Financial Aid Do's And Don'ts
If you're college bound, don't miss out on getting financial aid. Here are do's and don'ts to get you on the right track.
Don't wait. Start filling out your FAFSA - the Free Application for Federal Student Aid - promptly and no later than June 30, 2009 for the 2008-2009 cycle, with corrections due by September 22, 2009. State deadlines are earlier. The FAFSA is the first step in applying for student financial aid from the federal government, including the Academic Competitiveness Grant, Pell Grant, Perkins Loan, Stafford Loan, and work-study programs. Find it online at www.fafsa.ed.gov or pick up an application at your school. The FAFSA is also required by all state and many school student assistance programs.
Juniors: get a head start by visiting www.fafsa4caster.ed.gov for an early estimate of your eligibility for federal financial aid.
Do your homework. Find a wealth of information on the Web. Popular sites include www.collegeboard.com, www.finaid.org, and www.aesSuccess.org.
Visit these sites for tips, advice, and useful links on grants, scholarships and loans, repayment information, test preparation, and more. At www.fastweb.com search for scholarships as well as colleges, jobs, and internships. But be leery of any sites requiring payment for information.
Don't overlook opportunities. Keep your eyes and ears open for local scholarships and grants. They may be for smaller amounts, but there's less competition for them and every dollar counts!
CESA: Not Just For College
A CESA, which stands for Coverdell Education Savings Account, (also referred to as an ESA), is a tax-advantaged way to save for school, usually for technical school or college. But did you know you can also use a CESA for certain qualified elementary and secondary school expenses? For example, according to the IRS, the purchase of computer technology, equipment, or Internet access and related services is a qualified elementary and secondary education expense if it is to be used by the beneficiary during elementary or secondary school years. (Note that this does not include expenses for software designed for sports, games, or hobbies unless the software is predominantly educational in nature.)
Anyone can contribute to your CESA, as long as certain income restrictions are met. There is a limit of $2,000 per year. That means if you saved $500 in your CESA this year, your parent or someone else could contribute $1,500.
For more information, check out Chapter 7 of IRS Publication 970.
Is College In Your Future?
According to a College Board Study entitled Education Pays, people with a bachelor's degree earn more than 60 percent than those with just a high school diploma. Calculated over a lifetime, the gap in earning potential between a high school diploma and an undergraduate degree comes to more than $800,000. But with college costs ever rising, it pays to take these three steps now to ensure you are making a wise investment:
- Talk with your high school counselor. A counselor can point you in the right direction on the Web and help you sort out the huge number of sites offering advice and information. You also can learn about how to use the Free Application for Federal Student Aid site, (www.fafsa.ed.gov), your starting point for access to federal aid.
- Use a Coverdell Education Savings Account to make your savings work harder. A CESA is a tax-advantaged way to save because the earnings accumulate tax-free, and you pay no taxes on withdrawals when the funds are used for qualified education expenses.
- Apply for as many scholarships as you can, even those that are relatively small. According to the Web site, finaid.org, the best places to look for scholarships are at www.fastweb.com, your local library, and the college financial aid office. Be wary of Web sites that require you to pay a fee for scholarship information.
Questions to Ask Before You Start Your Homework
Homework comes with the territory, but it doesn't have to consume all of your free time. Ask these questions to get into study habits that have the biggest impact.
- Are you an auditory, visual, or kinesthetic learner? Individual differences in learning mean it's important to understand how you process information best. Some people learn by hearing the information - auditory learners. Taping a lecture or reading aloud will help them. Others are visual learners and would rather read or see the information. Still others are kinesthetic learners, or accomplish the most through doing, for example by performing role-playing exercises.
- Do you have a time and place to study? Homework needs a home, so set up a time and place in your schedule, without fail.
- Do you take breaks? Give your brain a rest by taking a stretch break at every 30 minutes.
- Can you focus? Make sure any distractions (like a little brother or a loud television) are not interrupting your learning.
Money For College
There's no question college is expensive. And fees for tuition, room and board, books, and materials seem to go in only one direction: Up. Fortunately, there are hundreds of thousands of dollars in scholarships and fellowships that can help you pay for your education. To sort through what is available, start by using the free scholarship search Web sites such as www.fastweb.com. But don't stop there. Even the largest online databases don't include information about all the available awards. For local awards, look for notices posted on your school's guidance office and at the public library. Also, check with the credit union for scholarships that may be available for credit union members. Another useful Web site is www.finaid.org. It offers links to scholarship databases, as well as suggestions for improving your chances at winning scholarships.
Be wary of scholarship scams and never pay for scholarship information. Follow this rule of thumb: If you have to pay money to get money, it's probably a scam. Watch for telltale lines such as, "You can't get this information anywhere else" or "The scholarship is guaranteed or your money back."
