HOW DO I PAY FOR COLLEGE? FUNDING SOURCES “When it comes to saving for college, many parents and families don’t know where to start—and when they do, they can be quickly overwhelmed with conflicting or misguiding information.”

A COLLEGE EDUCATION CAN OPEN DOORS TO FUTURE ECONOMIC SUCCESS. STATISTICS SHOW THAT MEDIAN EARNINGS (INCOME) FOR A WORKER WITH A BACHELOR’S DEGREE WERE MORE THAN 60 PERCENT HIGHER THAN MEDIAN EARNINGS FOR A WORKER WITH A HIGH SCHOOL DIPLOMA ALONE.

THE CLASS OF 2015 IS REACHING NEW HEIGHTS, THOUGH PERHAPS NOT THE WAY IT HAD HOPED COLLEGE GRADUATES ARE LEAVING SCHOOL AS THE MOST INDEBTED CLASS EVER, A TITLE THEY’LL HOLD EXCLUSIVELY FOR ALL OF ABOUT 12 MONTHS IF CURRENT TRENDS HOLD. THE CLASS OF 2015 GRADS AVERAGED $35,000 IN TOTAL DEBT. THE BULK OF THEIR DEBT IS IN GOVERNMENT AND STATE LOANS, PRIVATE LOANS, PERSONAL AND FAMILY LOANS, AND CREDIT CARD DEBT. SOURCE: THE WALL STREET JOURNAL, MAY 2015.

Ways to Pay for College Savings (school-year and summer employment) Parents Grandparents Godparents (aunts, uncles) Loans Grants Scholarships – academic, athletic Work Study Private Funding – banks, home equity loans, second mortgage, private lenders (Private loans, like federal student loans, cannot currently be discharged in bankruptcy. Unlike federal student loans, they tend to carry higher interest rates and have few to no loan forgiveness options available to borrowers. If students run into trouble with repaying their private loans (and student loan default rates have recently been on the rise), they can quickly balloon into a lifelong financial burden.federal student loans

Loans - A Federal Perkins Loan is a low-interest rate (5%) loan for both undergraduate and graduate students who demonstrate exceptional financial need. The college is the lender; the loan is made with government funds, with a share contributed by the college. The loan must be repaid to the college. “Approximately 60 percent of federal financial aid comes in the form of student loans, and all loans represent debt that a family must incur.”

Loan Forgiveness or Cancellation (check with your lender) Nursing Educational Loan Repayment: Award recipients are obligated to one year of service for each year of the award; the goal of the program is to ensure a stable and adequate supply of nurses to meet the health care needs of Vermonters. Other similar programs exist in the healthcare field. Worth checking out! Peace Corps: Volunteers may apply for deferment of student loans during their period of service, as well as partial cancellation of Perkins Loans. Teach for America - AmeriCorps benefits may be available, including federal loan forbearance, interest accrual payments, and education awards.

Grants - Federal Pell Grants are awarded to eligible undergraduate students with exceptional financial need who have not earned a bachelor’s or professional degree. Pell Grants do not have to be repaid.

VT The Vermont Higher Education Investment Plan (VHEIP) can help families start investing in their child's college education. Keys are to start early, contribute consistently and regularly. Investing in education is a smart move and the tax advantages built into VHEIP can make it an important part of your overall college funding strategy. Anyone Can Open an Account - Parents, grandparents, relatives and friends who are U.S. citizens and at least 18 years of age may open a VHEIP account and contribute to a beneficiary. Funds Can be Used at Eligible Schools Nationwide – 2-yr, 4-yr, tech schools, etc. Funds Can be Used for a Variety of Qualified Expenses - Funds can be used for tuition, mandatory fees, books, supplies, and equipment required for enrollment or attendance; certain room and board costs, certain expenses for "special needs" students.

Scholarships – Forms of “gift aid," meaning there is no obligation (under most circumstances) to repay the funds. Scholarships are typically based on factors unique to each scholarship. These may include residency, degree program or major, academic achievement, extracurricular activities, athletics, and in some cases, financial need. Scholarships, unlike grants, are competitive, meaning that eligible applicants compete for a limited number of awards. Work Study - The work-study program provides part-time employment to undergraduates and graduates to help with college expenses. Your earnings will depend on where you work and the type of work that you perform. Your earnings are considered taxable income; and in some programs, the money earned will be used to determine your financial need when filing the FAFSA.* (Free Application for Federal Student Aid)Free Application for Federal Student Aid

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