Tuition. It is the financial nightmare of many parents, and nearly every student must face the problem of how to afford it at one point or another. Scholarships are by far the best choice out there to deal with the problem – regardless of the students age, as there are scholarships for returning students as well as those who are fresh out of high school – but what about those who do not get any, or if the scholarships do not cover the whole bill?
Well, unless you can pay for it out of pocket, the option that many middle-low income families take is to pursue student loans. These can take a variety of forms, ranging from a standard bank loan to Pell grants, Stafford loans, Perkins loans and more. This can be a frightening decision to make, especially for low-income families and those with low credit ratings.
Two Helpful Tools
If you or someone that you know is thinking about taking a student loan, two tools that you should be aware of are the Free Application for Federal Student Aid, or FAFSA, form and the website https://humancapitalscore.com/.
1) https://humancapitalscore.com/ was recently mentioned in a Wall Street Journal article (a link to the article in question can be found at the bottom of this post) about college degrees and post-grad jobs. The website contains a free online calculator for figuring out how much that a student may make after they graduate.
This can be useful in determining how much money you should take out on a student loan. “Many experts say total student loans shouldn’t exceed a grad’s first-year income after graduation”. The entire point of humancapitalscore.com is to provide you with those numbers, and it is simple and easy to use. All you have to do is input the students test scores, high schools and colleges attended (or are considering attending), grades and major/vocational training.
2) If you, your kid, or someone else that you know does decide to take out a student loan, then make sure to check out the FAFSA form. It is designed to “…ensure that all eligible individuals can benefit from federally funded or federally guaranteed financial assistance for education beyond high school” (taken from the fafsa website). Broken down, what this means is that the goal of FAFSA is to make it financially possible for high school graduates or people with a GED to gain a college or vocational degree.
In the past, however, it has often fallen short of its goal. Like many federal programs, it has been called needlessly complicated and notoriously difficult to fill out – let alone receive aid from. Asking applicants as many as 157 questions in order to determine the students eligibility, many students and their families have given up without even turning it in. But this may soon change.
According to a New York Times online article, the Obama administration is trying to fix this problem. Specifically, the article states that:
“In January, when next year’s form goes online, about 20 percent of the questions will be eliminated, mostly by avoiding redundancies. For example, students who are at least 24, or married, will automatically be able to skip the 11 questions about their parents’ financial information, and low-income students will be able to skip the questions about assets, which are not used to determine their aid eligibility.”
Further changes are also pending that can affect low-income families and “less than 3% of applicants” (people with disabilities, medical problems, and other rare occurrences), but they may or may not happen. In order to be sure about whether or not the new FAFSA form can help you out, take a look at the new form which is being released sometime next month, January.
Remember, tuition doesn’t have to be a crushing nightmare. There are ways to send yourself or your kid to college without taking on a massive amount of debt besides, or in addition to, finding scholarships – you just have to be aware of your options.