U-Prep 101

In day one we talked about the government contribution.  Day two examined the school contribution.

Today, I will cover the third portion of the financial aid partnership:  Family Contribution.

For the family portion of the partnership, consider the following four sources:

1.  Outside Scholarships: A great place to look for outside scholarships is FastWeb.com. FastWeb.com is a FREE scholarship search engine.  Once a profile is created online, FastWeb will send different scholarship opportunities to students by email.  Students can pick and choose the scholarship opportunities they wish to pursue.  Although not common, I have spoken with students who have been able to obtain over $10,000 from FastWeb.    One important reminder:  NEVER PAY FOR A SCHOLARSHIP SEARCH.

2.  Savings: Not many parents have been able to set aside $1,000/month since their child was 2 for the college fund.  I don’t recommend that parents drain their entire savings to pay for the freshman year, but remember that this is a partnership and it’s possible that savings may help supplement the investment of college.  It is always wise to consult your financial adviser before making decisions about savings plan withdrawals.

3.  Monthly Payment Plan: Most schools offer families a monthly payment plan option.  For a minimal fee, parents can spread out the payments for the academic year over a 6, 8, or 10 month plan.  This option breaks up the amount paid and is often more convenient for families.  A few years back, parents had to make a full semester’s payment at orientation.  Thankfully, there are more options now.

4.  Loans:  I always strongly encourage families to pursue the first three options before taking out a loan.  However, low interest educational loans are a way that families often choose to pay for a part of the collegiate expense.  The Parent’s PLUS (Parent’s Loan for Undergraduate Students) Plan is the most popular loan program available.  For more detailed information about the PLUS program, click here.

Investing in college and education is one of the most important investments one can make.  My education has only appreciated over time, (unlike the two cars I’ve bought and the house I still own 2 states away!)   I am thankful for the quality education I have received and I am also thankful that my parents were committed to being a strong part in the financial aid partnership.

Tomorrow I will cover the student contribution and how that can play a major role in paying for college.