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Financing and Value Continued


Once you have been admitted to your chosen school, the school will generate a financial aid package and send you an award letter. This letter will let you know how much financial aid is available for you at your chosen school. This aid may consist of loans, scholarships, grants, work-study, and other sources of funding. Because of shortages in federal funding, many schools use a sliding scale to determine the amount of financial aid students are eligible for. According to this scale, seniors receive the most financial aid and freshmen receive the least. If there is not enough financial aid to cover all of a student's expenses, he or she will need to cover the difference or find alternative sources of funding. Students can get loans from banks and from other lending entities. These types of loans typically have higher interest rates than government-backed loans and payments are usually not deferred until a student graduates. One exception to this is the private loan option offered through Sallie Mae (). This is an unsubsidized loan that offers payment deferment while students are in school.

Students can also participate in other programs to secure funding. AmeriCorps, Military Service, and PeaceCorps. These are community service programs that allow students to give of their time in order to earn funding for higher education. These can be good options for students who are willing and able to allocate the time required to satisfy the requirements of these programs. One advantage these programs offer is that students do not have to repay the money they get from these programs.

If community service is not an option, parents may also get education loans. There are PLUS (Parent Loan for Undergraduate Students) loans available to parents from Sallie Mae. These loans are also a good source of funding as the interest rates are low (4.75-9%) and parents can take up to 25 years to repay the loan. Additionally, the loan is not based on parents' income or assets. PLUS loans are unsubsidized and interest begins to accrue once the loan has been disbursed. Parents may also obtain loans from their banks and other lending entities.

As mentioned above, each school sets its own deadline for FAFSA forms. It is important to complete the FAFSA by the school's deadline because after that date grant monies are allocated on a first-come-first-served basis. If a student completes the form by the federal due date (which happens to be after most university due dates) it is likely that there will be no grant monies left available. Grants can come from federal, state, and local sources and are the best type of financial aid because they do not have to be paid back.

In addition to traditional funding sources, students may also seek corporate funding. Many companies and associations offer scholarships. The award amounts for these types of scholarships are typically smaller than university scholarships, but students are not limited to applying for just one. Indeed, it is in the student's best interest to apply for multiple scholarships as small sums of money up add. Students can find information on corporate scholarships from many sources (high school guidance counselors, various websites on the Internet, etc.). There are also books available that compile an annual list of available corporate scholarships. These books are readily available at local libraries and booksellers.

As you can see, there are many ways of financing your education. Grants and scholarships are free money and should be pursued vigorously. There are some institutions that provide free tuition (including the military academies and some small endowed universities). The ROTC program and various "corps" programs also provides scholarships in return for service. Many students find part-time jobs to supplement the cost of their education. Clearly, loans should be your last resort. Nevertheless, many students will take out loans to put themselves through school, and they will spend 20 to 25 years, on average, repaying those loans.

The effort (or lack thereof) you put into planning your career and education will directly affect your future income and happiness. It is important that you are diligent in your career and educational planning. You need to consider the value of the school you attend, the major (area of emphasis in your studies) you select, and the career field you hope to work in when you have graduated. The choices you make early on will have a lasting impact on the amount of money you are able to earn, the enjoyment you derive from working, and your ability to enjoy the fruits of your labor in the form of discretionary income.