Get On Track to Handle the Financial Strain

Today, we are going to talk about a family of 5 members, three kids and the parents who are both 46 so retirement will follow close behind the college bills. The problem is very clear to us so let’s learn the lesson on how the family overcame this problem.

The couples have been saving money for college and retirement. But there was no time left to save collage money for their youngest. This problem looks very simple, but indeed those couples are very smart as they look at the future before it comes. And that’s the right think we should follow.

Most collages nowadays are applying a single system for reckoning need and distributing aid. Knowing that system will help families anticipate how much aid they are likely to receive and how they can maximize that aid.

Be sure to do the following steps, it’s your kids’ future:

- Fill out the Free Application for Federal Student Aid form, known as the FAFSA. The application is available from many sources and it may be filled online too.

- It has some questions to the parents about income, savings, tax filings, marital status and residency.

- After a few weeks, there will be a report explaining the expected family contribution.

This form is so important, as it gives the student the right to benefit federal loans and other programs that offer favorable terms.

Keep in mind to:

- Put college savings in the names of the parents.

- Look carefully to the interest rates which depend on the borrower’s credit rating.

- Be sure that your credit rating is in good shape.

Federal Stafford Loans:

1) Subsidized Loans – Students can borrow $3,500 in year one, $4,500 in year two and $5,500 in years three through five. The interest, now fixed at a 6.8% rate, will be paid by the federal government while the student is enrolled in school at least half-time.

2) Unsubsidized Loans – Students are responsible for the interest right away during the in-school periods, eligible deferment periods, and the repayment period.

The couples didn’t choose the previous loan options; they don’t want their kids to take on any debt for college. They used a Parent Loan for Undergraduate Students which has to be repaid through 10 years.

What about scholarships and grants?

Those forms of financial aid are non-repayable awards to students for high academic achievement, skills, talents and/or financial need.

If you do your homework, you and your child may be able to take advantage of some free money. Don’t miss any chance if it’s available for you and your family too.

At the end, how can we improve our thinking?

- Fixing our credit which helps us to get the loans we need.

- Learning about the FAFSA process.

- Saving money. The kids can take loans for college, but no one will give a loan for retirement.

- Being up to date with any change could add to the FAFSA form.

- Investigating scholarships and grants.

- Getting a home-equity line of credit.

Continue reading other real stories >>>

Tagged as: a home-equity line of credit, college bills, college savings, credit rating, distributing aid, FAFSA, FAFSA process, family contribution, family problems, federal loans, federal Stafford loans, Federal Student Aid, financial need, Free Application, kids' future, loans for college, loans for retirement, money for retirement, non-repayable awards, repayment period, saving money, subsidized Loans, the interest rates, unsubsidized loans