A Letter from Senator Jack Reed:
Helping Students Cash In On Financial Aid Opportunities
A college education is a sound investment that can open countless doors of economic opportunity. But with the cost of college rising and the continuing economic downturn, many parents are understandably worried about paying for their children's higher education.
According to a recent estimate by the College Board, the average annual cost of a four-year college is $25,143 at private schools and $6,585 at public institutions, an increase of approximately 6 percent over last year.
However, over $143 billion in student financial aid will be available this year. The key is knowing how to get it.
If students need help paying for college but will not be able to attend the workshop, here are a few key points they should know:
First, apply early: Students who need financial aid for the 2009-2010 school year should already be working to fill out the Free Application for Federal Student Aid (FAFSA), the federal student aid form that all students must complete to receive tuition assistance.
The FAFSA can not be submitted until January 1, 2009, but parents can go to www.fafsa.ed.gov and immediately apply for a PIN, which can be used as a digital signature when the form is completed. It is best to file early since deadlines may vary by state and institution.
Second, know your options.
A recent study by the American Council on Education found that an estimated 1.5 million students who were likely eligible to receive Pell Grants did not apply for financial aid.
There are three main forms of financial aid: need-based grants; loans, which must be repaid; and merit-based scholarships.
Need-based aid, such as Pell Grants are awarded solely on the basis of financial need and do not have to be repaid. In 2005-06, approximately 13,200 Rhode Island students supplemented their college tuition with the help of this federal aid.
Last year, I helped pass a law to provide Rhode Island students with an additional $85 million in Pell Grants over the next five years, including another $7.8 million in grant aid available to college-bound Rhode Island students for this school year. To help students and families borrowing for college, this law also lowered the interest rates on new subsidized Stafford loans to undergraduate students, capped monthly loan payments at 15 percent of an individual's discretionary income, and offered complete loan forgiveness to students who continue in public service professions for 10 years, including teachers, nurses, and librarians.
There are two other need-based grant programs: the Supplemental Educational Opportunity Grants and the Leveraging Educational Assistance Partnership or LEAP program, known here in Rhode Island as the State Grant program. Last year, Rhode Island students received approximately $7.2 million in additional federal grant aid through the SEOG and LEAP programs. Like Pell Grants, this aid does not have to be repaid.
There are also two new federal grant aid programs: Academic Competitiveness Grants and National SMART Grants, which together provided nearly 2,100 Rhode Island students with over $2.2 million in additional grant aid in 2006-07. However, to be eligible for these grants, students must meet certain minimum GPA and curriculum requirements. Students may visit www.studentaid.ed.gov to learn if you qualify. This federal website, along with Rhode Island'swww.riheaa.org, also include free search engines for finding merit-based scholarships.
Additionally, the federal government provides tax breaks for students and families paying for higher education, including the Hope Scholarship and Lifetime Learning tax credits, and deductions for interest payments on student loans.
Regardless of income, every student with the talent and drive to attend college should have the opportunity to go.
It is never too early to begin planning, and, as with everything related to a good education, it pays to do your homework.
United States Senator