INFORMATION FOR PARENTS
This section was designed to provide for your family’s financial security. Family financial planning is crucial to the overall debt and default rates of students and families. Therefore, it is imperative to understand how to make the best-informed decisions around financing your child’s education. After reviewing this section, you will have a better understanding of financial aid and how you can financially assist your child through the college process.
Family Financial Planning in Five Steps!
Waiting until the ninth hour to find ways to pay for college can be very stressful and unpredictable as many students and families are not aware of how much a college education costs. Therefore, you should sit down as a family to research options before applying and begin planning as early as possible.
You can do this by following these five steps:
Step One: Create factors that are important to you and your family. Ask your child what do they want out of a college education, what their interests are, future endeavors, and what prospective schools they want to attend.
Step Two: Review annual income, monthly bills, bank accounts, retirement, and personal financial goals. This will give you a blueprint of where you stand financially and how much you can contribute annually to your child’s choices.
Step Three: Research prospective schools inline with your budget, major, and prospective locations to view the cost of attendance annually.
Step Four: Use the FAFSA4Caster to see what federal aid you may be eligible for before applying to college.
Step Five: Begin researching scholarship opportunities to help offset education expenses and defray your out of pocket expenses.
The answer to these questions will help you understand which prospective schools are affordable for your family situation.
FIRST come, FIRST served!
Completing the Free Application for Federal Student Aid (FAFSA) as early as October 1, 2016 increases your chances of qualifying for additional aid. You may complete the FAFSA by using your income from prior year’s taxes. Once you file your taxes, you can make a correction to the FAFSA with the updated tax information. Remember, financial aid is awarded on a first come first serve basis, so submit the FAFSA as early as possible!
Compare Financial Aid Offers
If your child is offered financial aid packages, review all aid, terms & conditions, and out of pocket expenses to see which option is best!
Parent PLUS Loans, Endorsing, and Co-Signing
There are long term financial consequences of sending your child to the school of their dreams as many students dream schools are not affordable. To cover costs, many parents and family members are borrowing Parent PLUS Loans from the Direct Loan Program, endorsing, and/or co-signing loans. If you are considering a PLUS loan, be sure that your child has exhausted all of their options before applying. Please note the current interest rate of a Parent PLUS Loan disbursed on or after July 1, 2016 is 6.31%.
Please be aware that YOU are responsible for repaying PLUS Loans. If you are planning to endorse or co-sign a loan, please understand all of the terms and conditions before signing. Endorsing and/or co-signing can have bad effects on your credit if the person fails to repay! According to the Department of Education, too many families have been borrowing PLUS loans or co-signing loans that they cannot repay. Therefore, please review your finances, loan types, and repayment options to determine if this is an option you can afford.
Negotiate with the Financial Aid Office
When speaking to the financial aid office, it is possible to negotiate the award package. Not all financial aid packages will be to your liking and/or reflect your family’s economic status. Schools understand that a parents’ financial situation may change at anytime. If you lose your job, fall ill, or have a drastic change in income, you should contact the financial aid office to review and discuss your extenuating circumstances. The representatives will use their professional judgment to try and provide additional assistance if there is funding available.
At What Costs?
Think about the costs of financing your child’s college education in relation to your financial goals. At what costs are you willing to endure for your child to seek a college education? The answer to this question may postpone your retirement or personal goals.
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