Unfortunately, money to pay for any college is becoming harder to find, even as college costs increase at a rapid pace. It can help to understand all the various programs out there, the requirements for each, and how to apply for aid.
Community Colleges and Junior Colleges
These learning institutions aren’t quite the same thing, but they’re similar. Both offer two-year associate degrees, and some offer certificate programs. They can provide an affordable way to begin college; then, you can often transfer your earned credits to a four-year school if you want to pursue a bachelor’s degree. The only major difference is that junior colleges are typically private schools. Financial aid for junior and community college students can come in handy for those young people who are most likely to benefit from attending a year or two before enrolling at a four-year college. Not only can these save a significant amount of money on their tuition costs, but also on the room, board, meals, and transportation. College costs aren’t just limited to tuition. It’s not uncommon to need additional funding for a complete college education.
The FAFSA Application
Your financial situation can change every year, so you must submit a FAFSA form annually to take advantage of these financial aid programs. Every federal student loan requires that you complete a FAFSA form—the “Free Application for Federal Student Aid.” The form determines whether you’re eligible for federal financial education assistance. The FAFSA form used to strike fear in the hearts of students and their families because it was so complicated. It was a monster to fill out, but that’s changed now that a new, easier version of the form has been issued. It’s even possible now to transfer your financial data directly from your federal tax return to the FAFSA form.
Direct Loans
You must be enrolled at least half-time and complete the FAFSA form to qualify for a Stafford loan. This program can provide up to $20,500 in financial aid for college students annually, regardless of their family’s income or asset levels. Students who demonstrate need can receive more favorable rates and repayment terms.
PLUS Loans
PLUS loans are available to parents to help provide financial aid for students attending either a community college or a four-year university. Unlike with Stafford and Perkins Loans, parents are responsible for repaying these loans. Although the rates might not be as attractive as Stafford and Perkins loans, they’re still less costly than most private loan programs. Parents must complete the FAFSA form and pass a credit check to qualify for a PLUS Loan.
Pell Grants
Pell grants are one of the more elusive–and attractive–forms of financial aid for college students because grants are awards that don’t have to be repaid. Part-time students are eligible but will receive a reduced award amount. Students must complete the FAFSA form and show significant financial need to qualify.
State Programs
Many states offer programs that provide financial aid for community college students who are residents of that state. Unfortunately, many of these programs are the first to be cut when a state experiences a budget crisis. Contact your school’s financial aid office to apply for state-based financial aid.
Scholarships
Numerous private organizations, nonprofits, and businesses offer scholarships for community college students. These scholarships provide an opportunity for many students with a relatively small amount of money, and the application process is fairly straightforward. In many cases, you can submit an essay and a copy of your transcript. Talk to your community college financial aid office and search the free scholarship websites to find out about scholarships for community college students.
A Word of Warning
The No. 1 rule in borrowing is that you understand exactly how much debt you’re taking on, so read the terms and conditions of each of these programs thoroughly. It doesn’t matter whether you’re a college senior who’s trying to plan your financial future or a soon-to-be college freshman who is considering federal or private student loans to supplement the amount of college financial aid you’ve been granted. Not understanding your full financial commitment can present a big problem. And you might not need as much money as you think. Determine what you’re likely to need before you apply so you can avoid taking out more financial aid than you actually require.
