Alternatives to College Loans
With all the talk about predatory lending, dishonest practices within financial aid advisory departments at well-known colleges and universities, and the collection companies trying to browbeat borrowers into paying more than they can truly afford, future college students are looking for alternatives to college loans to pay for their education.
The two main answers are scholarships and grants. The beauty of both is obvious. They are not loans. They do not need to be repaid. It is a dream come true for some college hopefuls.
When beginning the application process for any college, information should be collected and sent to the financial aid advisory department of the school. But now, students have the ability to be proactive in the process. The Free Application for Federal Student Aid, or FAFSA, is a form that can be filled out (for free) online or with the financial aid department. This will give students a calculation of how much they are eligible to receive from the federal government grant programs.
The Pell Grant is awarded on a state-by-state level, and each state has a pre-determined amount to give eligible students. There are also other grants that can be awarded, like the Academic Competitiveness Grant, the National SMART Grant, and the Supplementary Educational Opportunity Grant. These are all financial awards that will not need to be repaid.
The Federal Supplementary Educational Opportunity grant is one that is awarded to students in amounts of $200 through $2000, depending on the information received from the FAFSA forms. These are able to be renewed each year, and will be recalculated each year.
The National SMART Grant is available to students in their third and fourth year of undergraduate degrees. They can be up to $4000 for each of the third and fourth year for certain science and math programs. The reason these are offered is to ‘retain talent’ in these increasingly important degree programs. These are contingent upon the student maintaining full-time status, and maintaining a 3.0 grade point average for the degree required classes.
For students that are completing what are considered “rigorous” secondary school programs, or advanced placement courses, there are grants in the Academic Competitiveness category. These can be up to $750 for a first year student. They can also be awarded to students that take International Baccalaureate courses with exams scores of 4 or higher
These are great alternatives to student loans, and they clearly show the ever increasing importance of our children’s education being a serious factor from the day they are born. Reducing the amount of future debt for your student is the best gift you can give, because it will have the potential to benefit them for a lifetime.