Kids starting college? Here’s how to finance the education of their dreams

With tuition rates at their highest, figuring out how to finance a college education can be scary. But don’t skip out on sending your kids to their dream school because you think the tuition is too high. There are a multitude of grants and scholarships available to help your kid pay for school—and usually private schools with the highest tuitions are better equipped to completely meet the financial needs of all their students with large alumni endowments. This post highlights some key things to know about grants and scholarships.

Grants are free money that does not need to be paid back—so your kid should definitely apply for as many as possible, regardless of your income. The amount of money awarded varies by need, but most students receive at least some aid, and it never hurts to file and see what you’re offered. The federal government is the largest source of grant money, and the first step toward accessing it is to file a FAFSA. It’s easy to apply for a lot of grants this way–students who use the FAFSA to apply for federal financial aid will also automatically be considered for all grants currently offered by their school. This is a FREE, central source for grant money so it’s important to take advantage of it. The federal deadline can be found on the FAFSA website, but each school usually has its own deadline, so be sure to file on time to be considered.

To apply for state grants, which are usually based on need and merit, your kid will most likely need to fill out a separate application along with the FAFSA. Information on most state grants can be found directly on your home state’s government or higher education website. There are a variety of other grants out there based on ethnicity, gender, subject of study, or other individual student qualities. Chances are there’s at least one that matches your kid’s unique profile.

Like grants, scholarships are free money that doesn’t need to be paid back. But unlike grants, scholarships are available from all kinds of organizations and even individuals. Since there are so many unique opportunities out there, be choosy! Your kid will most likely have to write an essay characterizing herself as a match for each particular scholarship. So it’s always best to find organizations (online or through your kid’s high school) that are looking for the qualifications that best describe your kid, instead of taking chances with well-known or general programs (read: ones that everyone else is applying for too).

While it’s nice to get scholarships, they don’t reduce a family’s obligation to pay for college like grants do. Federal guidelines consider outside scholarships a resource for families to use as a means to meet financial need. So non-government scholarships ultimately increase a family’s ability to pay and could decrease a student’s eligibility for grants.

Now it’s time for your student-to-be to go out and find some money. If you have your own tips, please share! In the meantime, stay tuned for a post on student loans.