Preparing Your Child For College
A Resource Book for Parents

A NOTE TO PARENTS

It's never too early to think about college -- about the benefits of a college education and about ways to put college within reach academically and financially. Throughout their school years, students make academic and other decisions that affect whether they will be eligible to enter college. You -- working with others -- can help your child make these decisions wisely.

This resource book is designed to help you with that process. It will help you work with your child and with your child's teachers and guidance counselors, to ensure that he or she has the option of going to college. It will help your child to prepare academically for the rigors of college, and it will help you to plan financially for the costs of a college education. A good academic record on your child's part and sound financial planning on your part will help ensure a menu of opportunities when the time comes to decide about college. Although this book was written primarily as a long-term planning guide for parents, guidance counselors and teachers will also find it useful and informative.

This book will help you to

• -- Set high expectations for your child's future;
• -- Know what college options are available;
• -- Plan your finances with college in mind; and
• -- Know what financial assistance your child may be eligible to receive.

To ensure that today's students will be able to live, work, and compete in the 21st century, the U.S. Department of Education and the Nation's governors set a direction for the Nation by establishing six national education goals. In brief, the goals state that by the year 2000

• All children in America will start school ready to learn;
• The high school graduation rate will improve to at least 90 percent;
• All children will be competent in at least English, mathematics, science, history, and geography;
• American students will be first in the world in science and mathematics;
• Adult Americans will be literate and have the skills necessary to compete in a world economy;
• And every school in America will be free of drugs and violence.

As we turn from a "Nation at Risk" to a "Nation on the Move" we must assure that our children and youth are prepared to meet the challenge of the world economy, the obligation of civic responsibility, and the responsibility of attaining the national education goals.

Attaining the national education goals depends greatly on the efforts of the entire community, but especially you, the parents of our children. In helping your child succeed in high school and aim for college, you're also helping our Nation produce informed citizens and a competitive work force for the next decade and beyond.

Richard W. Riley
U.S. Secretary of Education

PREPARING YOUR CHILD FOR COLLEGE

• I. General Questions About College
  • Why attend college?
  • What types of colleges exist?
  • What kinds of jobs are available to college graduates?
• II. Preparing for College
  • What can my child do to prepare academically for college?
  • What can my child do outside the classroom to prepare for college?
• III. Choosing a College
  • How can my child go about choosing a college?
• IV. Financing a College Education
  • How much does a college education cost?
  • How can I afford to send my child to college?
  • What are the most common sources of financial aid?
  • Is my child eligible for financial aid? If so, how much ?
  • Are there other ways to keep the cost of college down?
• V. Long-Range Planning
  • How do I set up a long-range plan?
• VI. Important Terms
  • What terms do I need to understand?
• VII. Other Sources of Information
  • Where can I get more information on the topics discussed in this handbook?
• Exercises and Checklists for You and Your Child
  • Help Your Child Think About a Career
  • Course Planner for Parent and Student
  • College Inquiries
  • College Preparation Checklist for Students
  • Financial Preparation Checklist for Parents
• Charts
  • Chart 1: Examples of Jobs Requiring College Preparation
  • Chart 2: High School Courses Recommended for a Four-Year College
  • Chart 3: Questions To Ask Guidance Counselors
  • Chart 4: Distribution of College Students by the Amount of Tuition and Fees Charged
  • Chart 5: Typical College
  • Chart 6: Average Tuition and Fees By Type of College, School Year 1991-1992
  • Chart 7: Amount You Would Need To Save To Have $10,000 Available When Your Child Begins College
  • Chart 8: Examples of Savings Instruments and Investments
  • Chart 9: How Much Need-Based Financial Aid Can My Child Get?
  • Chart 10: Military Postsecondary Education Opportunities

I. General Questions About College

Why attend college?

A college degree can provide your child with many opportunities in life. A college education can mean:

Greater Knowledge

A college education will increase your child's ability to understand developments in science and in society, to think abstractly and critically, to express thoughts clearly in speech and in writing, and to make wise decisions. These skills are useful both on and off the job.

