Early birds get the financial aid money

Talk about sticker shock.

The average price tag for one year at a public college or university is $12,796 for 2006-07, according to the College Board. At private, four-year colleges, the price averages about $22,218. A year.

Some more numbers for thought: In the last five years, college costs have increased by about 35 percent. That's higher than the rate of inflation. And tuition rates are not expected to decrease.

If you plan to attend college this fall or you have a child who will – and you don't have an extra $50,000 to $100,000 lying around – now is the time to apply for financial aid.

The first step is to go online to www.fafsa.ed.gov and fill out the Free Application for Federal Student Aid.

Compared with a decade ago, virtually all students now file the FAFSA online, said Tim Wendt, associate director of financial aid at Parkland College in Champaign.

"You get it done quicker, and it's less error-prone," he said. "And the turnaround is a lot quicker."

Even though it's become easier to file the forms, applying for financial aid still can be intimidating.

"It can be kind of daunting. There are still questions: 'When do I fill out the forms?' and 'Am I doing this right?' " Wendt said.

College financial aid administrators recommend students fill out the FAFSA by March 15. If they do, they should be able to receive their award notices in April.

To fill out the FAFSA, students and parents need to have on hand a slew of documents such as income tax forms, bank statements, mortgage and investment information and identification numbers such as Social Security numbers and driver's license numbers.

Financial aid eligibility is based on last year's income, but if your financial situation has changed drastically, you'll need to fill out what's called a Special Circumstances Form, which is also available from the federal government.

After you file your FAFSA, the U.S. Department of Education's federal student aid office will produce a student aid report. That will estimate your family contribution. The schools that receive your report from the government (students choose the schools on the FAFSA form) eventually send you an award notice outlining the type and amount of aid you can expect.

Aid comes in several different forms. Grants, like the federal Pell Grant or the state Monetary Award Program (called the MAP grant) are essentially free money – gifts. As for the federal Perkins or Stafford loans, you'll have to pay those back. Students and parents can borrow directly from the U.S. government or go to a private bank.

A wide variety of grant programs are available to all kinds of students: veterans; minorities who intend to be teachers; students who want teach special education; etc. Financial aid administrators should be able to help students apply for the right grants.

This year, a few new state and federal government grant programs have started, Wendt said:

– The federal academic competitive grant is available to freshmen and sophomores. It's a need- and merit-based grant.

Essentially, if a student is able to receive the federal Pell grant and completes a rigorous high school curriculum, he or she can be eligible for the grant. The amount for first-year students is $750 a year. Second-year students can get $1,300 if they meet other criteria.

– The federal SMART grant is for juniors and seniors who meet merit and need requirements. It's available to students who are enrolled in certain disciplines, such as sciences, engineering, math, technology or certain foreign languages.

The National SMART grant can provide up to $4,000 for each third and fourth year of the student's study.

– The state offers MAP Plus grants for resident students who meet certain income requirements. The amount of the grant can vary depending on factors such as the family's income and the school the student will attend.

The new program is geared to students who come from families with incomes of less than $200,000 a year. The $500-a-year grant for residents will be financed by the sale of the state's pending student loan portfolio.

In addition to securing federal and state aid this spring, students should spend the next few months applying for scholarships.

"Springtime is the big time for incoming freshmen and those already in college to apply," Wendt said.

In addition to universities and colleges themselves, countless foundations, companies and other agencies offer scholarships.

Wendt recommends students research for national scholarships on www.fastweb.com. For local scholarships, students should obtain a list from a high school counselor.

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