Consumer Information

Copyright © 2001 - 2004 Soaring Eagle Software, Inc.

Home

webCalculators

Products

Comparison

FAQs

Testimonials

Guarantee

Purchase

Web Resources

Contact SES

Privacy Policy

Legal Notice

Site Map

Consumer Information

Preparing Your Child for College
A Resource Book for Parents
2000 Edition

U.S. Department of Education
Office of Under Secretary
Planning and Evaluation Service

CONTENTS

Letter from the Secretary of Education

I. General Questions about College

Why attend college?
What types of colleges exist?
What kinds of jobs are available to college graduates?

II. Preparing for College

What can my child do to prepare academically for college?
What can my child do outside the classroom to prepare for college?

III. Choosing a College

How can my child go about choosing a college?

IV. Financing a College Education

How much does a college education cost?
How can I afford to send my child to college?
What are the most common sources of financial aid?
Is my child eligible for financial aid? If so, how much?
Tax credits, deductions, and deferrals
Are there other ways to keep the cost of college down?

V. Long-Range Planning

How do I set up a long-range plan?

VI. Important Terms

What terms do I need to understand?

VII. Other Sources of Information

Exercises and Checklists for You and Your Child

Help Your Child Think about a Career
Course Planner for Parent and Student
College Inquiries
College Preparation Checklist for Students
Financial Preparation Checklist for Parents

Charts

Chart 1: Examples of Jobs Requiring College Preparation
Chart 2: High School Courses Recommended for College
Chart 3: Questions to Ask Guidance Counselors
Chart 5: Typical College Costs
Chart 7: Amount You Would Need to Save to Have $10,000 Available When Your Child Begins College
Chart 8: How Much Need-based Financial Aid Can My Child Get?
Chart 10: Examples of Savings Instruments and Investments

---

A  NOTE TO PARENTS

Education can be the fault line between those who will prosper in the new economy and those who will be left behind. Today's good jobs require skills and training beyond a high school education, and effective and accessible postsecondary education is critically important to individuals as well as our nation's economy and democracy. In fact, the Census Bureau estimates that a person with a bachelor's degree earns about $600,000 more in today's dollars over the course of a lifetime than a person whose education ended with high school.

You and your family can take specific actions to prepare properly - both academically and financially - to put America's excellent colleges and universities within reach of your children.

First, your child will need to study hard at every level and take the courses in middle and high school that lay the foundation for success in college-level courses. This has to include taking challenging math courses throughout high school. Second, it is important for you and your child to try to put money aside for college and to be well informed about the many sources of student financial aid for college. College costs are not nearly as high as many families assume, and there are many financial aid programs like Pell Grants, federal work-study, loans, and Hope Scholarship and Lifetime Learning tax credits that make college more affordable.

This resource book is designed to help you and your child plan ahead for college. It describes the types of courses students should take and when to take them, how to work with teachers and school counselors to choose colleges that fit your student's needs, and how to plan financially for the costs of college.

President Clinton has emphasized universal access to postsecondary education and lifelong learning as top priorities of his administration. In addition to tax credits, he has proposed an increase in the maximum size of the Pell Grant, community service loan forgiveness programs, better borrowing and repayment options for student loans, and creation of education individual retirement accounts (IRAs). He has also worked with Congress to pass the Gear Up legislation to establish broad partnerships supporting middle schools and to help families plan for their children to attend college.

The American family is the basis on which a solid education can and must be built. Years of research show that family involvement in children learning is the key to putting children on the right path in life; your interest in helping your child prepare for college is an example. That is why we have formed the Partnership on Family Involvement in Education, an organization of thousands of parent, religious, business, and education organizations dedicated to creating family-friendly schools, businesses, and communities. Materials about the Partnership may be of interest to you and are available by calling 1-800-USA-LEARN, where you can also obtain another booklet - Getting Ready for College Early - specifically for middle school students. You can learn more about Department programs and assistance by visiting our azvard-winning Internet web site at www.ed.gov.

Ultimately, families like yours who work with your children, their teachers, and their principals to improve schools are the ones who determine student success. Thank you for your interest in this book and your commitment to the education of our Nation's youth. I hope you find that Preparing Your Child for College makes a difference in your child's life.

Sincerely,

Richard W. Riley
U.S. Secretary of Education

---

Why attend college?

A college degree can provide your child with many opportunities in life. A college education can mean:

• Greater Knowledge

A college education will increase your child's ability to understand developments in science and in society, to think abstractly and critically, to express thoughts clearly in speech and in writing, and to make wise decisions. These skills are useful both on and off the job.

