The search for money for college
GOLDEN VALLEY, Minn. -- With skyrocketing costs for college, and budgets squeezed by a sluggish economic recovery, families are having a tougher time than ever trying to pay for college.
Dan Ament, Financial Advisor with Morgan Stanley Smith Barney in Wayzata, believes some parents are overlooking obvious places to start.
Ament says studies indicate one out four college-bound families do not fill out the Free Application for Federal Student Aid (FAFSA) even though many would qualify for aid.
Another area that may be overlooked is tax credits. Ament points to the Hope Scholarship Tax Credit, which offers a credit for tuition, fees, books and supplies. Find out of you're eligible at www.irs.gov.
Many families will turn to loans. Experts say federal student loans offer fixed rates, and long payment terms, which could make them more attractive than private loans. Private loans may have lower interest rates at times, but they are often variable rates subject to unexpected increases.
Scholarships are another area that can be overlooked. Not all are need-based. Ament offers a recent SallieMae/Gallup study that indicated nearly a third of families with incomes of more than $150,000 a year covered some college costs with scholarship money. Learn more at www.fastweb.com, www.collegeboard.com, and www.salliemae.com/scholarships.
One of Ament's favorite savings vehicles is the 529 College Savings plan. Ament says be sure that the plan you choose shifts toward more conservative investments as your child gets closer to college age.
Ament says you can find help to calculate college costs at www.finaid.org and www.collegeboard.com.
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