Greater Potential

A college education can help increase your child's understanding of the community, the Nation, and the world--as he or she explores interests, discovers new areas of knowledge, considers lifelong goals, and becomes a responsible citizen.

More Job Opportunities

The world is changing rapidly. Many jobs rely on new technology and already require more brain power than muscle power. In your child's working life, more and more jobs will require education beyond high school. With a college education, your child will have more jobs from which to choose.

More Money

A person who attends college generally earns more than a person who does not.

For example, in 1989, a person with a college degree from a four-year college earned approximately $10,000 more in that year than a person who did not go to college. With a college education, your child can earn higher pay.

Some of these benefits of college may not be obvious to your child. Even though he or she has to make the final decision to attend college, you can help in the decision-making process by learning about all aspects of college yourself and sharing what you learn with your child.

What types of colleges exist?

Throughout this document, the term "college" is used to refer to all collegiate institutions--both colleges and universities.

More than half of all recent high school graduates in the United States have had some type of postsecondary education. In many other countries, a smaller percentage of students go on for more schooling after high school. One reason so many U.S. students seek postsecondary education is that American students have a wide choice of colleges to consider. For this reason, your child is likely to find a college well-suited to his or her needs.

There are two basic types of colleges that offer academic programs:

• Two-Year Colleges

  These schools offer two-year programs leading to a certificate, an associate of arts (A.A.) degree, an associate of science (A.S.) degree, or an associate of applied science (A.A.S.) degree.

• Four-Year Colleges and Universities

  These schools usually offer a bachelor of arts (B.A.) or bachelor of science (B.S.) degree. Some also offer graduate and professional degrees.

Two-Year Colleges

For students who want a practical education aimed at a specific career in such areas as bookkeeping, dental hygiene, etc., a two-year program is probably the answer. In many cases, two-year degrees can be transferred to four-year schools and credited toward a B.A. or B.S. degree. Two-year programs vary from school to school, but, in general, are offered by:

• Junior Colleges: These are generally private institutions, some of which are residential and attended by students who may come from other parts of the country; and
• Community Colleges: These are public institutions, mostly serving people from nearby communities. Public institutions are supported by state and local revenues.

Many junior and community colleges offer technical/vocational training, as well as academic courses. Many offer such programs in cooperation with local businesses, industry, public service agencies, or other organizations.

Two-year colleges often operate under an "open admissions" policy, which can vary from school to school. At some institutions, "open admissions" means that anyone who has a high school diploma or GED certificate can enroll. At other schools, anyone over 18 years of age can enroll or, in some cases, anyone deemed able to benefit from the programs at the schools can enroll.

Application requirements at some two-year colleges may include a high school transcript--a list of all the courses your child took and grades earned in four years of high school--and college entrance examination scores as well. Some schools have programs that allow "open admissions," while other programs in the same school--particularly in scientific or technical subjects--may have further admission requirements. Since requirements vary widely, it is important to check into schools and programs individually.

Four-Year Colleges and Universities

Students who wish to pursue a general academic program usually choose a four-year college or university. Such a program lays the foundation for more advanced studies and professional work. Four-year colleges and universities offer bachelor's degrees (the B.A. and B.S.)in most areas in the arts and sciences, such as English literature, foreign languages, history, economics, political science, biology, zoology, chemistry, and in many other fields.

Here are the main differences between four-year colleges and universities:

• Four-Year Colleges: These are postsecondary schools that provide four-year educational programs in the arts and sciences. These colleges confer bachelor"s degrees.
• Universities: These are postsecondary schools that include a college of arts and/or sciences, one or more programs of graduate studies, and one or more professional schools. Universities confer bachelor's degrees and graduate and professional degrees.

When a student earns a bachelor's degree it means that he or she has passed examinations in a broad range of courses and has studied one or two subject areas in greater depth. (These one or two subject areas are called a student's "major" area(s) of study or area(s) of "concentration.") A bachelor's degree is usually required before a student can begin studying for a graduate degree. A graduate degree is usually earned through two or more years of advanced studies beyond four years of college. This might be a master's or a doctoral degree in a particular field or a specialized degree required in certain professions such as law, social work, architecture, or medicine.

What kinds of jobs are available to college graduates?

