School Your Kids on College Financial Aid

Before It Schools Them

By Hayley Spencer

Watching your kids graduate from college is one of the proudest moments that a parent can experience. However, the arrival of student loan bills can spoil your kids’ excitement of being newly graduated. Being upfront about the pitfalls of student loans and financial aid can help you and your family to save in the long run.

Before College

Make sure your kids know their options for funding college. Being upfront about the cost of college and the options for financing it is the best way to keep your kids out of financial trouble. Depending on your background and financial circumstances, your kids could be eligible for a scholarship, federal financial aid, or a loan to fund their expenses.

Applying for Financial Aid for College

There are three types of federal student aid: grants, loans and work-study programs. Grants do not have to be repaid, whereas student loans must be repaid with interest. Work-study programs allow undergraduate and graduate students to contribute to the cost of their education by working part-time for their school or an external employer.

To qualify for financial aid, students must demonstrate financial need. If your family income is low, encourage your child to fill in a Free Application for Federal Student Aid (FAFSA). You will need to provide detailed information about your family’s income, which will be used to work out how much aid your child is entitled to in the form of grants and loans. It is important to get this application in on time and with all the relevant information, so set some time aside to help your child well in advance of the deadline.

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Scholarships

Scholarships are offered by some schools as an alternative way for students to pay for college. Certain organizations and companies also offer scholarships for students from particular backgrounds. Search online for college financial aid programs run by companies and organizations in your local area. Helping your child to find funding could save them a lot of money.

Loans

Students who apply for loans are sometimes tempted to borrow as much money as possible to spend while they are in college. Make sure your kids are aware of exactly how much they will have to repay, and encourage them to live frugally and support themselves through working instead of getting into a lot of debt.

Repaying Loans

Soon after your child graduates, demands for loan repayments will start arriving. The thought of having to repay so much money can be daunting for a young person who is just getting used to working and living independently. Help your child to make a budget that allows them to meet all their monthly expenses while leaving enough money to meet the student loan repayments.

Be Supportive

Never get angry if your kids make a financial mistake. Being understanding and supportive encourages young people to approach you when they have a problem. On the other hand, don’t shy away from talking about financial matters: you need to school your kids on college financial aid so they can get the most out of their schooling without breaking the bank.

Guest post contributed by Hayley Spencer for EasyFinance.com – providers of various financial products. Visit Easy Finance to find out more about their services.

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