| In recent years college financial aid is usually given to low income to lower income middle class students. But what happens to those in the middle class? Often times, they are left behind when the government and colleges dole out financial aid awards for the year. The middle class is stuck with exorbitant student loans, even though they cannot afford them.
So what is a middle class family to do? How can they afford college these days?
Assess Undergraduate Financial Aid & Student Loan Consolidation Rates
When students and parents receive their financial aid award letter, they should evaluate it carefully. Most likely, they will not receive much in grants and scholarships. The federal work study program is nearly dried up for 2010-2011, so it's time to look closely at student loans.
Students must prepare for loan repayment. Nowadays, loan repayments cost as much as 30-year mortgages. It is best to get out a calculator and figure out how much students must pay back after graduation. Remember to include interest in that figure.
It's also best to look at student loan consolidation rates, which means if students combine loan repayments after graduation, how much less will they pay back. There is usually a deal for loan consolidation. However, in recent years, consolidation has not been an option, at least not from large lending companies like Sallie Mae. Students should call their potential lending provider and ask if consolidation is expected to make a comeback, and if so, what are the expected rates.
If students and parents think they can afford these government loans then take them out. Be sure that they are Perkins or Stafford loans. Bank loans are the least desirable. To make certain, learn how to evaluate a financial aid package.
Free Money for College Students from Top Ranked Colleges
Another new trend is financial aid is now available to more of the middle class at top schools. For example, Harvard University charges its undergraduates on a sliding scale for those parents who make a combined income of less than $180,000. Parents do not pay more than 10 percent of their income toward the child's college years.
Other colleges on the same path include Stanford, Yale and Rice University, which start their sliding scales at around $100,000 or less.
For those who fall into the upper middle class category, a great resource is a website called White Picket College. It is dedicated to college funding for the upper middle class and provides tax strategies and finance help on how to receive the best financial aid package possible. In fact, take a look at the best colleges for non-need based financial aid list. This list is a gem for middle class families looking for great schools that evaluate students' performance, not their parents' income level.
Finding financial aid for middle class students can be tough. Make sure to evaluate the financial aid award and look to the right university to send a middle class student.
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