Student loans for middle-income students are available for those willing to put in the legwork. (Photo Credit: CC BY-ND/Federal Student Loan Debt)

Financial aid is a necessity for many low- to middle-income students and their families. Thankfully, there are student loan programs designed specifically for people who fall within the low- to middle-income brackets. Banknote suggests those looking for ways to pay for college use this three-pronged attack.

Aim high for need-based qualification

If a student doesn’t qualify for student loans at one college, it is quite possible that student could qualify at a more expensive university. Sally Donahue, Harvard’s director of financial aid, points out to Banknote that need-based financial aid is contingent upon income and assets, relative to admission costs. Thus, not qualifying at a $20,000-per-year school doesn’t mean a $60,000-per-year option is out of the question.

“We have probably 600 families with incomes over $180,000 receiving grant aid right now, and that’s usually because they have two or three students in high-cost colleges,” says Donahue. “It just depends on where you go.”

Harvard happens to be a “no-loan” school that enables students to obtain the necessary financial aid via grants, scholarships and work-study programs. The Institute for College Access and Success indicates that there are more than 50 such no-loan schools across the U.S. from which to choose. Keep in mind that most require family income to be below $50,000 annually.

Tax credits offer long-term help

Carol Stack, co-author of “The Financial Aid Handbook,” claims that 2011 is a banner year for student loan tax credits. Specifically, the American Opportunity Credit is one to watch. Extended through 2012, this credit can mean an extra $2,500 for families, as long as at least $4,000 is spent each year on college-related expenses. Intended for the first four years of post-secondary education, the American Opportunity Credit applies 100 percent to the first $2,000 spent during the tax year, and 24 percent to the next $2,000. At least half-time enrollment is required and family income must not exceed $160,000 per year. Check with the IRS for more information.

The Lifetime Learning Credit is great for part-time students and those who attend college for more than four years. Approved college expenses up to $10,000 are reimbursed at a 20 percent clip.

Good aid for good students

Merit-based aid exists for men and women who may not qualify for need-based student loans, grants or scholarships. Collegiate financial aid search engines, like College Navigator and Meritaid.com, state that $11 billion in merit-based aid is distributed annually. Thus, there are plenty of opportunities for good students to take advantage. Chris Long from Cappex, a Meritaid.com sister company, advises students to find schools outside their geographic area that would benefit from their test scores and GPA.

“You should also apply to schools where you’re at the upper end of the academic scale. You’re going to be very attractive to those schools because they want to increase their average GPA, SAT and ACT (scores),” he said.

Sources

Bankrate

Cappex

College Navigator

IRS.gov

Considering scholarships and grants

Each year, parents and students search for financial aid resources to help pay for college costs. While it can be overwhelming to think about, particularly when prior financial preparations have not been made, financial aid for college can be a life saver. Financial assistance for college can be acquired through grants, loans, and work-study programs, which help students to work while paying for school.

Educational grants

The Pell Grant is one of the most popular forms of financial assistance for undergraduate students. With a Pell Grant, students may receive up to approximately $4,050 that does not have to be repaid. Another popular federal grant is the Supplemental Educational Opportunity Grant (SEOG), which is available for undergraduate students who can demonstrate extreme financial need. With SEOGs qualifying students may receive up to $4,000 for each year they attend.

College scholarships

Scholarships are another option for financing a college education. Like grants, scholarships do not have to be repaid. However, scholarships differ from government grants in that they are awarded based on specific academic criteria. If students who receive scholarships fail to continue satisfying the minimum requirements, usually include a specified grade point average or participation in a sport or other activity, scholarships can be withdrawn.

Compared to the relatively few government options for educational financing, scholarships are available and numerous and a student can often qualify for more than one at a time. Scholarships are generally awarded by non-profit organizations, and there are literally thousands of them. Students can apply for more than one scholarship at a time and, if enough scholarships are received, they can cover the entire cost of a student’s college education.

Plan ahead

No matter how you pay for college, it’s best to begin exploring options and making investments as early as possible in a child’s pre-college education. Financial aid, grants, and scholarships are widely available, but it’s a good idea to apply for them before the student actually needs them. Most students wait to apply for federal financial aid until they’re seeking admission to a college or university. Very few are aware that applications for government aid can be made ahead of time. In fact, it’s recommended that anyone considering applying for government-sponsored financial aid should apply sooner, rather than later because aid is awarded on a first-come, first-served basis. It is advisable to begin applying for government aid in January of the year that a student intends to commence his or her college education.

A necessary luxury

Attending college is a luxury, there’s no arguing with that.  In terms of both career opportunities and personal achievement, however, a higher education is also something of a necessity. Although a college education is an expensive undertaking, financial assistance is available and should be utilized whenever possible. For further information and answers to questions about college financial aid, visit the Department of Education website at www.ed.gov. For help finding scholarship opportunities, visit www.fastweb.com, which maintains a database of more than 175,000 available scholarships.

(Image by Bernt Rostad, Flickr.com)

Looking at the storms that are blasting through the United States, the theory being spread from coast to coast is that this may just be the top ten winter snowstorms. In fact, the Midwest experienced its fourth worst storm since the 1950’s! While some people enjoyed the snow coming down, others became worried that increasing electricity and gas bills will drive their expenses sky high this season. Help is available to such people in the form of short term loans.

Weather May Ruin the Holidays

With Christmas just around the corner, a snowstorm like the one attacking New York and New England is making a lot of people worried. Gas and electric bills are going up, with low income families being the worst hit this season. Utility bills have almost doubled since 2000, which is far ahead of earnings in the same period. People who are behind in their utility bills may need to look for ways to keep their utilities connected. There are some states, however, where it is against the law for utility companies to shut off the heat or electricity during the months of November through March due to the extremely cold weather these states face. Check with your state’s laws before contending a shut-off notice during the winter.

While some may have the money required to pay their bills, others may end up looking for short term loans and/or grants to keep them out of trouble. Making a choice between celebrating Christmas and paying utility bills can be difficult, and people who are going through the tough times may be left with no alternatives other than borrowing money.

Grants Not Enough

The government has made an effort to help people by making energy assistance grants available to all who may qualify. Applications increased extensively last winter, so Congress decided to double the amount to be awarded this year to $5.1 billion. However, applications for assistance have increased from 6.1 to 8.1 million this year. This, in turn, will mean that either the grants will shrink in size or more applications will be turned down. Meanwhile, people are resorting to desperate measures, including kerosene stoves for heat and candles for light.

Critical Period

Christmas has arrived, and with it, bad weather. It is imperative for people to manage to stay healthy during this time, but doing so without money may be impossible. Rather than spend time freezing and watching others celebrating the holiday, people who can apply for a short term loan may be able to get by during this time. Not celebrating the holiday may be better than freezing to death, which could be a reality for some people. Even if you have less than stellar credit, the money is available to you if you spend it wisely. Keep yourself and your family warm in the first place and celebrate the holiday with whatever is left. You can still make ends meet without much difficulty if you are wise with your cash.

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