William Penn Life, 2000 (35. évfolyam, 1-12. szám)
2000-05-01 / 5. szám
What YOU Can Do ✓ Take tough classes. Study hard. Set involved in activities in your school and community. ✓ Learn about different ways to save money, such as buying U.S. Savings Bonds, opening a savings account in a bank, or investing in mutual funds. ✓ Ask your parents if you could do extra chores to earn—and SAVE—extra allowance. When your old enough, get a part-time job after school... and SAVE money for college. ✓ In 11th grade, ask your guidance counselor where you can get information on student f inancial aid and start investigating scholarships, loans and other opportunities. ✓ Work with your parents to develop a college budget plan—who'll pay for what and how. KIt>S& TEENS repeating: the longer you wait to start saving, the more difficult it will be 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: (1) Risk - the danger that the money you set aside could be worth less in the future; (2) Return - the amount of money you earn on the savings instrument or investment through interest or dividends; (3) Liquidity - how quickly you can gain access to the money in the instrument or investment; and (4) Time Frame - the number of years you will need to save or invest. If you start early enough, you may feel confident about making some long-term investments. These may be riskier, but can help you earn more money over time. You can get more information about such investments from your bank or a financial planner. Don't forget that you won't necessarily have to save for the entire cost of college. Your child may qualify for various forms of student financial aid which will help keep college costs down. Financial Aid Financial aid can help many families meet college costs. Every year millions of students apply 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. There are three main types of financial assistance available. (1) Grants and scholarships provide aid that does not have to be repaid. However, some require that students maintain certain grade levels or take certain courses. (2) Education loans, like car loans and mortgages, 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 about the interest rate, monthly payments, the term of the loan, penalties for failure to meet payments and any grace periods. Failure to repay a student loan can ruin a person's credit rating and make finances much more difficult in the future. This is why you should consider a college's graduation and job placement rates when you help your child choose a school. (3) 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 offer work-study programs to their students. A workstudy 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. Merit and Need The type of financial aid discussed above can be merit-based, need-based or a combination of the two. Merit-based assistance, usually in the form of scholarships and grants, is given to students who meet requirements not related to financial needs. 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 means that the amount of aid a student can receive depends on the cost of the college and on the family's ability to pay these costs. Most financial aid is need-based and is available to qualified students|jq>j] Money Links Perhaps the best place to start researching information on preparing financially for college is the website of the U.S. Department of Education located at www.ed.gov. For help in setting up your saving-for-college strategy, log onto the “College Planning" section at www.smartmoney.com. Willi» Pen Life, May 2000 5
