SAN MATEO, CA--(Marketwire - June 8, 2010) - On average, the cost of higher education in America rises eight percent per year1. The lingering effects of the economic recession coupled with the already-high costs of college make this a daunting fact for those planning how best to save for higher education. To assist those families, consumer money resource Bills.com today shared a number of useful college savings strategies in the face of the looming federal student aid deadline.
"Helping American families afford higher education is one of this country's greatest opportunities, but also one of its greatest challenges," said Ethan Ewing, president of Bills.com. "Unfortunately, recent government changes to the student aid program were not as far reaching as we would have liked, leaving many families to fend for themselves."
Every year, hundreds of millions of dollars of financial aid goes unused even as students and their families struggle to pay rising tuition costs2. Mr. Ewing urged all college students and their families to take advantage of the last opportunity to qualify for millions of federal student aid still available for the 2009-2010 school year by completing the Free Application for Federal Student Aid (FAFSA) before its June 30, 2010 deadline. The form is available online at http://www.fafsa.ed.gov.
For those families exploring ways to cover the rising cost of higher education in coming years, there are many factors and savings strategies to consider. While recent government efforts to reform the federal student loan program are important, they are limited in scope. Most families will see little change in the way federal loan programs are administered, and instead must rely on their own planning to afford rising tuition costs.
Bills.com Recommended College Savings Strategies
The Bills.com Student Loan Savings Center provides basic college savings suggestions as part of the company's larger mission to help individuals and families make sound money decisions. The Center recommends that those beginning to save for college -- or even those nearing college -- revisit tried and true savings strategies. According to Bills.com, students and families preparing for college should consider the following:
- Carefully research all available money resources, including scholarships, grants and loans. Many local organizations offer scholarships in support of prospective students.
- Exhaust all grants and scholarships before applying for college loans.
- Exhaust all federal loan programs before applying for private loans.
- Plan to complete taxes early in order to complete the FAFSA application early. You should also complete the application online to facilitate changes or remedying mistakes.
- When applying for financial aid, understand what dollars are considered eligible as sources of money for tuition. Retirement accounts are not eligible, meaning families should maximize retirement savings to increase their chances at financial aid.
- Under federal guidelines, students are expected to shoulder a larger portion of college tuition than parents, so putting college savings accounts in a student's name could have serious repercussions on eligibility for financial aid.
For more information on student loans please visit the Bills.com Student Loan Savings Center. College bound students or their families can also receive free, personalized answers to their college savings questions using the company's Ask Bill service.
Bills.com Perspective on Healthcare and Education Reconciliation Act
The Healthcare and Education Reconciliation Act was passed in 2010 to change the way in which student loans were administered in America. At its core, the bill removes private lenders from the government student loan process and shifts the burden of funding these loans to the federal government. This is widely expected to mean fewer student loans and more federal grants. Other changes scheduled to take effect in 2014 include capped monthly payments based on disposable income and a shortened forgiveness period for those entering civil service and some low-income occupations.
However, most changes are targeted at lower income families and those entering civil service or related professions upon graduation. This means the majority of college students will see little change in how federal loan programs are administered.
About FAFSA
The Free Application for Federal Student Aid is the form the U.S. Department of Education requires to determine your Expected Family Contribution or how much an individual is expected to contribute to their education. FAFSA deadlines can vary widely because they are set by federal and state agencies, as well as individual school financial aid offices. Applicants should pay particular attention to deadline specifics, as some refer to the date by which an individual FAFSA must be submitted, while others refer to the date by which an individual FAFSA must be fully processed. The 2009-2010 School Year Federal Application for Student Aid expires on June 30, 2010 and will no longer be available.
About Bills.com
Bills.com is the leading resource for free and personalized money help. Founded by a group of financial experts intent on helping consumers save time, money and stress, Bills.com is designed to give consumers confidence in making money decisions. The site offers useful information, powerful tools, and real money experts to give consumers the information they need in the way they want it.
1 According to FinAid "Tuition Inflation," http://www.finaid.org/savings/tuition-inflation.phtml
2 "Millions in Student Aid go Unused," NPR All Things Considered, Tara Siler, March 31, 2010
Contact Information:
Press Contact:
Michael Azzano
Cosmo PR
415/596-1978