All right, it’s true; I’ve already lied to you.  There is no such thing as free money.  Searching for scholarships is going to cost you time and energy in no small amounts. Realistically, if you are truly serious about finding as much scholarship money as possible, you are looking at about 50-60 hours of work, not to mention additional time for stellar essays and applications.  I know what you’re thinking, that’s 50-60 hours extracted from Friday night movies, Saturday afternoons with the girls, and after school phone calls to your BF. Compare and contrast though to the alternative: Tens of thousands of hours post-graduation working to pay off the ridiculous interest rates on your student loans that can take ten, fifteen plus years to pay off. Suddenly searching for scholarships sounds like a dream vacation, doesn’t it? And lucky for you, I care about your social life and have done some of the legwork for you.

What kinds of scholarships are there?
•    College Specific: usually offered as part of your financial package from the school you are attending, doesn’t typically have an application separate from your admissions application.

• Athletic Scholarships: Highly competitive, so make sure you stay on top of this one. Check out the website for the National Collegiate Athletic Association (NCAA).  Also check out www.collegesportsscholarships.com, a website founded by a college athlete and his dad, offering lots of free information and advice.
• Academic Awards: Merit based, talk to the financial aid office of your prospective school and ask if there are additional forms to fill out.

•    Private Organizations

• Corporations: Offer scholarships in order to attract or retain employees. Students often forget to examine this resource which means they are less competitive and often even go to waste due to lack of applicants. Look into companies you may wish to work with after graduating, check local newspaper listings and your local chamber of commerce, and ask your parents if their companies offer any opportunities.
• Religious Organizations: If you belong to a church or temple, they may have educational funds available.
• Unions: Check out the AFL-CIO website www.aflcio.org and search the words “college scholarship.”

•    High School and School District: Your high school or school district often has scholarships for graduating seniors
•    Military: Think carefully about this option.  While providing excellent educational opportunities and financing, these are awarded in return for tours of duty.
•    Other: This cute little miscellaneous category is actually the one that offers the most opportunities for money, and some of the more fun assignments to earn them. This is wear search engines on the ol’ interweb come into play, and where you’re going to go craziest checking little online boxes. However, these are the sites you should check out first:

• www.finaid.com (fast, free, bonus of email notifications and a tracker to help remind you of approaching due dates, don’t be distracted by all the advertisements)
• www.petersons.com (grants)
• www.ducktapeclub.com (good search engine and words of insight)
• www.ja.org (Junior Achievement Organization. Lots of scholarships, but not so user-friendly.)
• www.scholarships.com (search engine with some bonus organizing tools)

Don’t forget to document what scholarships you find on each website so that you don’t waste more time by tracking them down all over again. Another old-timey but useful search engine is a published scholarship directory. I know books are totally outdated, but sometimes just flipping through the pages will turn you on to something a key word wouldn’t connect on a website. Your school guidance counselor probably has one of these or a notebook they’ve compiled themselves. Ask them or check your local library.

Good luck as you start out on your journey to college financing. In the meanwhile, shoot any questions, feedback, website critiques, etc. to diane@iamthatgirl.com.

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So you’ve exhausted every possible lead for a scholarship, but there is still a looming gap of zeros in your education costs. You’re ready to bite the bullet and sign your name in blood to interest rates and payment plans. But what about this recession everyone’s talking about? What about that $1.6 billion loss Sallie Mae posted last quarter? Who can you trust to still give you a fair interest rate?

It’s a slippery slope and my first advice to anyone contemplating major loans right now, is buyer beware! We’ve all learned valuable lessons in the last year when it comes to adjustable interest rates. Make sure you ask lots of questions and have a complete understanding of your terms of agreement.  This is your financial life for the next 10 years; it’s not to be taken lightly.

With that admonishment out of the way, here are your jumping off points:

Subsidized and Unsubsidized: These words are bandied about endlessly, but what do they mean? In a nutshell, subsidized means the government is going to pay the interest on your loans while you’re in school, and probably for up to 6 months after you graduate. Unsubsidized means you are responsible for the interest immediately. Usually you have the option of either beginning payments on the interest immediately, or deferring them up to 6 months after graduation when you begin payments on the principle.

Federal Loans: These are the bad boys that you’re looking for.  They have fixed interest rates and are typically subsidized. You apply for these loans by filling out the FAFSA (Free Application for Federal Student Aid). There are mainly three different kinds of loans, the Perkins Loan, the Stafford Loan, and the PLUS Loan.

• Perkins: You’ll have to prove exceptional financial need, but it’s perfect for independent students. Typically it’s a 5% fixed interest rate and it can grant you up to $20,000 for undergraduate, and up to $40,000 combined undergraduate and graduate. The best bonus is that these loans could be cancelled if you go in to fields like nursing or law enforcement, volunteer for the Peace Corps. or go on to teach in a low-income school.

• Stafford: Be cautious of the Stafford because it can be either subsidized OR unsubsidized. If your family can prove less than $50,000 of gross income per year you can be approved for the subsidized version. Otherwise they may offer you the unsubsidized loan. The interest rates on this loan are currently higher than the Perkins, around 6%, but by 2011 it should be a mere 3.4% due to a government program.

• PLUS: (Parent Loan for Undergraduate Students) This is a loan designed to cover the gap between the financial aid packet that a school offers you and what you actually need, including books and room and board. It’s deceiving in its name, because you can also apply for it if you are a graduate or professional student. Interest rates are around 8.5% and vary depending who is offering, and based on your credit check. You must apply separately from the FAFSA. Look for banks and credit unions that offer federal education loans.

Private Loans: These are your riskier loans due to the fact there are no government- backed securities.  Despite private loans being a whopping 20% of the student loan market, they are not only going to be harder to find and obtain, but interest rates can vary from 8% to a terrifying 19%. These are loans from banks and credit unions that are not part of a federal student loan program, and repayment will probably begin immediately.

IATG Quick Tips:

•    Don’t procrastinate. Fill out that FAFSA ASAP!
•    Talk to your financial aid office! They can point you in the direction of your best private loan options if federal loans don’t come through.
•    Find a co-signer who can increase your credit score, it could help you out with more money and a lower interest rate.
•    Don’t get discouraged, the money is out there and you will find it.

Questions, comments, and concerns: send them my way at diane@iamthatgirl.com

photo by bill mcbain

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