• More Money

A person who attends college generally earns more than a person who does not. For example, in 1997, a person with a college degree from a four-year college earned approximately $18,000 more in that year than a person who did not go to college. Someone with a twoyear associate's degree also tends to earn more than a high school graduate.

• Greater Potential

A college education can help increase your child's understanding of the community, the nation, and the world-as he or she explores interests, discovers new areas of knowledge, considers lifelong goals, and becomes a responsible citizen.

• More Job Opportunities

The world is changing rapidly. Many jobs rely on new technology and already require more brain power than muscle power. In your child's working life, more and more jobs will require education beyond high school. With a college education, your child will have more jobs from which to choose.

Some of these benefits of college may not be obvious to your child. Even though he or she has to make the final decision to attend college, you can help in the decision-making process by learning about all aspects of college yourself and sharing what you learn with your child.

What types of colleges* exist?
*Throughout this document, the word college is used to refer to all postsecondary institutions-technical colleges, junior colleges, community colleges, other two-year colleges, and four-year colleges and universities.

More than half of all recent high school graduates in the United States pursue some type of postsecondary education. In many other countries, a smaller percentage of students go on for more schooling after high school. However, in America, recent surveys show that most parents want their children to get some college education. There are many higher education options in the United States. For this reason, your child is likely to find a college wellsuited to his or her needs.

There are two basic types of post-secondary education institutions:

• Community, Technical, and Junior Colleges

Many kinds of colleges offer programs that are less than four years in length. Most of these schools offer education and training programs that are two years in length or shorter. The programs often lead to a license, a certificate, an associate of arts (A.A.) degree, an associate of science (A.S.) degree, or an associate of applied science (A.A.S.) degree.

• Four-Year Colleges and Universities

These schools usually offer a bachelor of arts (B.A.) or bachelor of science (B.S.) degree. Some also offer graduate and professional degrees.

Community, Technical, and Junior Colleges

Colleges with programs that are less than four years in length are often called community colleges, technical colleges, or junior colleges:

Community Colleges: These are public, two-year colleges. They mostly serve people from nearby communities and offer academic courses, technical courses, and continuing education courses. Public institutions are supported by state and local revenues.

Technical Colleges: These are generally colleges that have a special emphasis on education and training in technical fields. However, although some technical colleges offer academic courses and programs, not all technical colleges offer twoyear programs that lead to an associate of arts or science degree. Technical colleges may be private or public. Junior colleges and community colleges that offer many technical courses are often called "technical colleges."

Junior Colleges: These are generally two-year colleges that are private institutions. Some junior colleges are residential and are attended by students who come from other parts of the country.

Some programs at two-year colleges lead to an A.S. or A.A. degree in an academic discipline. These academic programs are often comparable to the first two years of a general academic program offered by a fouryear college or university. In many cases, students who earn two-year degrees may enter four-year schools and receive credit toward their B.A. or B.S. degrees.

Many junior and community colleges offer technical and occupational training, as well as academic courses. For example, many cardiovascular technicians, medical laboratory technicians, and computer technicians received their education and training at junior colleges, community colleges, or technical colleges.

Many junior, community, and technical colleges offer technical programs in cooperation with local businesses, industry, public service agencies, or other organizations. Some of these programs are formally connected to education programs that students start in high school; they are often referred to as "tech-prep" or "school-to-career" programs.*
*These school-to-career or tech-prep programs often provide students with an opportunity to learn new skills by working fora local employer and by taking high school courses that link with courses offered atlocal colleges.

Two-year colleges such as community colleges often operate under an "open admissions" policy that can vary from school to school. At some institutions, open admissions policies mean that anyone who has a high school diploma or GED certificate can enroll. At other schools, anyone 18 years of age or older can enroll or, in some cases, anyone deemed able to benefit from the programs at the schools can enroll.

Application requirements at colleges with two-year programs and shorter programs may include a high school transcript-a list of all the courses your child took and grades earned in four years of high schooland college entrance examination scores as well. Some schools have programs that allow open admissions, while other programs in the same school-particularly in scientific or technical subjects-may have further admission requirements. Because requirements vary widely, it is important to check into schools and programs individually.

Four-Year Colleges and Universities

Students who wish to pursue a general academic program usually choose a four-year college or university. These institutions may be either public or private. Such a program lays the foundation for more advanced studies and professional work. These colleges and universities primarily offer B.A. and B.S. degrees in the arts and sciences. Common fields of study include biology, chemistry, economics, English literature, foreign languages, history, political science, and zoology.

Here are the main differences between four-year colleges and universities:

Four-Year Colleges: These are postsecondary schools that provide four-year educational programs in the arts and sciences. These colleges confer bachelor's degrees.

