Sunday, November 30, 2008

College Financial Aid

By Jimmy Johnson

Deciding whether to go to college, to continue in education for 4 more years, is one of those really big crossroads decisions that people face in life. It is an emotional, social, spiritual, intellectual and fundamentally a financial decision. It is an investment decision, because you are putting money into your brain asset now in order to earn far greater (hopefully) returns throughout the rest of your working life. The risk with this investment is of course debt. Some fortunate folks start out with enough money, from parents or whoever, to finance their intellectual investment without borrowing. Most folks however will have to take on some debt. Private colleges can mean up to $100,000 or more. It is always best to have an investment repayment plan worked out ahead of enrolment and college financial aid offices can help.

Realistically as part of your investment plan you must ask yourself how many scholarships can you gain? Scholarships are the best kind of money in that they are FREE! No repayments means you would be crazy not to put lots of effort into gaining all the scholarships you can. Colleges tend to provide money on two bases. Firstly money according to your needs which is directly related to your parents income and how many of your brothers and sisters will need investment money too. Your investment plan needs to answer two questions here. Will your parents contribute financially (all colleges assume they will)? Will you repay them or is it free money?

The second basis on which colleges contribute to your self-investment is with merit money. Private colleges tend to have much more of this kind of money available because of their more generous sponsors. These people set up scholarships in their names or they add to existing funds that have meaning for them. Sometimes this kind of money can cover more than 50% of your tuition costs. Well worth asking about and working for.

Grant can be found in other places so keep your eyes open and be aware. Charities and local societies may have some funds set aside for people going to college and you may qualify for their help. These type of funding sources may be hard to find and may only give out small sums but even small sums mount up and if they are given without you having to pay back that makes them even more valuable.

Any savings you have should be used only when all other monies have been put into your education. Why? Well because they continue to earn interest of course. But surely the time will come when you need to take a loan. First port of call has to be the Federal Application for Student Aid (FAFSA). There you will find out which loans you qualify for and you can then work out a repayment plan. A good tip when doing investment planning is to estimate your future income, then reduce it by 20%. Then estimate your expenditure and increase it by 20%. This will ensure that your expectations are never high to cause anxiety when not met. - 16747

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