With college costs (room, board,
tuition and fees) ranging from about $11,000 annually at SUNY to
$30,000 or more at private colleges, you may think you have to
knock over a bank to provide your child with a college education.
But take heart! Plenty of parents are finding ways to make college
a financial possibility, as evidenced by the growing number of
young people who are continuing their education after high school.
How are they doing it? One of
the first places to go looking for answers is in the high school
guidance office. The guidance counselors are more than happy to
talk with parents, explain the different scholarships and loans
that are available, and direct them to various books and articles
on paying for college.
And don’t think you have to wait
until your child’s junior or senior year to start your research
and planning. The more you know and the sooner you know it, the
better off you will be.
Plenty of free assistance
One warning from guidance
counselors: Don’t be taken in by unscrupulous operators who want
to charge you money to help you find college financial aid.
There’s plenty of free assistance out there. For example:
Public libraries have
educational sections with college financing information, pamphlets
from specific colleges and Internet hook-ups for online research.
Both guidance offices and public libraries keep copies of the
financial aid application form, FAFSA – Free Application for
Federal Student Aid – that colleges use as their formula for
determining financial aid, and applications to federal and state
financial aid programs.
The Internet is also an
incredible resource. A "college financing" search yielded 1,543
sites. One,
www.pueblo.gsa.gov, outlines college costs through the year
2017, and strategies for paying the sometimes shocking fees.
Some corporations or unions
offer scholarships or tuition payment plans to their employees’ or
members’ children.
Guidance counselors also
recommend that students and their parents talk with financial aid
officers at colleges they are visiting to get an idea of what
financial aid they have available.
What can we expect?
One of the first questions
parents often ask is a very personal one: What can we expect in
the way of aid, given our family income and resources?
Jim Vallee, director of
financial aid at the College of Saint Rose in Albany, said there
are no hard and fast guidelines for determining how much financial
aid a family might receive. He suggested using the need analysis
calculator at
www.hesc.com, under New York Mentor. "This will determine the
estimated family contribution (EFC)," Vallee said,
After scholarships and grants
are exhausted, loans become the way to go. The most common student
loan is the Stafford loan. This federal loan allows dependent
undergraduates to borrow up to $2,626 as freshmen; $3,500 as
sophomores, and $5,000 for their remaining college years. Their
variable interest rates are capped at 8.25%. The Perkins loan is
awarded to students with exceptional financial need at a 5%
interest rate, with a limit of $3,000 per year for undergraduates.
Parents of dependent students
can take out PLUS loans, the federal Parent Loan for Undergraduate
Students, to make up the difference between the student’s aid
package and the tuition cost. Their variable interest rate is
capped at 9%, and payment begins 60 days after the funds are fully
disbursed, with a repayment term of up to 10 years.
NY College Savings Program
New York now
offers a College Savings Program that allows residents to deduct
up to $5,000 of annual contributions – or $10,000 for married
couples filing jointly – from their taxable income to pay for
college expenses. Investments are managed by TIAA, part of
TIAA-CREF, a financial management service, and earnings are tax
deferred. There’s no cost to open an account, which can be done
with as little as $25.
There is a
36-month waiting period to withdraw funds, which can be used at
any accredited educational institution globally. The money is
invested based on a child’s age or a family’s comfort with risk.
Two types of portfolios are managed by age, with investments in
stocks and aggressive growth when a child is young, then in more
conservative instruments as the child gets closer to college.
There’s also a pure stock portfolio based on Standard & Poor’s
500, and a conservative, interest-rate sensitive portfolio that
never goes below three percent.
New York’s College Savings Program
started in September, 1998, and as of April 10, 2001, 147,295
people had contributed $642 million to it. To get an enrollment
kit, call 1-888-722-9836.
