Funding Your Future: Financial Aid Awareness Month
February, a brief month brimming with noteworthy events and celebrations, also holds the distinction of being Financial Aid Awareness Month.
What is Financial Aid Awareness Month?
February marks Financial Aid Awareness Month, a time dedicated to raising awareness about the challenges of financing education. Numerous individuals aspire to pursue formal education, yet the burden of school fees often proves overwhelming. This is where financial aid becomes crucial.
This month, we share important information to help you understand how to get help and explore your options.
Many educational institutions advocate for completing the FAFSA® (Free Application for Federal Student Aid). If you aspire for higher education post-high school and seek insights into cost-cutting measures, this month presents an opportune time to delve deeper into the funding procedures of your chosen college or university.
History of Financial Aid Awareness Month
You might be curious about what financial aid is and how to access it. In the US, financial aid is money for students who want to go to college or university for further education. This funding proves invaluable in covering various costs for students.
Financial aid began in the 16th Century of rich people helping the poor. In the 1950s, colleges received money for scholarships and made their own rules for giving it out. In 1964, President Johnson created a program for students to work part-time while studying to help pay for their education.
In 1965, the U.S. government became the main source of financial aid for college through the Higher Education Act. Financial aid for students has become more complicated, causing worries about bureaucratic difficulties.
Financial Aid Options
Despite the complexity, there are numerous options available for those choosing the financial aid route to support their education. These options include student loans, grants, work-study programs, tax credits, and various state initiatives.
Complete the FASFA-Many individuals opt to overlook the Free Application for Federal Student Aid (FAFSA) for various reasons. Some people find it scary and time-consuming. Others worry about not receiving help or feel uncertain about sharing personal details.
In reality, completing the FAFSA can be highly beneficial. The process is safe and can find the best financial help and student loans for your child or grandchild. Moreover, it may make them eligible for specific grants and scholarships, enhancing their overall financial support.
Search for Grants and Scholarships-While the application process for most grants and scholarships is relatively brief, the potential savings for your child or grandchild in higher education costs can be substantial. This holds especially true if they qualify for multiple grants or scholarships.
Merit-based scholarships are awarded based on factors like high school GPA, excellent test scores, or demonstrated athletic prowess. In contrast, need-based grants consider the financial situation of the student's family. It's crucial to educate your child or grandchild on the distinction between grants and scholarships.
Take advantage of Financial Aid Awareness Month to explore potential grants and scholarships in which they may qualify. Opportunities come from different places like governments, schools, and organizations such as unions, religious centers, and nonprofits. Additionally, online platforms like FastWeb or Scholarships.com can provide valuable resources in the search for financial assistance.
College Savings Options-Furthermore, if you've actively contributed to your child's or grandchild's college savings account, congratulations! Take a moment to familiarize yourself with the guidelines for tax-free fund withdrawals. If you haven't initiated a college fund, it's never too late to begin. Popular college savings options include:
529 plans
Coverdell ESAs
Life insurance
Savings bonds
Bottom Line
In summary, let's collaboratively assess your financial plan. Utilize Financial Aid Awareness Month to proactively plan for your child's or grandchild's education, making any necessary adjustments. Following that, please reach out to our office to arrange a review of your college savings strategy.
Sources:
https://benderretirement.com/2021/02/22/financial-aid-awareness-month-tips-and-ideas/
https://nationaltoday.com/financial/
Disclosures:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
This site may contain links to articles or other information that may be on a third-party website. Advisory Services Network, LLC is not responsible for and does not control, adopt, or endorse any content contained on any third-party website.
This material is provided as a courtesy and for educational purposes only. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.
529 Plan, or "qualified tuition plan," is an investment account that provides tax benefits when the savings are used for qualified education expenses. Withdrawals from a 529 plan account can be taken at any time, for any reason. But, if the money is not used for qualified education expenses, you will incur a 10% penalty and owe taxes on any investment gains.
These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.