Credit Sesame discusses how Financial Aid Awareness Month 2023 can help students and their families access higher eduction.
A helping hand at the right time can make all the difference. Many Americans have money troubles at some point in their lives, but the good news is that there is help available. The key is to use that help so that financial problems do not become permanent. February is Financial Aid Awareness Month and a good time to figure out what help you may be able to get.
Financial Aid Awareness Month
The National Association of Student Aid Administrations (NASFAA) encourages students to “celebrate and learn” during Financial Aid Awareness Month. The intention is to raise awareness about the types of financial aid available to help pay for higher education and to provide information on eligibility and the application process. The main focus is on students, but the information and resources available during the month may be useful to student families, adult learners, graduate students, and others pursuing higher education. The overarching goal is to make financial aid information easy to access and understand for anyone in need of support to pursue their education.
Financial aid awareness for students
According to The College Board, the average published cost of attendance at a four-year public US college is $27,330 per year. At private colleges, it is even more, at $55,800 per year. These price tags are beyond the reach of most students, but there are programs that make a college education a little more affordable.
Making college more affordable
There are a variety of ways to make college more affordable. To use these forms of assistance in the most cost-effective way, it is advisable to prioritize in the order listed below:
- Choose a public rather than a private college to cut the published cost of attendance by slightly more than half.
- Grant and scholarship money goes towards your college bills and does not have to be paid back. Grants are generally provided based on financial need, while scholarships are awarded based on merit. Together, they can reduce the average public college attendee’s annual cost by $8,100, and the average private college attendee’s annual cost by $23,080.
- Government guarantees keep interest rates reasonable on Federal student loans, which are easy to get but have to be paid back. They also have flexible repayment terms and relief programs.
- Private student loans are more expensive than federal loans, typically, and have less flexible repayment terms. However, federal loans are subject to borrowing limits, so it may be necessary to fill some gaps in paying for college with a private loan.
The best place to get information on student financial aid is to fill out the Free Application for Federal Student Aid form on the StudentAid.gov website. It’s also a good idea to have an in-depth conversation with the financial aid office at any college you think of attending before you make a final decision.
Relief for student loan debt
Over 45 million Americans owe student loan debt, with an average balance of $35,100. Not surprisingly, a lot of people need help with that debt burden. At the time of writing, the Biden Administration’s proposal for widespread student loan debt forgiveness is blocked by the courts. However, there were already several options for making federal student loans easier to repay:
- Graduated repayment plans. These are designed to start with smaller monthly payments and gradually increase that amount over the repayment period. Repaying a loan more slowly at first makes it more expensive in the long run, but may be the best way of making payments affordable to a recent grad.
- Extended repayment plans. These stretch repayment out over a longer time. This increases the total cost of the loan, but lowers the monthly payments.
- Income-based repayment plans. These limit your repayment amounts to a reasonable percentage of your monthly income. This can increase the loan cost in the long run if it takes you more time to pay it off, but it helps make your monthly payments more affordable.
Contact your student loan servicer to find out about your eligibility for these programs. Note that with income-based plans you have to reapply each year.
Help with paying household bills
A recent bout of inflation has made it especially hard to make ends meet. There are several types of assistance available for your regular household bills:
- Food assistance. What used to be known as “food stamps” are now distributed through an electronic payments card. These are federal benefits administered through state agencies.
- Help paying the rent. The federal government’s Emergency Rental Assistance program is designed to provide aid to needy tenants. This aid is distributed though state and local agencies. There’s a search tool on the Consumer Financial Protection Bureau website that can help you locate the appropriate agency in your area.
- Affordable healthcare. Under the Affordable Care Act, online health insurance marketplaces were created for each state to help people find the most cost-effective options. Medicaid provides assistance to needy households. The Children’s Health Insurance Program (CHIP) provides extra aid to families with children. Medicare provides assistance to people over age 65 or with qualifying medical conditions.
- Assistance with utility bills. There are a number of federal programs that provide help to needy families for water, energy and phone bills. Some states and municipalities provide additional assistance. Use online resources to find the appropriate program in your area.
Options for paying tax bills
With tax season approaching, you may be worrying about how to afford your tax bill. You are not alone. According to the IRS, in the 2021 tax year over 8 million individual taxpayers were late paying their bills.
Possibly the worst thing you can do in that situation is trying to hide from the tax collector. It is preferable to work with the IRS. From filing extensions to extended payment plans to programs for partial settlement of tax debt, the IRS offers a variety of ways to work out your tax problems with them.
None of this happens automatically. You have to contact the IRS and apply for the programs. This is a better idea than waiting for the IRS to track you down.
Small business assistance
If you have a small business that’s struggling to make it through a rough period, the federal Small Business Administration (SBA) is designed to help you. They provide government-backed loans for starting or expanding a business, as well as emergency loans for companies in federal disaster areas.
The SBA also provides free business counseling and information on how small businesses can score government contracts, so they can be a resource beyond financing.
Whether you need a little help or a lot, it’s okay to ask. Assistance is available for a variety of needs. You just need to take the first step.
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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.