Certificates and degrees earned by graduates of two- and four-year colleges or universities usually lead to different kinds of professional opportunities. Many professions require graduate degrees beyond the traditional four-year degree, such as a medical degree or a law degree. For example:

• A course of study in bookkeeping at a community college generally prepares a student for a Job as a bookkeeper.
• A four-year degree in economics may prepare a student for any one of several Jobs in a bank or a business.
• A four-year degree in English may serve as background for getting teacher certification in the subject or for being an editor with a magazine.

In Chart 1 below there is a partial listing of different occupations and the educational background generally required for each. Some people who go on to acquire Jobs in the four-year-college column obtain a graduate degree or some graduate education, but many of these Jobs can be filled by people who do not have more than a four-year college education. For more information on the educational requirements of specific jobs, contact a guidance counselor or check the Occupational Outlook Handbook in your library. (See the last section of this handbook for information on this book arid other publications that discuss jobs.)

II. Preparing for College

What can my child do to prepare academically for college?

To prepare for college, there is no substitute for your child getting a solid academic education. This means your child should take challenging courses in academic subjects and maintain good grades in high school. Your child's transcript will be an important part of his or her college application.

A college education builds on the knowledge and skills acquired in earlier years. It is best for your child to start planning a high school course schedule early, in the seventh or eighth grade. Students who don't think ahead may have difficulty completing all the required or recommended courses that will help them qualify for college.

Most selective colleges (those with the highest admissions requirements) prefer to admit students who have taken courses in certain subject areas. For example, many colleges prefer that high school students take algebra, geometry, or some other type of specialized math, rather than general math. Some colleges prefer three or four years of a foreign language. Your child's guidance counselor can help your child determine the high school courses required or preferred by different types of colleges. If your child is interested in specific colleges, he or she can contact those schools and ask about their admissions requirements.

Your child should take courses in at least these core areas:

• -- English
• -- mathematics
• -- science
• -- history and geography

A foreign language and computer science are also highly recommended.

Chart 2 lists the high school courses that many higher education associations and guidance counselors recommend for a college-bound student. These courses are especially recommended to students who want to attend a four-year college. Even if your child is interested in attending a two-year college, he or she should take most of these courses since they provide the preparation necessary for all kinds of postsecondary education.

If your child is interested in pursuing a vocational program in a two-year college, he or she may want to supplement or substitute some of the courses listed in the chart with some vocational or technical courses in his or her field of interest. Your child should take at least the suggested courses in the core areas of English, math, science, history, and geography.

Traditional English courses such as American and English literature will help students improve their writing skills, reading comprehension, and vocabulary. History and geography will help your child better understand our society as well as societies around the world.

Mathematical and scientific concepts and skills learned in math classes are used in many disciplines outside of these courses. A recent study showed that students who take algebra and geometry in high school are much more likely to go on to college than students who do not. Algebra and geometry are also essential preparation for the college entrance examinations--the SAT (Scholastic Aptitude Test) or the ACT Assessment.

These tests measure a student's aptitude in mathematical and verbal comprehension and problem solving. Students applying to colleges in the East and West usually take the SAT exam. Students applying to schools in the South and Midwest often take the ACT. (However, students should check the admission requirements at each school to which they are applying.) Usually, the tests are offered in the Junior and senior years of high school and can be taken more than once if a student wishes to try to improve his or her score. Students can get books at libraries or bookstores to help them to prepare for all of the tests. Some of these books are listed at the back of this resource book. In addition, some private organizations and companies offer courses that help students prepare for these exams.

Many schools offer the Preliminary Scholastic Aptitude Test/National Merit Scholarship Qualifying Test (PSAT/NMSQT) to their students. This is a practice test that helps students prepare for the Scholastic Aptitude Test (SAT). The PSAT is usually administered to tenth or eleventh grade students. A student who does very well on this test and who meets many other academic performance criteria may qualify for the National Merit Scholarship Program. You and your child can find out more about the PSAT/NMSQT and the National Merit Scholarship Program by talking to your child's guidance counselor or by calling or writing to the number or address provided in the back of this handbook.