Universities: These are postsecondary schools that include a college of arts and/or sciences, one or more programs of graduate studies, and one or more professional schools. Universities confer bachelor's degrees and graduate, master's and Ph.D. degrees. Many universities also confer professional degrees, for example, in law or medicine.

When a student earns a bachelor's degree it means that he or she has passed examinations in a broad range of courses and has studied one or two subject areas in greater depth. (These one or two subject areas are called a student's "major" area(s) of study or area(s) of "concentration.") A bachelor's degree is usually required before a student can begin studying for a graduate degree. A graduate degree is usually earned through two or more years of advanced studies beyond four years of college. This might be a master's or a doctoral degree in a particular field or a specialized degree required in certain professions such as law, social work, architecture, or medicine.

What kinds of jobs are available to college graduates?

Certificates and degrees earned by graduates of twoand four-year colleges or universities lead to different kinds of professional opportunities. Many professions require graduate degrees beyond the traditional four-year degree, such as a medical degree or a law degree. For example:

• A course of study in bookkeeping at a community college may prepare a student for a job as a bookkeeper.
• A four-year degree in economics may prepare a student for any one of several jobs in a bank or a business.
• A four-year degree in English may serve as background for elementary or secondary school teaching or for work as an editor with a magazine.

In Chart 1, below, there is a partial listing of different occupations and the educational background generally required or recommended for each. Some people who go on to acquire jobs in the four-yearcollege column obtain a graduate degree or some graduate education, but many of these jobs can be filled by people who do not have more than a four-year college education. For more information on the educational requirements of specific jobs, contact a guidance counselor or check the latest copy of the Occupational Outlook Handbook, published by the U.S. Department of Labor, in your library. (See the last section of this handbook for information on other publications that discuss jobs.)

CHART 1
Examples of Jobs in Which a College Education May Be Recommended or Required
Two-Year College (Associate's Degree) Administrative Assistant Automotive Mechanic Cardiovascular Technician Commercial Artist Computer Technician Dental Hygienist Drafter Engineering Technician Funeral Director Graphic Designer Heating, Air-Conditioning, and Refrigeration Technician Hotel or Restaurant Manager Medical Laboratory Technician Medical Record Technician Insurance Agent Registered Nurse Surgical Technologist Surveyor Visual Artist Water and Wastewater Treatment Plant Operator	Four-Year College (Bachelor's Degree) Accountant Computer Systems Analyst Dietitian Editor Engineer FBI Agent Investment Banker Journalist Medical Illustrator Pharmacist Public Relations Specialist Recreational Therapist Research Assistant Social Worker Teacher Writer	More than Four Years of College (Various Graduate Degrees Required) Architect Biologist Chiropractor Dentist Diplomat Doctor Economist Geologist Lawyer Librarian Management Consultant Paleontologist Priest Psychologist Public Policy Analyst Rabbi Scientist Sociologist University Professor Veterinarian Zoologist

 

EXERCISE

Help Your Child Think about a Career Step 1: Using the form below, sit down with your child and make a list of jobs that sound interesting. It may help to first think about friends or people you've read about or have seen on television who have interesting jobs. List those jobs in the left-hand column. If your child cannot think of interesting jobs, have him or her list subject areas of interest. Then try to help your child identify jobs in those subject areas. Depending on the job, there may be courses in middle school or high school that will give your child a preview of the type of knowledge that is needed for the particular job. In the right-hand "Education" column, write down the level of education required for the job and any high school or college courses that may help your child prepare for such a career. Step 2: Take the form to your local library and, with the help of a reference librarian, locate books and search the Internet for information on some of the careers your child has selected. Libraries usually have directories that list career requirements. It is not a problem if your child does not know what career path he or she wants to follow; his or her focus during these years should be on doing well in school.

 

Help Your Child Think about a Career
Career of Job	Education
1.	High School:
	College:
2.	High School:
	College:
3.	High School:
	College:
4.	High School:
	College:
5.	High School:
	College:
6.	High School:
	College:

What can child do to prepare academically for college?

Take Courses Recommended for College-Bound Students

To prepare for college, there is no substitute for your child getting a solid and broad academic education. This means your child should take challenging courses in academic subjects and maintain good grades in high school. Your child's transcript will be an important part of his or her college application.

A college education builds on the knowledge and skills acquired in earlier years. It is best for your child to start planning a high school course schedule early, in the seventh or eighth grade. Research shows that students who complete algebra and geometry by the end of ninth grade are more likely to go to college than those who do not. By taking these courses early, students are then prepared to take geometry, trigonometry, calculus, and science courses in high school.

