You Can Afford College

Unfortunately, current economic conditions are leading families to believe that college is not affordable.

In fact, the opposite is true.

First, virtually all colleges, universities, and professional schools, including those offering online degree programs, are making concerted efforts to be as affordable as possible. Some have voluntarily frozen costs and/or cut budgets. Others have tuition limits imposed by state law.

In addition, most colleges and universities have stepped up their efforts to raise money for scholarships because they know that families may need more help than in recent years.

The federal government is also stepping up to help students, with increases in several grant and student loan programs. Online college students also now qualify for financial aid not available to them in the past. That change makes it easier than ever for working adults to continue their educations.

And, there is help from many states as well. Some offer achievement-based and/or financial-need based scholarships. And, some state colleges and universities offer in-state tuition to students from contiguous states and/or high-achieving out-of-staters.

Students and their families should also be aware that it is not uncommon for colleges and universities to offer no-interest tuition installment plans. Not only do these plans allow families to spread their costs into 7-8 payments, but they provide insurance which will cover a student’s tuition for up to four years if his or her parent passes away. And, the installment plan itself costs nothing.

With help from college admissions and financial aid counselors, and the many online scholarship search sites, virtually anyone can get the help they need to make college possible. Don’t believe otherwise.

Student Loans – Graduate and Undergraduate Financial Aid

Whether you are in your first 4 years of college or are attending graduate school you are paying several times more for your college education than your parents and grandparents paid. This increase makes it difficult for students. But there are programs out there that give much needed assistance.

Initially a college student may avail himself of many different programs to pay for college. There are student loans, grants and scholarships and some students must take advantage of all three.

Stafford loans are very popular and there are two types. The unsubsidized loan is a bit more expensive because you are responsible for accrued interest from the very beginning of the loan. Though they cost more, these types of Stafford loans are easier to qualify for. A subsidized loan in which the government makes your interest payments until 6 months after you finish college are of course less expensive because you save on all that interest. However, these loans have stricter requirements, offered only to low-income families.

Here are some websites you can visit to see what you might qualify for: http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/ and http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp

Graduates, on the other hand, often have fewer options for scholarships and grants just at the time when tuition costs jump. But teaching and/or research assistantships usually more than make up the shortfall. They, in effect, have very low-paying (and very long hour) jobs while attending courses and doing research.

Recently a new option has become available to graduate students: PLUS loans. Though the acronym stands for Parent Loans for Undergraduate Students, they are now an option for many grad students. In the undergraduate case, parents are the borrower and are responsible for repayment. In the case of grad students, they become the responsible party.

PLUS loans have several advantages.

First, they’re available. Since they’re based on credit quality, not need-based, most borrowers can qualify. Relatively few grad students have had time to get into the credit binds that working adults often fall into. As a result, though their history may be sparse, they usually have few bad marks on their credit report. That makes the decision easier for college financial aid officials, who determine eligibility.

Variable Rate vs Fixed Rate Student Loans

Changes in Student Loan Structure

As of July 1, 2006 Stafford loans became fixed rate loans. This was not a new idea. Years ago all Stafford loans had a fixed interest rate. In time the structure changed and they became variable rate loans. Now they have again taken their original structure.

Some lenders make up for what they loose in interest rates by charging fees. In general 3% fees charged on a loan is the same as a point of interest. Therefore, if they keep to the restrictions on the interest rate yet charge you a loan origination fee or loan insurance then they recover what they are missing in interest payments right up front. Some lenders are willing to extend credit and waive the customary fees.

Interest Rate Increases

The interest rate on loans has risen greatly over the past few years. The PLUS student loan has gone up from 6% to 8.5%. That makes this loan quite a bit more expensive than before. 2.5% interest increase means that you loan is going to cost you hundreds of dollars more a year than it would at the lower interest rate.

You can visit www.bankrate.com/brm/mortgage-calculator.asp to see exactly how much your loan will cost you at a given interest rate.

The Future

Financial advisors have a difficult time trying to determine where interest rates are going. It is a good guess at best. There is really no way to be certain how much your interest rate will vary over time. For students and their parents seeking student loans their only option is to base their choices on what the financial advisors are saying and hope for the best.

Finance Websites Give Good Guidance

Among the easier ways to follow those predictions is to look at various interest-bearing financial instruments, such as T-Bills or long-term corporate bonds. By examining those numbers, potential borrowers can get the best available guess about where interest rates are headed. That information is easily gained from any finance website, such as Yahoo Finance or some other personal favorite.

Student loans and other types of loans often vary in conjunction with the Treasury bill. The Treasury bill shows what the government projections are for selling its debt and what the buyers are expected to offer.

Hispanic Education Made Affordable

Going to college is an expensive undertaking. This is especially true when you are at a disadvantage for reasons not within your control. Minorities like Hispanics are often at this situation when even though they are qualified, they are not always in the position where they can grab the opportunity to go to college.

However, these days opportunity to get a college education has opened up to them which is just what they need in order to get out of poverty.

Very few students of Hispanic background succeed in getting into further studies mainly due to financial reasons. Since Hispanics are perhaps the biggest minorities in the country, many organizations are starting to offer Hispanic students scholarships.

Because of the number of scholarship opportunities for Hispanic students, there is no reason for deserving Hispanic students to be forced to drop out of school because they can not afford it.

Hispanic students should be able to find scholarships in a number of places. There are scholarships available to those intended for specialized courses such as engineering, computer technology and actuarial sciences, to name a few. There are also those that are for general courses.

The scholarships are normally given in varying amounts of cash depending on the company or sponsoring organization. Based on a 4 point scale, the grade point average requirement is usually at least 3.5.

Financial need is a major factor in granting the scholarship. This could be determined based on financial documents that form part of the application procedure. There are differences in the required additional documents for submission as well as deadlines across the various organizations and companies offering these scholarships. It would be wise to keep a calendar of these deadlines to avoid missed opportunities.

Many Hispanics often face generations and generations of living in near poverty and can barely make ends meet, this is in spite of the persistence and determination to make it in America.

It’s True; You Can Afford Higher Education

Because of the effects of the recession in which we now find ourselves, lots of students believe they can not afford higher education.

In fact, the opposite is true.

First, virtually all colleges, universities, and professional schools, including those offering online degree programs, are making concerted efforts to be as affordable as possible. Some have voluntarily frozen costs and/or cut budgets. Others have tuition limits imposed by state law.

In addition, because many families find their financial status tenuous, colleges are increasing their scholarship fundraising efforts in order to better assist them. And, as a result, scholarship donations are up significantly at many colleges and universities.

The federal government is also stepping up to help students, with increases in several grant and student loan programs. Online college students also now qualify for financial aid not available to them in the past. That change makes it easier than ever for working adults to continue their educations.

Louisiana, Florida, Georgia, and many other states also help college students by offering need-based and/or academic achievement scholarships. Some also allow out-of-state students to attend their colleges and universities for in-state tuition and fees (a big saving).

Tuition installment plans, once offered at only the highest-priced colleges, are now much more widely available. Most include free insurance that will cover college costs in the event of a parent’s death. And, there are no origination or interest charges for the plans.

The bottom line is that in any economy, no matter how difficult, college is affordable. College admissions and financial aid offices will help you identify programs for which you may qualify, and there are many websites which can help you find scholarships and financial aid. Good luck.

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