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Alternatives for Students Scrambling to Fill Hole of Missing Grant Financial Aid
The Savvy Consumer

By Teresa McUsic

Many Texas college students are receiving their financial aid letters from state schools right now with a big hole in the middle.

The University of Texas, Texas A&M University and others have decided to not yet award some federal and state financial aid grants typically given out this time of year for the fall semester because of uncertainty in Congress and the state legislature as to whether those programs will be funded.

ďThis is the first time Iíve ever heard of omitting the numbers completely,Ē said Mark Kantrowitz, publisher of Fastweb.com and FinAid.org and author of Secrets to Winning a Scholarship he said. ďUsually there is an asterisk next to the number with a note saying this amount is subject to change.Ē

Nationally, two-thirds of undergraduates received financial aid each year, with awards averaging $12,740, according to student lender Sallie Mae.

Here are some strategies to make the decisions necessary under the current set of facts:

1. Comparing offers. Kantrowitz says that if you receive an offer from a school with Pell grant numbers, you can use that same figure in your total cost calculations for schools that do not include the grant information.

For those students who applied to just one school and donít have a competing offer, a rule of thumb in figuring a Pell grant is to subtract your expected family contribution (EFC) from the maximum Pell grant of $5,550, Kantrowitz said. So if youíre EFC is 1882, your Pell grant would be roughly $3,600.

Kantrowitz has developed a free six-page quick reference guide for students and parents to compare college offers on his FinAid site at www.finaid.org/fafsa/FinancialAidAwardLetters.pdf.

2. Monthly payment plans. Some schools, like UT and A&M, allow a tuition and room and board installment payment plan spread out over four or five months each semester for a small fee (UTís is $15, A&Mís is $17). Costs broken down like this might be easier for many families when they donít have to pay everything upfront. Ask your school if they offer this and what charges may be affiliated.

3. Loan options. Those qualifying for Stafford loans should consider them seriously. This is the lowest interest rate on these loans to students in years at 3.4 percent this fall for subsidized loans and 6.8 percent for unsubsidized loans. These loans donít have to be paid back until after the student is finished with school. PLUS federal student loans for parents financing their kidís education is now at 7.9 percent.

If necessary, shop around for private loans. Sallie Maeís offers a student loan program with an annual percentage rate of 2.87 percent to 10.33 percent and three in-school repayment options: an interest-only monthly plan, a $25-per-month plan or its new plan with no minimum monthly payment required.

4. Community college. Tarrant County Community College has set its rates at $50 an hour starting this summer for residents of the county. So tuition for a typical 15-hour schedule would cost just $750 plus a $10 ID fee (parking permit is free), quite a bargain over public and private universities where tuition alone is generally $5,000 a semester or higher. Staying at home and getting your first two years towards a degree may make a lot of financial sense in these uncertain times of state and federal financial aid.

5. Search for scholarships. Sallie Mae reports that there are still 25,000 scholarships worth $77 million with deadlines between now and the end of the summer. Blankenship advises to focus on local scholarships for better chances at snagging the money. Free college scholarship search sites include www.fastweb.org, www.scholarships.com and www.collegeboard.com.