Paying for College
With tuition costs on the rise, paying for college can be a dilemma for many families. There are many solutions to help cover tuition costs: savings, loans, grants, or scholarships. Whatever route you choose, your overall strategy for paying for college should be to graduate with the least amount of debt as possible.
The Great Plains Native Asset Building Coalition recommends that families start saving for a child’s higher education as early as Kindergarten. By simply opening a savings account for a child, he or she is seven times more likely to go to college. Starting to save early can also help reduce your child’s debt that he or she graduates with by thousands of dollars.
Matched Savings Programs
Matched savings programs, also known as Individual Development Account (IDA) programs, are designed to help people achieve their savings goals, such as going to college. By participating in a matched savings program, the program facilitator matches a certain number of dollars for every dollar you deposit into a savings account. Many of the Great Plains Native Asset Building Coalition members offer matched savings programs to help you multiply your college dollars.
Another savings option is the 529 plan. A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions. Investing in a 529 plan may offer college savers special tax benefits. Earnings in 529 plans are not subject to federal tax, and in most cases, state tax, so long as you use withdrawals for eligible college expenses. To find a 529 plan in your state, visit www.savingforcollege.com.
Grants & Scholarships
Grants and scholarships are monies that do not have to be paid back, therefore, students should look into these options first.
American Indian College Fund
The American Indian College Fund’s motto is educating the mind and spirit. We achieve this by providing Native students with scholarships and providing financial support for the nation’s 34 accredited tribal colleges and universities, which incorporate American Indian culture and language into their curriculum to honor our students’ heritage and Native identity.
American Indian Education Foundation
Since 1997, the American Indian Education Foundation (AIEF) has given hope to Native American students by providing the tools they need to succeed. They enable Native American students to attend colleges or technical schools nationwide by offering several Scholarship services.
Catching the Dream
Catching the Dream, formerly known as the Native American Scholarship Fund, makes grants to Native college students and works to improve Indian schools. Scholarships range from $500 to $5,000 per academic year. Scholarships are awarded on merit and on the basis of the students we feel will most likely improve the lives of Indian people.
Federal Pell Grant
A Federal Pell Grant, unlike a loan, does not have to be repaid. Federal Pell Grants usually are awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. The maximum amount of money you receive changes yearly and depends upon your financial need, the cost of attending college, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.
When all other sources have been exhausted (saving, grants, and scholarships), it is time to look into borrowing money to pay for college. A good rule of thumb is to borrow only as much as you will make in your first year of employment after you graduate. For example, if the starting salary in your field is $32,000 per year, that is the maximum amount you should take out in loans.
Loans for college are offered through Federal programs and private institutions. Federal student loans should be the first choice for financing higher education – they are a better deal. They have lower interest rates and flexible repayment terms, while loans from private institutions have higher, and often times variable, interest rates that could lead to financial trouble.
Direct Loans for Students
Direct Loans are low-interest Federal loans to help pay for the cost of a student’s education after high school. Standard repayment plans for Direct Loans usually begin six months after you find employment upon college graduation and are in fixed monthly amounts. However, there are many repayment options to choose from. In addition, Direct Loans offer deferment options to help you with repayment if you become unemployed or decide to go back to school.