Most selective colleges (those with the highest admissions requirements) prefer to admit students who have taken courses in certain subject areas. For example, many colleges prefer that students have taken challenging science courses and mathematics courses beyond general math and algebra. Basic computer skills are now essential, and some colleges prefer three or four years of a foreign language. Your child's guidance counselor can help your child determine the high school courses required or preferred by different types of colleges. If your child is interested in specific colleges, he or she can contact those schools and ask about their admissions requirements. Many high schools offer advanced placement (AP) courses and exams. AP courses are college-level courses in approximately 16 different subjects; they help students prepare for college-level work while they are still in high school. Students who take AP courses are often more prepared for the academic challenges presented in college. In addition, a student who takes an AP course, and who scores a grade of 3 or higher on an AP exam, can often receive advanced placement in college or credit for a college course*. Talk to one of your child's teachers, your child's guidance counselor, or the principal of your child's school to find out if the school offers AP courses. If they don't, ask whether they might consider offering AP courses in the future.
*This can result in significant cost savings. However, not all colleges and universities give credit or advanced placement for earning a grade of 3 or higher on an AP exam. Write to the admissions office ofthe colleges that are of interest to your child to find out if they give credit for an AP exam grade of 3 or higher. Ask to obtain the college's AP policy in writing or look for a policy in the institution's catalog.

Chart 2 lists the high school courses that many higher education associations and guidance counselors recommend for a college-bound student. These courses are especially recommended for students who want to attend a four-year college. Even if your child is interested in attending a junior college, community college, or technical college, he or she should still take most of these courses since they provide the preparation necessary for all kinds of postsecondary education. (In addition, many students who attend two-year colleges go on to earn a B.A. or B.S. degree at a four-year college or university.)

Mathematical and scientific concepts and skills learned in math classes are used in many disciplines outside of these courses. Recent studies have shown that students who take higher level math courses are more likely to go on to, and complete, college than students who do not.

Traditional English courses such as American and English literature will help students improve their writing skills, reading comprehension, and vocabulary. History and geography will help your child better understand our society as well as other societies around the world.

Research also indicates that students who take courses in the arts disciplines and who participate in the arts (performing arts and visual arts) often do better in school and on standardized tests. The arts help students to learn; they often give students a richer understanding of history, science, literature, and math.

Thirty states require students to take some art course(s) (visual or performing) before graduating from high school; six state university systems require students to take at least one unit of art (visual or performing) at the high school level before gaining admission to the university. Many college admissions staff view participation in the arts as a valuable experience that broadens students' understanding and appreciation of the world around them.

CHART 2
Recommended High School Courses for College-Bound Students Although academic requirements differ among colleges, the admissions requirements listed below are typical for four-year colleges. The specific classes listed here are examples of the types of courses students can take.
English-Four years Types of classes: American Literature Composition English Literature World Literature Mathematics-Three to four years Types of classes: Algebra I Algebra II Calculus Geometry Precalculus Trigonometry History & Geography-Two to three years Types of classes: Civics Geography U.S. History U.S. Government World History World Cultures	Laboratory Science-Two to four years Types of classes: Biology Chemistry Earth Science Physics Foreign Language-Two to four years Visual & Performing Arts-One year Types of classes: Art Dance Drama. Music Challenging Electives-One to Three Years Types of classes: Communications Computer Science Economics Psychology Statistics

Things You and Your Child Can Do To Prepare for a Technical Program at a Community, Junior, or Technical College

If your child is interested in pursuing a technical program in a community, junior, or technical college, he or she may want to supplement or substitute some of the electives listed in the chart with some vocational or technical courses in his or her field of interest. However, many technical fields, such as engineering and computer science, demand high levels of science and math. Regardless of the career your child is interested in pursuing, he or she should take the suggested courses in at least the core areas of math, science, English, history, and geography. Look especially for more advanced technology courses in the junior and senior years of high school.

Talking to an administrator or professor from a community, junior, or technical college is a good way to find out about the best high school courses to take in order to prepare for a specific technical program offered at that college. The dean of a particular technical program will also be able to tell you about the entry requirements for the program.

You may want to ask educators at a local college (or staff at your child's school) about educational programs that have formal connections between the high school and the local college. There are many career-focused programs that are offered by a network of high schools, local colleges, and, sometimes, local employers. Many of these programs are known as "tech-prep," "two-plus-two,"or "school-to-work" programs. The high school course work in these programs is formally linked to the course work offered at the local colleges. In this way, the high school material better prepares students for the college-level work. It also starts the student on a clear path toward a college degree.

Tech-prep and two-plus-two programs often refer to educational programs offered by networks of school districts and colleges. Such programs offer students career "pathways" that link their high school classes to advanced technical education in colleges or apprenticeship programs. These programs are often called twoplus-two programs because they span the last two years of high school and the first two years of college. