"While many high school seniors are engrossed in completing college applications, it's also important for them and their parents to be thinking about paying for school. Many will need multiple loans to cover the burgeoning costs of college," says Kevin Walker, co-founder and CEO of SimpleTuition, Inc., a company that helps students and parents make sense of education financing options.
Indeed, average tuition and fees at four-year public colleges rose 6.6 percent this year, again outstripping increases in financial aid and pushing students into more borrowing, according to the College Board.
Completion of the Free Application for Federal Student Aid (FAFSA) is a key step families should take when preparing to pay for college. This application helps to determine the amount of federal and college aid a student may receive and allows them to apply for federal student loans. Federal loans have favorable repayment terms when compared to private loans and experts recommend maxing out on federal loans first.
"Only after the FAFSA is completed can students access the best borrowing programs available," stresses Walker.
With the cost of college continuing to skyrocket, thousands of families nationwide will require multiple loans each year to cover tuition and fees. One of the reasons families tap multiple loans, is that federal student loans, available in limited amounts, are worth the trouble of including in the package. The FAFSA is a necessary step toward accessing these loans.
Walker strongly advises parents and students to consider the following advice:
Federal Stafford Loans are available, regardless of need, but you must complete the FAFSA. Many families assume they won't be eligible for the financial aid programs governed by the FAFSA process. However, the federal Stafford loan - the most common student loan - is available to almost any student, regardless of need.
To qualify for Stafford, you need to complete the FAFSA form. If the family is deemed 'needy' enough, the student may be able to borrow through the subsidized Stafford program, where no interest accrues during enrollment. If the student is going to borrow at all, don't leave this best-in-class loan on the table.
Do it yourself and do it sooner than later. The FAFSA form is not complicated. Just visit the U.S. Department of Education Web site to link to the online FAFSA. The sooner you complete the form, the more time you have to prepare for the tuition bill. Some even say that applying early gets you in queue for some school aid that may be available on a first-come, first-served base.
Be prepared. Have the following information handy: federal tax return for parent and student (if you haven't filed your tax returns and don't have exact numbers for your 2007 income-and-tax situation, simply estimate your 2007 income); information on assets and other untaxed information; and the U.S. Department of Education PIN number assigned to you.
Advocate for yourself and ask questions. If your circumstances change (change of assets, change of financial need, dependency status, job loss, etc.) contact your school's financial aid office as your expected contribution could decrease based on these factors. Don't hesitate to stand up for yourself if you think your "need" has increased.
For more information about funding for college, visit www.simpletuition.com.