Attention Talented Teens! Scholarships to Apply For Now
Did you know that even if you're not a high school senior, there are grants and scholarships available? From aspiring authors to community volunteers, from environmentalists to journalists, a wide range of award programs provide prizes for talented teens of all types. Here's a sampling:
Visit www.finaid.org/scholarships/age13.phtml for a list of the opportunities available to teens and even some for younger kids. Check with your teachers and counselors at school for programs they might be aware of, too. Deadlines for these programs vary, so it's never too early to learn more.
- The Davidson Fellows Scholarship awards $50,000, $25,000 and $10,000 scholarships to extraordinary young people under the age of 18 who have completed a significant piece of work. Categories include mathematics, science, literature, music, technology, philosophy, and "outside the box." Go to www.davidsongifted.org/fellows/ to learn more.
- Kohl's department store awards scholarships and prizes to kids, aged 6 through 18, whose volunteer efforts have made a positive impact on their communities. Visit www.kohlskids.com for details.
- The Courage in Student Journalism Awards (www.splc.org/csjaward.asp) is presented to a student journalist who has shown determination, despite difficulty or resistance, in lawfully exercising his or her First Amendment press rights.
- Action For Nature honors "Young Eco-Heroes," between the ages of 8 and 16, who have done creative environmental projects. Go to www.actionfornature.org/eco-hero/index.html for more information.
Need Help Paying for College?
Did you know that federal financial aid is available and applying for it is easy? You can go online at www.fafsa.ed.gov to get information and a free FAFSA application form for federal student aid. If you don't have Internet access or have additional questions, you can call 1-800-433-3243. You can also obtain an application form from your school guidance counselor or at your local library. Applications are accepted beginning January 1 for the following school year. So don't wait: Get started today.
The ABC's of CESA
You may have heard the saying, “If you think education is expensive, try ignorance.” But by opening a Coverdell Education Savings Account, also called a CESA or ESA, you can cut your costs. CESAs offer a tax-advantaged way to save. Here are the basic ABC's of CESAs:
A is for (almost) anyone. Generally, any individual (including the beneficiary) whose modified adjusted gross income for the year is less than $110,000 ($220,000 for joint returns) can contribute to a CESA.
B is for beneficiary. Up to $2,000 can be contributed annually, but the beneficiary must be under the age of 18 at the time of the contribution.
C is for contributions. Contributions accumulate tax-free and can be used to pay for expenses at any accredited school, including elementary, secondary, and post-secondary institutions. Qualified expenses include, but are not limited to, tuition and fees, books, supplies, and equipment. Special rules apply to computer expenses. For complete details, check out IRS Publication 970, Tax Benefits for Education at www.irs.gov or at the library.
FYI: More Hope for the College Bound
The cost of higher education seems to defy the laws of gravity - going up and never coming down. But as part of the federal economic stimulus package (the American Recovery and Reinvestment Act), signed by President Obama in February 2009, more parents and students will qualify over the next two years for a tax credit to help pay for college expenses. Called the American Opportunity Credit, the new credit modifies the existing Hope Credit for tax years 2009 and 2010, making the Hope Credit available to more families. A broader range of taxpayers, including many with higher incomes and those who owe no tax, are now eligible to claim an annual tax credit of up to $2,500 per student. That is a $700 increase from the previous Hope Credit.
It also expands the list of qualifying expenses. "Qualified tuition and related expenses" now includes expenditures for "course materials," defined as books, supplies and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance. A computer purchase may qualify for the credit if it is needed for enrollment or attendance at the school. The new law also allows the credit to be claimed for four post-secondary education years instead of two. You are not allowed to "double dip," however, by paying for the same expenses with funds from a Coverdell Education Savings Account.
For more information, review IRS Publication 970, Tax Benefits for Education at www.irs.gov or at the library.
Tips For Your First Job Interview
Looking for a job? Does a job interview make you nervous? Let your credit union help by giving you the following tips:
- Be prepared. Bring a pen, notepaper, references, and resume (if you have one). The more information you have prepared in advance, the better impression you will make.
- Be on time. Arrive a few minutes early if possible.
- Be polite. It is very important to have good manners. Shake the interviewer's hand and don't sit until you are invited to.
- Maintain proper eye contact and sit up straight in the chair. Also, don't play with your hair, clothes, etc.
- Have a positive attitude.
- Know your strong points and weak points: Be able to talk about each in a positive fashion.
- Be truthful - if you don't know something don't be afraid to say so. Let them know you are self-motivated and willing to learn.
- Know what days and hours you can work. The more flexible you are the better chances you have of landing the job.
- Ask questions - you are also interviewing the owner/manager of the company just as they are interviewing you.
- If one of your parents brings you to the interview, don't bring them into the interview room with you. Go by yourself.