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5 Little-Known Secrets To Paying For College If You Don't
Get Enough Financial Aid...
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by Randall F. Rothstein, CPA, PFS, CCPS
Certified Public Accountant
Accredited Personal Financial Specialist
Certified College Planning Specialist
In this article, we're going to talk about innovative payment options just in case you didn't get enough money for your child's college education.
Or, if you're the parent of a high school Junior, these payment options will help you to understand where to turn if the schools let you down and you still need more money for college.
Well, one thing's for certain...
It's Getting Tougher & Tougher To Get A Great Financial Aid Package From Colleges These Days!
Why Is This?
To begin with, colleges and universities are receiving less money from the Federal and State governments. There is also a trend towards less FREE money and more loans being given out to help fund a college education.
All of these things have led to students receiving less money than they should be entitled to under the financial aid formulas.
Some schools, particularly the private universities, have more flexibility when it comes to negotiating for a better financial aid package, while others, like state colleges, have very little room to do anything.
This means it is imperative for you as a parent to understand ALL of the payment options available to you just in case the college your child is dying to go to comes up short when awarding you financial aid.
Here Are The 5 Little-Known Secrets To Paying For College If You Don't Get Enough Financial Aid:
Secret #1: Have Your Child Start Out At A State School And Then Transfer To A Private College.
If your child gets accepted to both private universities and state schools, and he/she prefers to go to one of the private schools - the first thing you need to look at is how much is it really going to cost you to send him/her to that school.
If the private university offers you an excellent package, which makes it approximately the same cost to you whether you send your child to private, or state - the answer seems pretty simple - send your child to their top choice.
If, however, the private university offers you a less-than-competitive package, and sending your child there will put you deep into debt, my recommendation is to think about sending him/her to a state school for two years, and then have them transfer over to a private university.
You will probably end up saving yourself about $30,000, and your child will end up with a diploma from a private university to boot.
However, I must caution you: If your son/daughter doesn't plan to get top grades (A- or above) at the state school, they're going to have a tough time transferring over to a top private university.
Also, schools tend NOT to offer their best packages to transfer students.
Keep these things in mind before you opt to take advantage of this.
Secret #2: Think About Sending Your Child To A College That Offers Cooperative Education.
About 900 colleges and universities across the country offer programs where students can alternate between full-time study, and a full-time job.
This differs from work/study in that work/study jobs tend to be part-time jobs that students work at for a couple of hours a day until they've earned the amount of the award.
On the other hand, cooperative education offers periods of full-time employment in jobs that the student is interested in pursuing after they graduate.
The student usually makes enough money to pay for a good portion of tuition, and they have a much better chance of landing a good job after they graduate.
The only downfall is it will probably take 5 years to graduate.
Secret #3: Have Your Child Take The Military Route.
There are two different options here.
The first one is the Reserve Officer Training Corps, which has branches at many colleges. To qualify for an ROTC Scholarship which usually covers full or partial tuition plus $100 a month allowance, your child must apply in his/her senior year of high school. They should also have good grades and 1200 or above SAT scores.
The other option is applying to one of the service academies, which are extremely difficult to get into. To apply, your child must have excellent grades and SAT scores, pass a physical, and have a recommendation from a Congressman or Senator. If your child can get past all of the above, they will enjoy a FREE college education.
The only downside to going the military route is your child will be required to serve several years in the military after they graduate.
Secret #4: Look Into Outside Scholarships To Help Pay For College.
True, private scholarships only make up 1% of all monies available for paying for college. But, you definitely won't get any of this money if you don't apply for it.
Caution - Don't just use any old scholarship search company or even worse internet searches that promise millions of dollars of unclaimed scholarships. Most of these search services are bogus and will charge you an arm and a leg for their service.
Secret #5: Try Borrowing From An Innovative Loan Program.
Before you look into any type of loan programs, do your best to qualify for federally subsidized loans, which are interest-free and principal free until your child graduates.
If you still need to borrow more money, try borrowing from your 401k plan or a pension plan. Many plans will allow you to borrow up to 50% of the value of the plan or up to $50,000 interest-free.
You should also think about taking out a home equity loan instead of a commercial loan since all of your interest payments will be tax deductible.