. 

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Topics: Borrowing for College

How much should I borrow for college?

Feb 17, 2012 11:37:00 AM

As of 2010, the average American student borrowed more than $23,000 while obtaining a four year degree. Even at a low interest rate of 5 percent, you'd have to pay $244 per month for 10 years to erase those student loans. However, the question of exactly how much is okay to borrow for college is less dependent the amount of debt you may rack up, but more about how much money you'll make once you graduate.

Research Your Career

Deciding your future career goals is one way to explore the approximate amount of money you'll make once you graduate. Visit the Bureau of Labor Statistics and peruse various occupations you're interested in making your career. They detail current average salary ranges for many different occupations. For example, racking up $50,000 might seem like a lot of debt, however, lawyers make a mean salary of about $129,000 per year. Conversely, racking up that same amount might prove prohibitive for a tax preparer who only has a mean salary of $37,000 per year. 

Determine Future Needs


Since paying for student loans does not generally begin until after you've received your degree, many students do not take into account the future impact of having to pay those loans in correlation with other life expenses. For example, if you plan on moving to a major city after college, the cost of housing will be higher than if you live at home for a period of time. Aside from housing, take into account the cost of transportation, utilities, insurance and healthcare. The less amount of money you need to dedicate to those categories, the more you may be able to take in student loans. Create your budget here.

Take Only What You Need


The conventional wisdom regarding student loans is to borrow only what you need to complete your degree. For example, if you receive graduation gifts from family members or have a job, these monies should be used to pay for school related expenses first. Additional money should not be taken just to be stored in your bank account to use for recreational activities. Estimate your student loan payments.

All Loans Are Not Equal


Seek out federally subsidized loans such as Perkins or Stafford loans before taking loans from other sources such as high interest credit cards. State-based student loans can also over low interest rate and little or no orignation fees. Keep in mind variable rate loans don't have fixed monthly payments so the estimate you receive now won't necessarily be what you pay each month by the time you graudate.
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Topics: College Financial Aid, Borrowing for College

How to Get College Financing

Feb 13, 2012 3:26:00 PM

On the road to a post-secondary degree, college financing is extremely important to making everything work out. What do you need to consider as you take these important steps towards your future?

The first step is to fill out the FAFSA. The FAFSA determines your family's need and, subsequently, your eligibility for federal grants, such as Pell Grants and FSEOG, and loans, including Federal Perkins Loans and Stafford Loans. The FAFSA also helps serve as a bridge to determine eligibility for other financial aid, including institutional grants and need-based scholarships.

Once you have filled out the FAFSA and your eligibility for federal grants and student loans has been determined, your family may still need to borrow more than the government can offer you. It is therefore important to know about the different types of loans available and how they will work for you.

In addition to the federal Stafford and Perkins loans, there is also a fixed rate loan called the Federal PLUS Loan, that is taken out by the parent. The student is not obligated on this loan. The PLUS loan has a 7.9% fixed interest rate and a 4% fee. However, unlike the federal Stafford and Perkins loans, it doesn't have annual borrowing limits.

Other than the PLUS loan, college loans are primarily offered by the state and by private lenders. State-based lenders tend to offer fixed-interest loans, which means that the interest rate on your loan will remain stable throughout the term of your loan. Sometimes the rates on these loans are even lower than the federal PLUS loan rates and they may have no origination fees. Check out Rhode Island's fixed rate loan. Apply now for a RISLA Education Loan

Private lenders and banks primarily provide variable-interest loans. This means that the interest rate you pay after college, along with your individual payments, could change from month to month. Although variable-interest loans are currently at all-time lows, the four years it will take to graduate from college—and the time it will take after that to pay off your loans—can be a long time in the financial world, and it is important to consider what your financial situation will be like after you graduate. While prime rate may be a 3.25% now, in the 80s, it was over 20%! Check out the history of the prime rate and determine if you are willing to take the financial risk over a 10-15 repayment period.

As you consider and select your college, your college may offer you a resource list that provides you with places you may apply to for a loan. Such lists can be invaluable for many students; remember, however, that you are by no means required to limit yourself to this list if you find better offers elsewhere.

Overall, the best thing you can do for your college financing is to be informed. Further descriptions of student loans can be found at http://www.cpcri.org/PayforCollege/FinancialAid101/TypesofAid/Loans/tabid/131/Default.aspx. You may also want to refer to RISLA's guide to student borrowing at http://blog.risla.com/borrowing-guide-for-student-loans.

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Topics: Borrowing for College

Who Gets Free Money for College?

Feb 10, 2012 6:13:00 AM

Are you looking for free money for college? College scholarships and grants abound, but how do you establish yourself as a recipient? The simple answer to this is: Those who do not apply will not receive. Money will not come to you unless you tell it you are there and waiting.

What do I need to do?

The first step for most college aid is to apply for the FAFSA. The FAFSA allows you to establish eligibility for – and to be considered for – federal grants and awards such as the Pell and FSEOG. These do not need to be repaid and are awarded based on your family's need.

In addition to establishing eligibility for federal grants, many institutions use the FAFSA to judge eligibility for institution-specific grants. These grants can extend well beyond the grants the government will provide. This is especially true at more expensive private institutions, which may cost more on the surface, but also have larger endowments and understand the value of attracting motivated students. Usually, once you are accepted at such colleges, these colleges will tell you what kind of financial package they can offer you, including scholarships and grants.

If you need help completing your FAFSA, free appointments can be made at www.collegeplanningcenter.org.

Merit-Based Scholarships

So what to do once you have applied for the FAFSA and other need-based awards through the government and individual institutions?RIScholarships.org: Start your free search

Other than need-based awards, most awards are merit-based – but merit-based does not always mean you need to have a 4.0. Many scholarships have GPA requirements as low as 2.0, or do not judge based on GPA at all. In these cases, you only need to demonstrate sufficient skill or involvement in other areas such as community service or involvement.

Scholarships can also focus on different geographic regions. Nation-wide scholarships tend to be more competitive, while local scholarships are usually easier to obtain. Rhode Island Scholarships' scholarship database can help Rhode Island students find local scholarships that may be difficult to locate otherwise. Other more general scholarship engines also exist that can help locate other scholarships.

Once you have received all possible scholarship and grant awards, the next option are loans, which need to be repaid, or paying out of pocket. So while you have time, give yourself the resources to apply, apply, and apply for that free money for college that's waiting for you.

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Topics: Scholarships for High School Students

College Financial Aid: Rhode Island State Grant

Feb 7, 2012 10:44:00 AM

Applying for the Rhode Island State Grant is easy. All you need to do is make sure you file your Free Application for Federal Student Aid (FAFSA) by March 1and you will automatically be considered for this opportunity. While award amounts have yet to be determined for the 2012/13 academic year, in past years they have ranged from $250 to $700.

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Topics: College Financial Aid