College Admission Help

College Admission Help: Paying For College In Tough Times

(CBS) High School seniors and their parents all over the country are struggling to figure out how they'll pay for college.

No doubt, they're overwhelmed with the cumbersome and confusing "FAFSA" forms - short for Free Application for Federal Student Aid.

Complicating matters further is the state of the economy, with government aid and college endowments shrinking - not to mention the bottom lines of many households.

But in The Early Show Saturday Edition's "Bargainista" segment recently, financial contributor Vera Gibbons explained how to get the most financial aid possible - all you're entitled to - as well as addressing questions posed on-camera by viewers, and some that were e-mailed in.

VERA'S VITAL TIPS TO GET THE MOST MONEY OUT OF THE FINANCIAL AID SYSTEM:

Submit FAFSA forms early
That's the first step to getting federal and state aid and money from many colleges. Deadlines are all over the map, literally - differing from state-to-state and college-to-college - so don't delay.

Search for scholarships
Look on free Web sites such as FastWeb.com. Every dollar you win in scholarships is a dollar less you have to borrow or pull from savings.

Know your tax breaks
Don't forget about the education tax benefits, such as the Hope Scholarship tax credit, Lifetime Learning tax credit, and the Tuition and Fees Deduction. Congress expanded the Hope Scholarship for 2009 and 2010 as part of the stimulus bill, increasing the amount to $2,500 from $1,800 and expanding it from two years to four. Lawmakers also significantly increased the income phase-outs, made it partially refundable, and allowed funds to go for textbooks (a huge money drain) in addition to tuition and fees.

"Financial aid applications are up," Gibbons told co-anchor Chris Wragge. "Schools are doing everything they can to not cut the financial aid budgets. They're cutting other areas because they want to keep these kids in school, and they want to make sure the incoming freshmen actually get in - and get kids to stay in.

One viewer asked Gibbons how to "navigate through the maze of red tape to get to the (financial aid) dollars.

“First of all, you want to get the (FAFSA form), then look into the scholarships, and then you want to set up the '529' plan, if she hasn't done so already. You want to get into an age-based allocation plan that's aggressive when your child is younger, [and] gradually becomes more conservative as the child reaches college age. A couple of good Web sites: SavingforCollege.com and FinAid.Org.

One man who told Gibbons he's unemployed and tried unsuccessfully to get more financial aid for his son in college wanted to know what he could do to get that additional help.

“My hunch,” Gibbons responded, “is that he didn't go about it the right way. You've got to put in a request for a professional judgment review from your school to see about getting additional aid. He might not be needy enough. Only the neediest of needy are actually getting aid. Beyond that, look at the loans. Stafford loans, PLUS loans, they're out there. There are (reasonable) payment terms. Private loans are getting more difficult to get in this environment.”

The FAFSA form is “a monster,” Gibbons acknowledged. “It is a difficult form to fill out, like filling out a tax form. However, it's only six pages long. ... The key is to get these things in as early as possible, because the free money goes fast, and then you do want to look for the scholarships. FastWeb.com is the place to go for that. ... The average award is a couple of thousand dollars.”



College Admission Help: Paying For College In Tough Times