Financial Aid Mistakes

Do I make too much money for federal financial aid?

If you're like many parents, you quickly discount the possibility of federal financial aid. You figure that government assistance is for the needy and that there's nothing in the "bucket" for you and your child.

You couldn't be more mistaken.

While it's true that menu federal programs are available only to low-income families, there are also programs open to everyone, regardless of financial status. They offer below-market interest rates, delayed repayment, and other advantages. Even Donald Trump himself would qualify. All you (and he) need to do is apply.

How many eligible students fail to apply for aid...and "miss out"?

If you weren't planning to apply for financial aid, you've got company. And lots of it.

That summarizes the disappointing new published by the American Council of Education (ACE) in its October 2004 report "Missed Opportunities: Students Who Do Not Apply for Financial Aid." The ACE found that more than half of all undergraduates during 1999-2000 and who came from families earning more than $80,000.00 failed to apply.

And remember. All of these students qualified for some form of aid. And while the assistance for the higher-income brackets comes in the form of government-sponsored loans, don't discount the value. These loans offer attractive features, including interest rates unavailable in the "open market," and can help you keep your savings intact.

Which programs are available regardless of financial status?

Even if your family doesn't qualify for need-based aid, you've still got two excellent government programs available to you. They are:

*Unsubsidized Stafford Federal Loans. This loan is the most common source of education loan funds, and for good reason. payment does not begin until six months after the student leaves school and the interest rate is low.

*Federal PLUS Loans. A Stafford loan probably won't cover all of your child's expenses. A federal PLUS loan can make up the balance of costs.

For more information on these two loan programs, including current interest rates, as well as need-based programs, please visit http://www.collegeanswer.com/

What about the opposite...parents who figure grants and scholarship will cover it all?

There's a flip side to the picture. There are some families that make the OPPOSITE mistake: They figure that scholarships and grants will cover all college costs and fail to apply for student loans. In many cases, your student's financial aid package will be a combination of BOTH "free" money and loan funds.