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JUNIOR JOURNAL: Finding College Financial Aid in 2010:

Most people think of April 15 as the time to file their taxes. For families applying for financial aid for a child going to college, January is the month to remember. That’s the best time to file the Free Application for Federal Student Aid, also known as the FAFSA.  The form can be procured through the organization website, via phone and in many high schools.

The FAFSA is used by the federal government to calculate the minimum amount your family is expected to contribute to your child’s college expenses and whether or not you qualify for government aid. You’ll need to provide information about family income, assets and other financial details.

Based on your financial need, a college may offer a combination of grants, loans and work-study. Grant money does not have to be repaid. Typically, students are offered loans, but they also may be extended to parents if needed. Make sure to take advantage of all your federal options first; the interest rates are much better, as are the repayment terms. Work-study programs on campus make balancing working and studying easier while defraying school expenses.

Taking out loans is a significant responsibility. With careful planning, however, the reward can justify the investment. According to the College Board, median income for families in which a parent has at least a four-year college degree is more than $50,000 per year higher than for those in which no parent has more than a high school education.

The current economy is creating more financial need for families across all income levels. However, “Families who show income and assets exceeding $80,000 will likely see more loan than grant offers and be expected to make a bigger personal contribution,” says Glenda Barahona, a financial aid educator with the Hispanic Scholarship Fund.

For families having to make a bigger personal contribution, tapping into savings is another consideration. If you haven’t started, here’s a tip: putting away $100 a month in a savings account for 18 years can accumulate $30,000 to $35,000. There are also some lesser-known financing options. Through 529 Plans, funds saved for college accumulate tax-free, and you can even prepay future college tuition at today’s rates. A good place to start investigating these plans is through your lending institution. It’s also possible that education tax credits and deductions may be available to you when filing income taxes.

Affordability should definitely be an important factor when choosing a college, but know that a school will go the extra mile for students who find their tuition challenging. “If the school considers your child an asset, it will find the money,” says Ron Díaz, director of student awards at Stanford University, where the average award to low-income students is $30,000.

There is one more option in a very resource-rich but highly competitive area: scholarships. Many organizations now look for students who have done well in school and have financial need. Companies and foundations offer scholarships, for example, for a specific area of study, for those living in a particular area or for the children of veterans. A student who excels in math, plans to study engineering and lives in Des Moines could find scholarships he or she qualifies for in these three areas.

Students should start the search for a scholarship as early as possible to keep pace with deadlines. Families should be very wary of companies that charge fees to help with financial aid. There is absolutely no charge to file the FAFSA, and there are many organizations that will help with the entire process for free.

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