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Ready for College
How to beat some of the high costs

You may have several repayment choices. This can make or break your finances early in your career.

Most loans are from the federal Stafford program .When applying for a loan, amounts are based on your grade level and student status. Independent students may be eligible for more because they pay college without family assistance.
The interest rates for a loan in 2006-2007 was 6.8% The standard repayment term is still ten years. You may be able to extend the repayment period by consolidating or deferring your federal loan.

Several repayment options like Stafford’s Standard Repayment Plan require you to pay a fixed amount each month. This amount will be no less than $50 or that month’s additional interest charges, whichever is more.

The Graduated Repayment Plan is another option. This allows lower payments at the beginning. These generally only cover interest. Then, payments increase over time. The Income-Sensitive Repayment Plan offers monthly payments based on your yearly income and loan amount. As your income rises or falls, your payments change.

The Extended Repayment Plan is for borrowers with Federal Family Education Loans (FFELP) totaling more than $30,000. You have a choice of fixed or graduated payments for up to 25 years.

How to prepare for the costs of college
A federal tax advantaged investment plan, referred to as Section 529, is designed to encourage saving towards higher education.
An advantage in investing in a pre paid tuition plan is some states offer a state tax break. Plans based on bond funds may also offer federal tax benefits.
A disadvantage might be that most prepaid plans are designed for state residents for use at public colleges and state universities. Even though cancellation or transfer policies are available, the money you invest in the plan won't go as far at a private or out-of-state school. Tuitions at private and out-of-state institutions are typically much higher than in-state universities.

An investment advisor can suggest other ways to save.
More info: http://www.savingforcollege.com/

Financial aid
Financial aid may be available from your school, various grant-making foundations and other sources.Work-study and scholarships are also available. Even though state and federal aid may not meet all of a student’s financial needs, there are other channels that can be sought. Choose and plan wisely because it can affect the rest of your life, both parent and student.

Advantages of junior colleges
One way to tackle the tuition issue would be to start at a community or junior college for the first two years. You can get a similar education for far less than many four year colleges.

High school higher ed
Some high schools offer advanced placement courses that you can use towards college credit. Then you can take the College Level Program Exams. Currently, 2,900 colleges give credit to students who pass these exams. College tuition is usually charged per credit.Advanced placement classes are often free in public schools and often there’s no extra tuition in parochial or other private schools. The only costs are to take the exam, $83 dollars per subject.Another savings can be gained by going to a state college. Tuition is often lower than private universities. Also, scholarships may be easier to get. State colleges give discounts to students who live in their state. Most states make it hard for out of state students to get this discount.

The best deal starts at birth!
Deciding what college to go to and how to pay for it can start at birth. Establishing a college account early is good for many reasons. It reduces later debts, especially when dealing with rising costs.
Knowing your options can greatly lower your costs.

by Tara O'Donnell, Hearts & Minds volunteer
Website © Copyright: 1997 - 2007 by Hearts and Minds Network at http://www.heartsandminds.org/self/collegeprep.htm - online June 17, 2007, latest changes June 24, 2007