Financial Fitness: Shopping around for financial aid to ease college debt
GREEN BAY (WLUK) -- February is Financial Aid Awareness Month. And it comes at a time when financial aid letters start arriving in the mail. With student debt at an all time high of $1.48 trillion, it's more important than ever to the ins and outs of financial aid shopping. Money expert Kevin Klug of Secure Retirement Solutions joined Rachel Manek on Good Day Wisconsin to show us how to do our financial aid homework.
RACHEL MANEK: Why do we need to shop around for financial aid?
KEVIN KLUG: Tuition varies from school to school, but student are leaving with an average student debt total of $37,127. That’s up 6% from 2016. (Source: Student Loan Hero ) Shopping around for financial aid can help cut some of the costs and get families the best deal on a degree.
RACHEL: Where do we start when shopping for financial aid?
KEVIN: There are no coupons you can clip to help you save on college expenses. But I’ve got four ways to start shopping.
Do the Math
*A great place to start is looking at your school’s financial aid letter. These letters typically arrive the spring before your fall semester. (Source: Federal Student Aid )
*Study your letter thoroughly and really figure out what you are being offered.
*Look for the cost of tuition, fees, room and board, meal plans and supplies.
*Add up all those numbers and see what a semester or full year is going to cost.
*Compare these costs and to other universities you are looking at and your budget.
*On my website srsplans.com , I have a link to help compare your options side by side.
Understand What You’re Getting
*Grants and scholarships are different than loans.
*Grants and scholarships are free money you don’t have to pay back.
*Loans need every penny paid back with interest.
*Financial aid award letters sometimes mix together the list of grants, scholarships and loans they are offering you.
*Separate out the grants and scholarships from the loans.
*If you need to use loans, do the math carefully and don’t borrow more than you need.
Put in the Work
*Some schools offer work study as part of their financial aid award.
*Work study guarantees you will be paid at least the federal minimum wage, which is currently $7.25 an hour. (Source: US Department of Labor )
*These jobs are first-come, first-serve and not guaranteed.
*If you aren’t able to get work study job, start looking for jobs in your college town or on campus.
*If you apply and interview during the summer, you can start working right when you get to campus and help pay for school.
Read the Fine Print
*Make sure you are reading all the details in your financial aid award letter.
*See if your financial aid award is guaranteed after freshman year; most aren’t, though.
*You most likely will need to reapply for financial aid each year.
*Some scholarships are only for one semester or one school year, meaning you won’t get that money next year either.
*Read the details of the scholarship and see if you can reapply for the next year.
RACHEL : What else should we consider when financial aid shopping?
KEVIN: There are billions of dollars in scholarships out there. There are all sorts of scholarships out there for everything from being a vegetarian to snowboarding. (Source: Lend Edu ) Also remember that FAFSA, what you filled out to get financial aid, is based on your family's income and assets. If your circumstances have changed since submitting your FAFSA application, let your college or university know. It could affect how much aid your receive.
