Find a scholarship and get ahead!

The amount and kinds of scholarships available from individuals and corporations is mind-boggling. Unlike loans for bad credit, you never have to pay back anything with scholarships. The companies and individuals who offer them are interested in helping others who are enthusiastic about getting or furthering their education.

Applying for scholarships is a great way for kids to challenge themselves. The entire process will help them develop proficient skills, such as getting organized, learning to present themselves and learning to match their message to their target audience. This process helps them understand who they are, where they are going, where they have been and what they want.

Process of getting ready

Sometimes, just the preparation process of putting everything together can help them determine if there are any gaps that can be filled with community work, internships, etc., which could in turn strengthen their scholarship requests, making them highly prospective recipients of almost any scholarship.

Ways to find a scholarship

There are so many scholarships to apply for; start hunting them down. One way to find them is to ask the people around you. You never know, they might work for a company that offers scholarships. Even your local church may offer scholarships. If not, other church members might know someone else who offers them. Finding the right scholarship is not as easy as applying online for short term installment loans or no credit check personal loans, but it’s a lot easier that you might think.

Many parents are looking to their credit cards to fund college for their children. This year some states, businesses and colleges are aiming to help people pay for the expense. There are some rules, of course. And of course, if something sounds too good to be true, it probably is. Parents need to do some research on any offer that comes in the mail or via the phone before they accept any funding. Here are six ways to get free money to help defray the cost of college.

State aid

There are nine states in which government agencies and charities are offering grants for college costs. Arkansas, Colorado, Louisiana, New Jersey, Michigan, Minnesota, Rhode Island, Utah and Maine are all a part of the initiative to help defray school costs. For example, in Maine, legislators began offering $500 to newborns whose parents agreed to open 529 College Savings Accounts. Many of these states offer financial extras to low to middle-income families. Louisiana and New Jersey offer wide varieties of grants and scholarships for their residents. Each parent should check with their student’s high school counselor and the FAFSA website for details on what plans are available to help with college costs.

Parents should be aware that each state has its own list of rules and regulations. Some require parents to fill out detailed forms annually, and others have very strict deadlines. Utah for example has introduced some new grants available to families, but their regulations were so limited that only 19 families ended up qualifying for them.

Employers and credit cards

Two other ways to find funding for college are through employers and with credit cards. In 2008, some employers began giving new parents grants of $700 if the parents opened a 529 savings account prior to the child’s first birthday.

Credit cards are another way to help fund college. Fidelity offers an American Express card that rebates 2% of all purchases and diverts them into a Fidelity 529 account. Also, Upromise just introduced a MasterCard that rebates money to an Upromise 529 or to a Sallie Mae education loan. The card rebates 1% on all purchases, 10% on groceries at certain stores and the user can choose to accept other rebates on gas and restaurant purchases.

Online deals to help with college

There are also many online websites that offer cash back to shoppers who click through their websites to partner websites. Littlegrad, Futuretrust, Upromise and Babymint are all websites that offer these types of cash back deals.

Colleges are also offering matching grants for parents who are saving for college. Sage Scholars, Inc. convinced 230 private colleges to “guarantee Tuition Rewards scholarships” to families who invest or shop at Sage’s website partner companies. Also, over 274 private colleges are part of the prepaid Independent 529 Plan. This is a plan that gives parents a 0.5% discount if they purchase tuition for children at current costs.

Relatives and friends

Finally, relatives and friends can aid in college funding. Freshmanfund.com and Ugift.com both offer tools that request relatives and friends donate to a college fund “in lieu” of birthday, graduation or Christmas gifts. Freshmandfund works with the 529, while Ugift works with Upromise.

Funding college

Whichever way parents choose to pay for college, there are methods of help out there. State aid, employer’s help, credit cards, online tools and relatives and friends are all viable options to look to for additional funding.

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Funding college

A lot of parents look to short term personal loans when it comes to funding their child’s college education. This isn’t normally their first choice, but due to bad planning or a lack of, it is a necessary move to meet expenses. For any parent thinking about a child’s education, there are a few rules of thumb to remember. Here are some tips on the best way to manage.

Saving should start soon

The basic rule with any savings plan is that time is of the essence. There can be a huge difference between saving for two years and saving at the same rate for ten. When it comes to funding college, it’s best to start an investment account for children when they are young. Investing only $100 a month for eighteen years at an 8% annual return will yield $48,000. Although that may sound like a good amount of money, remember that tuition goes up and there can be a huge difference between education costs this year and education costs at the same college in eighteen years from now. Parents should always plan for inflation when they are deciding how much to save monthly.

What vehicles to use

When thinking about how to save, a portfolio that focuses on stocks is the best way to build savings for long-term goals. This is why starting to save early on is important. A good portfolio grows with time and managing it well can bring the return needed to fund college. As a child gets older, parents can shelter their returns by switching more money into bonds and liquid assets. Portfolios are flexible and that is where their strength as savings tools are most apparent. If parents want, they can also invest in mutual funds and allow a professional to take charge of savings. This can be a great advantage too because parents aren’t tasked with watching markets daily.

The entire college cost

When it comes to the entire college cost, parents should not think that it all has to be covered. There are federal, state and short term personal loans that can easily bridge the gap. Here is where a lot of parents get in trouble. They think that they need to cover 100% of the college fund and dip into their own retirement savings. Although college is important, experts caution parents to always focus on their retirement first. Though that may be contradictory to the nature of selfless parenting, in reality it is important to prioritize retirement. Anne Mayer, economist for Bankrate.com said, “People need to understand that there are tools for children to use to get through college that range from loans and scholarships to part-time jobs and grants. There are no such supplements for a shortfall in retirement savings.”

The 529 savings plan

The 529 savings plan is a great way to not only save for college, but also to find tax breaks. Qualified withdrawals are free of federal taxation and normal plans range from $100,000 to $270,000 per child. There are also minimum restrictions on the plans so you can start one regardless of how old the beneficiary is or how much you make.

Funding college

It is possible to find ways to fund college, but it is necessary to plan ahead. If a parent has time, then stocks and investments can build savings to cover the cost. If a parent does not have enough time, then federal and state aid along with short term personal loans can meet the need. Either way, it is important for parents to save for retirement and then assess the need for children’s college funding. A good plan can reward a family with a carefree 4-year college education.

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Although some parents are using personal loans to fund their child’s college education, more and more are jumping on the 529 bandwagon. The 529 college savings plan was first introduced to the market in 1996. It offers people a tax-advantaged way to save for the expense. With private colleges costing more than $30,000 a year and small state-run colleges costing $8,000 a year, parents are looking for ways to afford college.

How the 529 plan works

In former years, parents began using the prepaid tuition plan to fund college. These are accounts that allow parents to “buy” tuition for their child at today’s prices. The cost of college goes up annually, and having a cap on it helps parents afford it. Parents come out ahead if the tuition costs rise faster than average. The problem with these accounts, though, is they are not for everyone. For people who start saving early on, they can work really well. But for those Americans who don’t start saving until the child is already in high school, they typically don’t bring the return people need. It may be better for them to invest in stocks right away because of the higher return on investment.

The 529 plan, on the other hand, is a little different than a prepaid tuition fund in that it is an actual saving account. Individuals can invest in a pool of stock and bond investments with this tool. Asset allocation will be more aggressive for young children and less aggressive for older children. The true value of these accounts is their flexibility and their tax-free status. When your child reaches the right age to go to college, the money is withdrawn from the account and can be put toward education-related expense. That includes tuition, computers, books, room and board and other campus expenses.

Advantages and disadvantages of the account

The biggest advantages of the 529 account are its flexibility and freedom of college choice. These accounts are great ways to fund college and can eliminate the need for costly personal loans. The tax savings too are another reason why many parents are jumping on them these days. Although each state has its own rules regarding this savings method, they remain viable options when it comes to dealing with huge college costs.

On the downside, the thing to remember about these plans is that they aren’t guaranteed. These accounts are serious investment risks and should be thought of that way. Because they are based on investments in a wide range of stocks and bonds, they could potentially lose value. Traditionally firms that manage these accounts start out with risky investments, but move on to less risky ones as your child gets closer to graduation from high school. If that happens when a child is going into college, it could spell disaster for the hopeful parent who thought the account would sustain the cause.

The 529 is affective regardless of criticisms

Despite the problems, the 529 is proving to be a lifesaver to many families. There is a risk, but account holders understand that. They are willing to take the chance if it means a better education funding plan will be at their disposal. Rather than having to rely on personal loans or family help to get a child through college, look into the 529 loan and see if it is the right loan product for you.

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Williams College in Massachusetts is facing financial aid cutbacks. More students will resort to personal loans as a result. (Photo: flickr.com)

More students are using personal loans to fund their college costs due to changes in financial aid policies. Along with the rest of the world, colleges and universities are feeling the financial strain of the recessionary economy. They are cutting spending, putting off new projects and programs and instituting hiring freezes. Some experts are speculating that schools soon will be forced to make more cutbacks in the financial aid programs.

Morton Schapiro, president of Massachusetts’ Williams College, is in just that position. Williams College has had a long-standing reputation for not considering a student’s financial situation when deciding on their acceptance. Called a “need-blind” policy, this is a way for students of varying income levels to get accepted to the school of their choice without having to worry about financing. Shapiro agreed that this policy may not be able to withstand the recession. “The major dial you turn for most financial crises is that you admit more students who can pay, as a way of increasing revenues…with the tremendous decline in wealth, I think fewer people will hold to the need-blind [policy].”

Even Worse News

Molly Corbett Broad, president of the American Council of Education, stated that endowments are getting smaller while enrollments are getting larger. “The farther down the food chain you go in terms of endowment per student,” she stated, “the harder it will be to sustain need-blind admissions.”

This change in policy could affect all universities and colleges on some level. Douglas Bennett of Indiana’s Earlham College, is one of the strong proponents of college admission reform. At Earlham College, almost 20 percent of the students are from low-income families and receive some form of financial aid. Bennett stated, “If you are truly need-blind, you can go broke…It is like writing a blank check to the world.”

Endowments

As of now only schools with large endowments are impervious to the recession, but even they are experiencing declines in funding. As Bennett added, “Nobody thinks the market will turn around and go back to do what it did before. That means everyone is having to plan for a more difficult and turbulent financial environment to bring our expenses in line with resources.” Students are bracing for the after effect of the economy by looking at second jobs, personal loans and family aid. They know that the scholarships and financial aid that once was available is no longer there.

The Goal of Educational Institutions

Regardless of the economy, the goal of colleges and universities is to make the degree accessible to as many students as possible. Many are looking at their projected budgets and project management scheduling as a sure-fire place to cut back. Stanford University is cutting five percent straight across the board in every department and cutting $45 million from its operating budget. The school is planning on issuing moderate yearly raises to staff in an effort to remain “committed to its financial aid” plan. Ms. Lapin, Stanford spokeswoman, added, “Maintaining access to Stanford for top students, regardless of costs, remains a top priority.”

Students of the Future

Students of the future face some hefty financing problems to fund their college years. Hopefully, with the help of personal loans, family assistance and part-time jobs, they will be able to complete their degrees. If colleges and universities are equally committed to making school affordable, sticking staunchly to their financial aid plans, students will be able to reach their goal of a higher education.