Some colleges also require that an applicant take one or more Achievement Tests in major areas of study. It is a good idea for a student to consult a guidance counselor about this early in high school; often the best time to take an Achievement Test is right after the student has taken a course in that subject. For example, many students take the Biology Achievement Test right after they have completed a course in biology. This could mean that your child would take his or her first Achievement Test as a freshman or sophomore in high school.

At the back of this handbook, in the section that lists places where you can get additional information, you will find the address and phone number where you can write or call for more information about the SAT and the Achievement Tests. You will also find the address and phone number for the organization that administers the ACT.

Knowing what will be required for college is important; by taking the right courses and examinations from the beginning of high school, your child may avoid admission problems later on. In addition, students who do not prepare well enough academically in high school, if admitted to college, may be required to take remedial courses. Most colleges do not offer credit for these courses, and students may have to pay for these extra courses and spend extra time in college to earn their degrees. Chart 3 lists some questions that you or your child may want to ask your child's guidance counselor.

What can my child do outside the classroom to prepare for college?

Interpersonal and leadership skills, interests and goals are all important for college preparation. independent reading and study, extracurricular activities, and work experience will all help your child develop his or her skills, interests, and goals.

Independent Reading and Study

Independent reading and study will help your child to prepare academically for college. This is a good way to develop interests, expand knowledge, and improve vocabulary and reading comprehension skills needed for college and the SAT or ACT. Encourage your child to read all kinds of books for fun--fiction and non-fiction. The school library and the local public library are good sources of books, magazines, and newspapers.

Extracurricular Activities

Many school, community, and religious organizations enable high school students to explore their interests and talents by providing activities outside the classroom. Colleges are often interested in a student's extracurricular activities such as school clubs, the student newspaper, athletics, musical activities, arts, drama, and volunteer work, especially if a student has excelled in one or more of these areas.

Work Experience

Work experience--paid or volunteer--can teach students discipline, responsibility, reliability, teamwork, and other skills. Some students tutor elementary school children or fellow students in a subject they have mastered themselves. Others help the disadvantaged or volunteer in hospitals. Many colleges are interested in knowing about this type of experience.

A summer job is a good way to gain experience and earn money for college as well. If your child works during the school year, he or she should not work so many hours that the job interferes with school work.

Creating a Good Place To Study

Your child needs a quiet and comfortable place to study. Here are a few things that you can do:

• (1) Help him or her find a quiet place with some privacy.
• (2) Set up a desk or large table with good light and place reference books such as a dictionary on the desk or nearby.
• (3) Make sure your child studies there on a regular basis.

III. Choosing a College

How can my child go about choosing a college?

Colleges are located in big cities, suburbs, and small towns throughout the country. Some enroll tens of thousands of students; others enroll only a few hundred. Some are public; others are private. Some private institutions are affiliated with religious institutions; others are not. Some schools enroll only women, others only men.

The type of institution best suited to your child depends on his or her individual needs and talents. Your child can begin focusing on the choice of a college by considering the following questions:

• -- Why do I want to go to college?
• -- What do I hope to achieve in college?
• -- Do I have some idea of what I want to study or for which job I want to prepare?
• -- Do I want to live at home or go away to school?
• -- Do I prefer an urban or suburban environment?
• -- Would I be happier in a small college or at a large university?

In order to choose a college, you and your child should ask the following questions about the nature and qualify of the schools in which your child has an interest.

1. The Nature of the Education Offered
   • What is the philosophy of the particular college and what kinds of educational programs does this college offer?

     Ask about the college's specialties, which types of classes the school offers, and in which fields students can earn a degree or certificate. How many students study in each area, and what do they do when they graduate?

   • How long does it take to earn a certificate or degree at this college?

     Students should know how much time it takes to complete a program before they enroll in it. Programs can last anywhere from a few months to several years. Also ask whether the time involved reflects full-time or part-time attendance.

   • What do students do when they graduate from this school? Do they get jobs in the areas that they were trained for? Do they pursue further education?

     Job placement rates are particularly important for vocational programs. If a very low percentage of students are employed in their area of training a year after completing the program, there may be a problem. It can also be useful to ask about beginning salaries of program graduates and the institution's career advising and placement services for its students.

