Financial planning for college

What you need to know to plan for college financially

WRITTEN BY: Janelle Vreeland
Financial planning for college

Planning for the future, seems like a novel concept—unfortunately for those who want to attend college and lack the means to pay for it, it’s more than just a concept—it’s their reality. With 13 percent of the population in the U.S. are below the poverty level as of 2007, Financial Planning for College can be a discouraging task.

However, the government offers need based grants, and universities offer scholarships, according to College Grants Database. The majority of families in the U.S. have to plan for their children’s future and figure out ways of saving for college. Financial planning for college means something different for every person. This means developing a strategy and researching all the available options that work best for you.

“Work on your grades and research the schools. The top 25 percent to the top third of a class are going to have more schools interested in them and offering better financial aid packets. Schools that are test optional don’t factor in ACT or SAT scores in their evaluation, these schools can be research at CollegeBoard.com,” said Lynn O'Shaughnessy, author of  “The College Solution,” an Amazon bestseller, and consulting director of college planning, K-12 Program, UCSD Academic Connections.

Students in particular should be aware of how to plan for their college education. Researching what “free money” is available will help pay for the cost of tuition. “Free money” is grants from private distributors, the government or the university. Grants are not loans or scholarships; they are simply money that is given to students who are in need of financial assistance in pursuing further education. This money has no-strings-attached and does not need to be repaid, according to College Grant Database.

There is a variety of grants available to students and there is no limit to the amount students are allowed to apply for, however grants are divided amongst the students who meet the criteria. Financial planning for college includes researching and evaluating all your options, while applying to as many scholarships and grants available.

Private scholarships are less productive then the scholarships provided by the university, according to O’Shaughnessy. Students can access scholarship information at TheirAid.com. “Students should also research ‘talent scholarships.’ These are separate scholarships, for example Lake Forest College offers a Science scholarship,” said O’Shaughnessy. These types of scholarships are much easier to find and apply for, while most universities provide application information on their websites.

Financial planning for college should also include budgeting for the additional costs of attending college—living expenses—room and board, technology fees, books, and supplies based on your major lab fees or studio fees. Students cannot expect that scholarships and grants will cover the entire “college nut,” these costs are typically paid out of pocket.

These are additional expenses that many students and their parents don’t realize when planning for college. There is also a difference in price between state and private schools, as well as a price difference between different levels of private schools and whether the school receives federal funding. There are also different levels of schools. According to O’Shaughnessy, “reach schools, which are schools that students attempt to get accepted to, but their financial aid packets will offer a lot of loans instead of grants; safe schools—schools that are more realistic options for students, will offer more grants as opposed to loans.”

Student loans are also available. However there are significant differences between government and private loans. “Stanford loans or Direct School Loans have a limit. Federal loans charge the same interest rate for every student, while private loans can change their interest rates and charge different students different amounts,” said O’Shaughnessy.

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