For many families today, the thought of paying for a college education can be quite daunting. Scholarships make a great way to fund this investment in a child’s future.

There are many different types of scholarships. Some are based on performance on standardized tests, some on financial need, and others on athletic ability. These scholarships all seem normal – and to be frank – well earned in one way or another. However, a new type of scholarship is hitting the market. Many schools have started offering scholarships to students who come from middle-income families and demonstrate academic promise.

“We certainly have found that with the recession in recent years, many middle-income families and even some higher-income families are looking for more aid,” said Earl Retif, vice president of enrollment management at Tulane University. Read the rest of this entry »

It’s pretty common knowledge that most college students can’t afford to go to school without taking some sort of financial aid these days. Some receive scholarships, some apply for federal financial aid, and some take out private loans from the government. However, the majority (62 percent) rely on loans from their parents, according to research from the University of Michigan‘s Patrick Wightman.

In his research, Wightman found that parents are helping their children earn a higher education to the tune of about $12,185 per student per year. This money goes toward everything from tuition to reoccurring expenses, such as rent and bills. This is a new trend concerning how students pay for their higher education and living expenses, probably caused by the fact that 25 percent of young adults between 18 and 34 years old are not making enough money at their jobs to cover basic living needs. Read the rest of this entry »

When most students start receiving information about the financial costs of a higher education, they are seniors in high school. Up until that point, many are simply told that college is expensive and they should start saving, but that’s about it. Now, a new tool has been designed to help families understand how much a higher education will cost, which allows families to then begin planning on how to pay for it.

This tool is called the Net Price Calculator (NPC) and was created to be in accordance with 2008′s Higher Education Opportunity Act. Under this act, every institute of higher education that allows students to use federal aid to pay for their education must have an NPC on their website so that students can calculate the price of attending that school. Students can put in their own personal data on this NPC and the calculator shows them the net price of attending that school (tuition, room, and board included). Read the rest of this entry »

Student loan borrowers are furious at Sallie Mae. The largest provider of student loans in the U.S. charges a $50 forbearance fee to unemployed borrowers. Those who can’t pay the $50 are put into default.

The unemployment fee has college grads and students fighting the system with a popular petition. With 50,000 supporters in all 50 states, the campaign at Change.org has the country listening.

Stef Gray, a student loan borrower through Sallie Mae and a recent grad from a public college, heads the campaign at Change.org.

“What Sallie Mae is doing is wrong,” Gray said. “My loan already grows by more than $1,000 in interest every three months when it’s in forbearance, and I pay almost 10% in interest because my parents weren’t alive to cosign my loans.”

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Anahit Grigoryan is like many students in the USA. For a long time, she has wanted to study medicine and become a doctor. She graduated from high school in 2009 and enrolled in a community college with plans of transferring to a four-year school in the future.

However, Grigoryan cannot take the MCAT test, nor will she ever be able to take the Hippocratic Oath. Why is this? Because Grigoryan is an illegal immigrant in the USA, which makes it impossible for her to have a driver’s license, a legitimate job, or even a social security number.

“My whole life is a lie,” she said. “Every time someone asks me why I don’t drive I have to make up some sort of excuse. I feel embarrassed.”

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If you’re looking for a reason to drop out of college, then you may want to look to Peter Thiel. The co-founder of Paypal, and Facebook investor, is convincing some bright, young adults not to go to college. He gave out a $100,000 grant to 24 college-age entrepreneurs to pursue their business ventures.

“It’s good for some people, maybe most people to stay in school, but it is not good for everybody,” Thiel said. “There are people who are inventors, who are entrepreneurs for whom staying in school is not the right thing. And a lot of these ideas there’s a certain right time and place for when they should be built. And if people have a passionate, great idea that is going to change the world, they should get started on it right away.”

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Several new studies found that an American college education may not be worth the money. The Pew Research Foundation polled 2,142 adults and  about what they think of higher education and its hefty price tag.

Pew found:

• More than half (57 percent) of Americans polled said that a college education isn’t worth the money.

• A large majority (75 percent) said that a college education is unaffordable.

On the other hand, the majority of Americans still believe that a higher education is important, as further research showed:

• Ninety-four percent of parents said they want, and expect, their children to go to college.

• Eighty-six percent of graduates said their degree was a good investment.

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At a time when student loan debt is steadily on the rise, it’s nice to know that Sallie Mae is giving its borrowers a break, even if it is a small one.

Sallie Mae is decreasing its rates to 9.875 percent plus LIBOR, the rate of interest that banks can charge each other when competing for loans, in hopes of generating more business. After LIBOR, the change is merely a .5 percent rate reduction. Consumer analysts say it is unlikely that the new rate will bring in more borrowers.

Sallie Mae’s private loans, which carry higher interest rates than subsidized federal loans, are considered a last resort after scholarships, grants and government-backed loans. “This private student loan company is cutting interest rates to help bridge the gap when students and their families use up all other financial aid resources,” said Sallie Mae executive Charlie Rocha.

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A college’s financial aid policy isn’t usually the first thing students consider when looking for colleges. Students look at the programs offered, the location, the school’s reputation and campus culture. They usually think of the schools they apply to as either “reach” schools or “safety” schools.

Carol Stack and Ruth Vedvik, authors of The Financial Aid Handbook: Getting the Education You Want for the Price You Can Afford, recommend that students consider two more important categories: funded and unfunded. “Funded” colleges and universities are the ones that will give you a significant amount of scholarship money and “unfunded” colleges are the ones that won’t. Vedvik and Stack make a strong argument for not applying for unfunded programs, regardless of a school’s reputation.

Stack and Vedvik have written a book not only to help students find financial aid, but to also pick the colleges that will provide financial aid. As both tuition and student debt rise, this advice could not be more timely.

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With alarming spikes in tuition, college students and their parents are wondering if a higher education is obtainable only to the wealthy. However, there’s hope on the horizon. Uncle Sam is lending a hand with several tax breaks that could save families thousands.

Whether you’re a college student and claiming yourself this year, or you’re a parent who has a child in school, check out these tax breaks that are sure to pick up on some of the tuition tab:

Credits:

The American Opportunity Credit is similar to 2009′s Hope Credit, but even better. The credit was created to offset the increasing costs of tuition, and it provides up to $2,500 per college student. It allows taxpayers to claim tuition and certain fees for higher education, but these expenses can only be claimed for the first four years of college. Parents can receive a credit of up to $7,500 if they claim three qualifying college students.

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