     Students who enroll in two-year colleges plans to transfer to four-year colleges should inquire about the possibility of doing so and about the number of graduates who transfer each year. Students applying to four-year colleges may want to know how many graduates go on to graduate or professional education.

2. The Quality of the College
   • How many students who start at this school earn a certificate or degree? How many drop out?

     A high drop-out rate may suggest that students are dissatisfied with the education an institution provides. Be particularly careful about having your child enroll in a school that graduates a very low percentage of its students. Also ask about tuition refund policies for students who drop out in the first weeks of an educational program.

   • What is the default rate at this college? Do students repay their loans?

     The default rate is the percentage of students who took out student loans to help pay their expenses but did not repay them properly. A high default rate may suggest that students who borrowed never completed their educational program, or that they were unable to find jobs and repay the loans when they graduated. Colleges with consistently high default rates may be barred from student loan programs, and students attending these institutions may thus be ineligible for Federal loans.

   • Have other students who have gone to this college liked it? What has their experience been?

     Colleges should be able to refer you to current students or recent graduates of their programs. These individuals can give you their opinion about classes, facilities, the faculty (teachers), and the skills they have learned.

   • What kinds of facilities does this college have? Are they adequate for my child's needs?

     You and your child should consider the condition of classrooms, libraries, and dormitories when choosing a college. The types of facilities appropriate for a college depend on the type of education provided. For example, a college offering classes in the sciences should have modern laboratories, and an institution that offers computer education classes should have adequate computer facilities.

3. Admissions Requirements and Financial Aid
   • What admissions requirements does this college have?

     Each institution can require students to take certain high school classes and submit certain items with their applications. Make sure you know what is required by the schools that interest your child.

   • Is this college accredited by an agency recognized by the Secretary of Education and eligible to participate in Federal student aid programs?

     Federal financial aid is available only to students attending eligible institutions. Students attending other institutions cannot receive Federal financial aid. If you are interested in having your child apply for Federal financial aid, be wary of unaccredited institutions and those with high default rates. You can call the Federal Student Financial Aid Information Center toll-free to find out if a particular college is an eligible institution. The number is 1-800-4FED-AID.

IV. Financing a College Education

How much does a college education cost?

Many people overestimate the cost of college or believe that all schools are expensive. For example, a recent Gallup survey indicated that 13- to 21-year-olds overestimated the average cost of public two- and four-year colleges by more than three times the actual figure. The same group estimated that the costs of private four-year colleges were one-third higher than they actually were.

Although some colleges are expensive, costs vary from institution to institution. In addition, the availability of financial aid--money available from various sources to help students pay for college--can make even an expensive college affordable for a qualified student.

College Costs

The basic costs of college are tuition, fees, and other expenses:

• Tuition

  Tuition is the amount of money that colleges charge for instruction and for the use of some facilities, such as libraries. Tuition can range from a few hundred dollars per year to more than $18,000. However, there are a few institutions that don't charge any tuition at all. As shown in Chart 4, most students attend colleges that charge less than $3,000 per year for tuition. This occurs because over three-quarters of students attend public institutions whose tuitions are much lower than those of private institutions.

• Fees

  Fees are charges (usually small) that cover costs generally not associated with the student's course load, such as costs of some athletic activities, student activities, clubs, and special events.

• Other Expenses

  Besides tuition and fees, students at most colleges and universities pay for room, board, books, supplies, transportation, and other miscellaneous costs. "Room and board" refers to the cost of housing and food. Typical college costs are listed in Chart 5 below.

Chart 6 below shows the average tuition and fees faced by students at four different kinds of colleges in school year 1991-92.

Future College Costs

By the time your child is ready to attend college, the tuition, fees, and costs of room, board, and other expenses will be larger than the amounts discussed in this handbook. Because there are many factors that affect the costs of a college education, it is impossible to know exactly how much colleges will charge when your child is ready to enroll. Be cautious when people tell you a particular amount; no one can be sure how much costs will change over time. In addition, as college costs increase, the amount of money you earn, and thus the amount you will have available to pay for college, will also rise.

How can I afford to send my child to college?

