Higher Education Without Any Planning: Is It Possible?
Recently, the experienced researchers of Stanford University have performed an amazing test: they offered some children a few pieces of tasty marshmallow, but promised to give twice more for those, who would wait a bit. A significant part of kids chose to treat the proposed amount immediately, without any waiting.
This experiment showed the points of view of the most contemporary people. In addition it explains why so many modern parents haven’t saved requested sum of money for the future studying of their kids in college.
The matter is that it seems quite late to start saving, when your son or daughter has been already 12 or 14 years old. In practice it happens that nine of ten parents start reading college brochures, when their children are in preschool, but only the half of them thinks about special loan programs. The process is rather complicated indeed. However, there are some strategies, which will help you to go ahead without any worries or panic.
Here is a list of our recommendations:
Start saving as soon as you can
If you haven’t started to do it yet, today it is high time to begin. Remember, that every dollar you save today will be suitable in future; as you won’t have to borrow this sum later. You see, in many cases you will need to repay $2, returning the credit money. Of course, the so-called tax credit is available in most American states, but it is always better to count on personal strength.
Think about affordable opportunities
So, you have already begun saving some cash, so now it is high time to choose the place for future higher education. Under these conditions there is one typical mistake: people often choose the college, because somebody has said that it is available. – However, in practice, the more respectable place you choose the wider list of various loan programs it is ready to propose. Those, who investigate the matter properly, usually save up to the help of their money. Using the special online calculator, estimate the cost. As a rule, the average American family needs 4-6 years to return the total sum.
Discover the main rules of financial aid
There are a lot of special grants or scholarships you can get for your education. First of all, pay attention to the famous Free Application, which is a part of Federal Student Aid (abbreviated FAFSA). Many modern people use it as the main source of the federal help. The Pell Grant is ready to provide up to $6000 per year for every student. The final sum usually depends on the future student’s income. Most part of famous collages prefers to use FAFSA, when they are calculating the financial aid. It takes into account the family income as well as the tax return during two year before the student is enrolled. It is highly recommended to avoid the all possible cashing out investments.
However, don’t forget about different private (or individual) scholarships, provided to parents by their employers. The same thing can be done by the local Rotary Club, Chamber of Commerce, or even a church as well. The full list of available programs can be seen on the specialized sites. The Google search can help you, of course. In addition, we can’t but mention that there are special programs for some categories of people, for example, for military veterans or soldiers. That is why it is necessary to start searching as early as it is possible.
Having chosen this opportunity of getting the necessary amount of money for education, you have to mind that usually collages are rather busy preparing the financial aid package at your request. Why? – You see, this process can be complicated and the main reason is that in fact the school officials should do everything twice. As a rule, they do not use the forms and informational sources, provided by the FAFSA only. They require a great load of various financial pieces of information, involving, of course, asserts. In addition you have to know that there is a wide-spread practice, when the college presents the future student an offer, containing the facts, which are rather difficult for ordinary person’s understanding. What is why under some conditions you may ask the assistance to compare the conditions with ones but proposed by other educational institutions. In some cases, for example, the loans may resemble the grants. That is why you have to be rather careful, giving your preference to something special. You see, for higher education you don’t need a standardized disclosure as in the case of new car purchase, mortgage obtaining or credit card receiving. By the way, you have to understand that college is not obligatory on your side, as sometimes they are trying to propose you something else. Some parents are sure that the educational institutions want to propose the most favorable choices. Unfortunately, it is not true. – This is nothing but business, as the representatives need revenue, they are not charities. However, almost always you can negotiate, of course. You see, a plenty of modern colleges are lack of students that is the main reason why they often compromise. The most typical wrong belief is the money is usually given to people who need them more. This is a common mistake. If you want to get them, just be aggressive and you will succeed.
Ask your relatives for help
Almost all of us have relatives, who will be even glad to help us in entering the college. In accordance with some specialists’ points of view, every fifth family in the USA gets a required sum of money from their grandparents, aunts, uncles, elder brother and sisters, or even cousins. Think about the people around you and ask them for help. We are almost sure that somebody will definitely give you required money.
Mind the types of loans
Are you still short of necessary funds? If your answer is positive, here is another piece of advice for you. However, we would like to warn you that it is the scariest one for the most part of the contemporary clients. Have you already understood what we are talking about? – Loans, of course! However, under these conditions it is strongly recommended to think carefully and think again and again about everything. As you perhaps understand the loan sum shouldn’t be higher than the starting salary level after they graduate. Initially, it is necessary to begin with the federal loans. Why? – The matter is that they have the most favorable repayment terms. In addition we would like to remind that the repayments are usually tied to the client’s average income. The available sums are the following:
- $5,500 for freshmen;
- $6,500 for sophomores;
- $7,500 for upperclassmen;
As a rule, the total sum doesn’t exceed $27,000, but every case is investigated separately, as every situation is unique.
The experts, experienced in this sphere advise not to borrow the sum, which is higher than the half of the annual income of the family. Parents are responsible for the loan repayment. Pay attention to the so-called private loans, as they may be rather lower, more flexible and more convenient. Why do we find this paragraph to be rather important? – You see, in accordance with some statistics data, about 3 million of contemporary Americans, who are over 60 years old, are still paying off the loans, which have been taken for kids’ education.
Tax credits shouldn’t be forgotten
Another important source of receiving money for college education is to involve the so-called tax credits. If the average income of the family is about $180,000, you may get up to $2,500 a year. Of course, they can be a rather favorable help for the families, especially for those, who have some children.
In accordance with the law, existing on the territory of the USA, modern parents, are free to ask up to $ 2,500 of the so-called tax credit for their kids’ education and all possible related expenses. The program usually works during the first 4 years starting from the beginning of the child’s educational process.
Here are the examples of the maximum amount of typical loans:
- for single parents is up to 80 thousand dollars;
- for married couples – up to 160 thousand dollars.
By the way there is a lifelong loan for education. Please mind the very important fact that there are no restrictions as to how many times you will take a common loan for lifelong education. Parents can make up to 2 thousand dollars and cover the payment for studying process, required supplies and necessary equipment.