It seems like every year the cost of college gets higher for students and their families. In June, the Oklahoma State Regents for Higher Education approved a tuition increase for 25 of 26 state colleges. As the cost of receiving a college education continues to increase, students and their families need to be more aware of the various types of programs available to assist in covering the costs. From scholarships and grants to long-term savings programs and student loans, there are a number of options available to students. The key is to determine the right path for each individual and to know what options are available.
Savings Plans
There are only so many scholarships available each year for students entering college, so many times the best way to insure that there will be money to pay for tuition is with a good, old-fashioned savings account. The most popular savings plan is the Oklahoma 529 college savings plan, in which you are able to contribute a tax-deductible amount of up to $10,000 per year individually ($20,000 if married filing jointly) to the account. This money can be withdrawn tax-free when the student enrolls in college. However, if the student decides not to go to college, the money in this account may be subject to taxes, depending on its intended use.
“The 529 really is the most prominent plan anymore,” says Todd Hoffman, senior vice president and client advisor at Bank of Oklahoma. “You want to try and find ways to minimize the tax amount on a savings plan.”
Aside from the Oklahoma 529, Hoffman says UGMA/UTMA custodial accounts are popular as well. With one of these accounts, money is placed into an account in a minor’s name but is controlled by a custodian or trustee until the minor reaches a certain age. These types of plans carry no restrictions, and therefore when the minor reaches adulthood, he or she may use the money for any purpose.
“Many people still like using regular savings accounts,” Hoffman says. “That way they have complete control over how the money is used.”
Another way to save money that is growing in popularity is Upromise, a program that allows consumers to earn a percentage back on purchases made through partner retailers. The percentage earned can be applied to a 529 account or invested in a high-yield savings account.
“Even if you are starting a savings plan when your child has only one or two years left,” Hoffman says, “You can contribute some, and every bit helps.”
For many families opening a savings account may not be an option, but there are still numerous avenues to be explored when looking into ways to pay for college.
Do Your Research
In order to maximize potential when it comes to earning scholarships or grants, experts agree that it is best to take initiative and explore options.
“There are numerous pools of government money floating around,” says Susan Tolbart, director of recruitment and student activities at Oklahoma State University-Tulsa, “but they aren’t bottomless pools. I always urge students to start looking at the different opportunities that are out there early.
“(Students) should look at it almost like a part-time job,” says Tolbart. “They can look online at websites like Fastweb and Peterson’s and see what different types of scholarships are available.”
Students should also feel comfortable forming relationships with administration at the colleges they are considering.
“It’s not unusual for incoming freshmen to work with academic support centers on campus,” says Kayla Acevo, vice president of public relations at the University of Tulsa, “to try and find just what forms of aid they are eligible for.”
According to Acevo, knowing which questions to ask is a frequent stumbling block for high school students.
“You see it a lot,” Acevo says, “especially when a student is the first, or one of the first, in their family to go to college. I would just say don’t be daunted if the answers to your first questions aren’t what you had hoped to hear.
“This is where your relationship with your high school counselor comes into play,” Acevo continues. “You can find out what steps need to be taken.”
The first step is to submit the FAFSA (Free Application for Federal Student Aid) as early as possible. This will determine a student’s eligibility for various programs like federal Pell Grants and student loans.
Keep Your Grades Up
Not to be forgotten in the discussion is the importance of maintaining your grade point average. The competition is fierce when it comes to scholarships and grants, and students with the highest GPAs and standardized test scores usually attract the most attention.
Maintaining a high GPA increases the likelihood of receiving a scholarship, widens the scope of possible institutions the student can attend and it may decrease the need for a student loan.
“We have the highest admission standards in the state,” says Dr. John Feaver, president of the University of Science and Arts of Oklahoma, “but only 35 percent of our students graduate with debt.”
According to Feaver, students at USAO are encouraged to look at all non-debt options first, and to work with academic counselors to assure that the program they follow is efficient and without superfluous classes.
“The thing that drives costs up,” Feaver says, “is a lack of good counseling, direction and student advisement.”
Student Loans Don’t Have To Be The Enemy
Still, for many students, college would be impossible without student loans.
“Sometimes,” Tolbart says, “(a student loan) will be the only way for a student to pay for school.”
Like many schools, OSU-Tulsa offers graduating students exit counseling to make the transition from student to the professional world easier. It also serves to inform students about their responsibilities concerning repaying those student loans. A program that is growing in popularity is the Income Based Repayment (IBR) program. IBR allows enrollees to cap their monthly student loan repayments based on their income and family size.
“A lot of people choose an institution based on expectations of what college will cost,” says Acevo. “I strongly recommend to not discount any institution based on cost. Submit the FAFSA, look into the different grants and scholarships available and most importantly make sure the college you want to go to is a good match. There are always ways to pay for your education. You just have to be willing to do the work.”