Saving money in advance and obtaining financial aid are common ways for parents to make their child's education affordable. Other ways of making college affordable, such as attending college part time, will be discussed later in this handbook. (See the section beginning on page 32.)

Saving Money

Saving money is the primary way to prepare for the costs of college. Setting aside a certain amount every month or each payday will help build up a fund for college. If you and your child begin saving early, the amount you have to set aside each month will be smaller.

In order to set up a savings schedule, you'll need to think about where your child might attend college, how much that type of college might cost, and how much you can afford to save. Keep in mind that colleges of the same type have a range of costs and your child may be able to attend one that is less expensive. You can also pay part of the costs from your earnings while your child is attending school. In addition, your child may also be able to meet some of the costs of college by working during the school year or during the summer. Finally, some Federal, State, or other student financial aid may be available, including loans to you and to your child.

You will also want to think about what kind of savings instrument to use or what kind of investment to make. By putting your money in some kind of savings instrument or investment, you can set aside small amounts of money regularly and the money will earn interest or dividends. Interest refers to the amount that your money earns when it is kept in a savings instrument. Dividends are payments of part of a company's earnings to people who hold stock in the company.

A savings instrument has an "interest rate" associated with it; this refers to the rate at which the money in the instrument increases over a certain period of time. Principal refers to the face value or the amount of money you place in the savings instrument on which the interest is earned.

Chart 7 shows how much you would need to save each month in order to have $10,000 available when your child begins college. As the chart demonstrates, the amount varies depending on the interest rate you obtain and the number of years that you save. The higher the interest rate and the earlier you begin to save, the less you need to set aside each month.

For example, if you start saving when your child is born, you will have 18 years to save. As shown on the chart, each month you will only have to deposit $32 in an account earning 4 percent interest in order to save $10,099 by the time your child is 18. However, if you use the same savings instrument but do not start to save until your child is 16, you will have to save $401 each month. In addition, if you use the instrument with the higher interest rate--8 percent--you will only have to put away $21 each month starting when your child is born.

Remember, by starting to save early and by using instruments with higher interest rates, you can put aside smaller amounts. If you wait until later to start saving, you may not be able to afford to put away the larger amounts of money needed to meet your savings goals.

When deciding which type of savings instrument or Investment is right for you and your family, you should consider four features:

• -- Risk: The danger that the money you set aside could be worth less in the future.
• -- Return: The amount of money you earn on the savings instrument or investment through interest or dividends.
• -- Liquidity: How quickly you can gain access to the money in the instrument or investment.
• -- Time Frame: The number of years you will need to save or invest.

When you select one or more savings instruments or investments, you should balance these factors by minimizing the risk while maximizing the return on your money. You will also want to be sure that you will be able to access the money at the time you need to pay for your child's education.

If you start early enough, you may feel confident about making some long-term investments. Some investments are riskier than others but can help you earn more money over time. Chart 8 lists some of the major kinds of savings instruments and investments that you may want to use. You can get more information on these and other savings instruments at local banks and at your neighborhood library.

Don't forget that you won't necessarily have to save for the entire cost of college. The following section tells about student financial aid for which you and your child might qualify and other ways to keep college costs down.

Financial Aid

Financial aid can help many families meet college costs. Every year millions of students apply for and receive financial aid. In fact, almost one-half of all students who go on for more education after high school receive financial aid of some kind. In school year 1990-91, postsecondary students received about $28 billion in financial aid.

There are three main types of financial assistance available to qualified students at the college level:

• -- Grants and Scholarships;
• -- Loans; and
• -- Work-Study.

Grants and Scholarships

Grants and scholarships provide aid that does not have to be repaid. However, some require that recipients maintain certain grade levels or take certain courses.

Loans

Loans are another type of financial aid and are available to both students and parents. Like a car loan or a mortgage for a house, an education loan must eventually be repaid. Often, payments do not begin until the student finishes school, and the interest rate on education loans is commonly lower than for other types of loans. For students with no established credit record, it is usually easier to get student loans than other kinds of loans.

