The Wall Street Journal
Saturday, May 02, 2015
Some scholarships and other help are still available for students starting college this year
May 2, 2015
Most incoming college freshmen had to choose a school by May 1. Many of them—along with returning students—are staring at thousands of dollars in out-of-pocket costs that they and their families will have to pay.
There may yet be time to lower that amount.
Some free aid still is up for grabs, including scholarships from nonprofits, banks and others. There also are lower-cost alternatives to traditional college loans, including payment plans that don't charge interest.
But first, students should find out from their college’s financial-aid office whether receiving extra aid or other help could lower any need-based aid they have been awarded already.
Most colleges reduce the loans in a financial-aid package when a student receives outside scholarship money—a net positive for students, since aid that has to be repaid is replaced with free assistance. But some 20% of colleges reduce the free aid first, saysMark Kantrowitz, senior vice president at Edvisors.com, a Las Vegas-based firm that tracks financial aid.
Scholarships. Most scholarship programs set their deadlines no later than March or April, but some options still exist. To expedite a scholarship search, check the free websitesStudentScholarshipSearch.com, an Edvisors site; Fastweb.com;Petersons.com; and CollegeBoard.org.
Each site allows students to customize their search in a variety of ways, including whether they are a high school senior or returning college student, their major or other factors.
For example, Wells Fargo is offering $1,000 to 160 students through its CollegeSteps sweepstakes program, which has an Aug. 13 deadline. U.S. Bank is offering $5,000 scholarships to five students who apply, with a deadline of Sept. 17.
There also are talent-specific scholarships, including a $1,500 Get Girls Golfing award by website MyGolfInstructor.com to a female high-school senior who plans to play on a college golf team (among other requirements), with a deadline of May 15.
Students also should look for aid in their area of interest or study.
Each year, for example, 50 to 75 undergraduate and graduate students majoring in civil or construction engineering or construction management are awarded scholarships worth up to $2,000 or more by the National Asphalt Pavement Association. Deadlines vary by the state where the student is attending college; some applications still are open.
Tuition installment plans. Before taking out a loan, students should consider asking their college bursar’s office if they can sign up for a tuition installment plan. The plans, which are offered by most schools, generally allow students to split up their payments over the course of a semester or academic year.
The plans often come with an upfront fee, typically less than $100, says Mr. Kantrowitz, and generally don’t charge interest. They can be especially helpful for families who don’t have the means to pay the bill in one shot but want to avoid student loans.
State financing options. Parents and students researching loans should look beyond federal and private loans. Several states offer their own loans with lower interest rates.
Among the more affordable is a loan offered by the Georgia Student Finance Commission, which has a fixed rate of 1% and a repayment period of 15 years for students signing up for the loan for the 2015-16 school year. Students must be residents of the state and attend college there.
On Tuesday, the Texas Higher Education Coordinating Board announced that beginning in June, interest rates on one of its college student loans will drop to a fixed rate of 4.5%, down from 5.25%. The loan’s repayment period can run as long as 20 years. Borrowers must be Texas residents and attend college there.
The Rhode Island Student Loan Authority announced Wednesday that it has lowered the interest rate on its fixed-rate loans for students to as low as 3.99% for loans with a 10-year repayment period for the coming school year. Students must either be residents of the state or attending college there.
Tax breaks. Families can recoup some of their expenses quickly with the American Opportunity Tax Credit, which can be claimed for the coming fall semester when parents file their 2015 taxes.
The credit is worth up to $2,500, depending on how much parents spend on tuition, certain fees and course materials, including textbooks, with the full amount generally given when $4,000 is paid toward those expenses during the taxable year.
Taxpayers with modified adjusted gross income that exceeds $90,000, or more than $180,000 for joint filers, cannot claim the credit.
Appealing a package. Students whose financial circumstances have changed since they filed their financial-aid paperwork—or who believe that they should qualify for more need-based aid—often can appeal the aid package they have been offered. They will likely have to provide documentation, such as pay stubs or bills documenting their expenses, to their college’s financial-aid office.
But it is the students with a sudden change in finances who have the best chance at getting a more-generous package. Some schools will consider only these students for an appeal. They can submit this appeal at any point, even during the school year, says Mr. Kantrowitz.
Students whose parents lose their jobs or take a pay cut, or whose families incur unexpected medical bills that aren’t covered by insurance, for example, should provide documentation as evidence, says Karen McCarthy, senior policy analyst at the National Association of Student Financial Aid Administrators, a Washington-based group that represents financial-aid officers.