There are many different kinds of education loans. Before taking out any loan, be sure to ask the following kinds of questions:

• -- What are the exact provisions of the loan?
• -- What is the interest rate?
• -- Exactly how much has to be paid in interest?
• -- What will the monthly payments be?
• -- When will the monthly payments begin?
• -- How long will the monthly payments lost?
• -- What happens if you miss one of the monthly payments?
• -- Is there a grace period for paying bock the loan?

In all cases, a loan taken to pay for a college education must be repaid, whether or not a student finishes school or gets a job after graduation. Failure to repay a student loan can ruin a person's credit rating and make finances much more difficult in the future. This is an important reason to consider a college's graduation and job placement rates when you help your child choose a school.

Work-Study Programs

Many students work during the summer and/ or part time during the school year to help pay for college. Although many obtain jobs on their own, many colleges also offer work-study programs to their students. A work-study job is often part of a student's financial aid package. The jobs are usually on campus and the money earned is used to pay for tuition or other college charges.

The types of financial aid discussed above can be merit-based, need-based, or a combination of merit-based and need-based.

• Merit-based Financial Aid

  Merit-based assistance, usually in the form of scholarships or grants, is given to students who meet requirements not related to financial needs. For example, a merit scholarship may be given to a student who has done well in high school or one who displays artistic or athletic talent. Most merit-based aid is awarded on the basis of academic performance or potential.

• Need-based Financial Aid

  "Need-based" means that the amount of aid a student can receive depends on the cost of the college and on his or her family's ability to pay these costs. Most financial aid is need-based and is available to qualified students.

What are the most common sources of financial aid?

Student financial aid is available from a number of sources, including the Federal Government, State governments, colleges and universities, and other organizations. Students can receive aid from more than one source.

• Federal Financial Assistance

  The Federal Government supplies the largest amount of all student aid, about 75 percent or $20 billion annually. The largest and most popular Federal student aid programs are:

  • -- Federal Pell Grants

    These are need-based grants that will be given to over 4 million students for school year 1992-93. In school year 1992-93, the maximum Pell Grant will be $2,400.

  • -- Federal Stafford Loans

    Starting in October 1992 there will be two Stafford loan programs-one need-based program and another non-need-based. In 1992 approximately 4 million students will receive Stafford Loans.

    Under the need-based program, the Federal Government pays interest on the loan while the student is in school and the student starts paying back the loan and the interest after graduation.

    Under the non-need-based loan program, the interest accrues while the student is in school. After graduation the student must pay back the loan and the interest on the loan, including the interest that accrued while the student was in school.

    Under the Stafford loan programs, the combined loan limits are $2625 for the first year, $3500 for the second year, $5500 for the third or more years. An undergraduate cannot borrow more than a total of $23,000.

    In addition to Federal Stafford Loans for students, two other Federal loan programs are available through which students or their parents can borrow funds to attend school.

  • -- Federal Campus-Based Programs

    The Federal Government also provides money to colleges to give to needy students. There are three Campus-Based programs--a grant program (Supplemental Educational Opportunity Grants or SEOGs), a loan program (Perkins Loans), and the College Work-Study Program.

    Students can get aid from more than one Federal program. For the most up-to-date information about student aid supplied by the Federal Government, call the Federal Student Financial Aid Information Center toll-free at the U.S. Department of Education at 1-800-4FED-AID. You can also obtain a guide to Federal financial aid for students, called The Student Guide, which provides an extensive and updated discussion of all Federal student aid programs. You can obtain the Guide by writing to the following address:

    Federal Student Aid Information Center
    P.O. Box 84
    Washington, D.C. 20044

    Call: 1-800-4FED-AID

• State Financial Assistance

  States generally give portions of State budgets to public colleges and universities. This support lowers tuition for all students attending these schools. Some States also offer financial assistance directly to individual students, which can be need-based or merit-based. To find out about State aid where you live, call or write your State's higher education agency. The phone numbers and addresses of all of these agencies are listed in the last section of this handbook.

• College/University Assistance

  Colleges themselves provide aid to many of their students. Most of this "institutional aid" is in the form of scholarships or grants. Some is need-based and some is merit-based.

  When your child wants financial aid information about specific schools, he or she should contact the financial aid offices of these schools and request information.

• Other Types of Assistance

  Other organizations, such as corporations, labor unions, professional associations, religious organizations, and credit unions, sometimes award financial aid. You can find out about the availability of such scholarships by contacting someone from the specific organization or by directly contacting its main headquarters.

  In addition, some organizations, particularly foundations, offer scholarships to minorities, women, and disabled students. To learn more about such scholarships, go to the nearest public library with a good reference section and look for directories that list such scholarships. (The names of a few books that list scholarships appear in the last section of this handbook.) College admissions offices and high school guidance counselors should also be able to provide more information about scholarships.

Help in Getting More Information

The guidance counselors at your child's high school should be able to provide information on when and how to apply for Federal, State, and other types of aid. If they cannot give you this information, try a local college. Even if your child doesn't plan to attend that particular institution, financial aid officers there should have information on Federal financial aid. Many colleges can also tell you about State aid and their own institutional aid.

Is my child eligible for financial aid? If so, how much?

To qualify for Federal aid, you or your child must submit a financial aid application. Applications for financial aid request information about your family's income, savings, and assets, as well as information on the number of children in the family who are in college. You can get a copy of the Federal financial aid form by calling the toll-free number that was mentioned earlier: 1-800-4FED-AID.

To apply for other aid in addition to Federal aid, you may need additional forms. High school guidance counselors can tell you more about applying for financial aid, including where to get forms you might need for State aid.

From information you report on the financial aid forms, your expected family contribution (EFC) is calculated. The EFC is the amount of money a student and his or her family are expected to contribute to the costs of attending college. Using the EFC and other information that you provide, each college to which you apply will determine your financial need. Financial need equals the cost of education minus the EFC and represents the maximum amount of need-based aid the student can receive. In addition, students can borrow money to cover the EFC.

Because financial aid determinations consider both financial need and education costs, you should not rule out a school because you think it costs too much. In fact, with financial aid it may cost no more to attend an expensive institution than a cheaper one. Chart 9 below summarizes the simple calculation that is performed to determine financial need.

Are there other ways to keep the cost of college down?

1. Enroll in a Two-Year College; Then Transfer to a Four-Year College

   Local community colleges are usually the least expensive. In addition to charging low tuition, they are located in the area in which the student lives, which makes it possible to save by living at home and commuting to campus.

   After completing an associate's degree or certificate in a two-year college, students often can transfer to a four-year college and work toward a bachelor's degree.

   If your child chooses this route, he or she needs to take courses in the two-year college that will count toward a bachelor's degree. Certain community college courses may not be transferable to a four-year institution. Community college admissions officers can explain transfer terms and opportunities.

2. Work Part Time

   Some students choose to work part time and attend college part time. If your child wishes to do this, he or she should make sure that work, classes, and time for studying do not conflict. Some institutions offer programs that enable students to combine work and classes. Although going to school part time is a good option for many students, it usually takes longer for part-time students to earn their degrees.

3. Take Advantage of Armed Forces Education Programs

   All of the ways to get postsecondary educational training through the Armed Forces are shown in Chart 10 below. The armed forces offer educational programs during or after active duty. If your child prefers to work toward a college degree immediately after high school, attending one of the military academies or attending a civilian school and enrolling in the ROTC.

V. Long-Range Planning

How do I set up a long-range plan?

Step by step, you can help your child make informed decisions about his or her education, do well academically, learn about colleges, and find the best possible opportunities for a college education.

Following are two checklists that are designed to help you and your child, year by year, progress toward preparing for college--both academically and financially. The first list speaks directly to your child, although he or she may need your help. The second list speaks directly to you.

VI. Important Terms

What terms do I need to understand?

Below is a glossary of some terms that you may want to remember:

VII. Other Sources of Information

Where can I get more information on the topics discussed in this handbook?

This handbook was written by Elizabeth Eisner and Valentina K. Tikoff, under the direction of Alan Ginsburg, Bruno V. Manno, and Maureen A. McLaughlin. Barbara Gleason, Daniel Goldenberg, David Goodwin, Dan Morrissey, Susan W. Wolf, and Steven W. Zwillinger also contributed to the project.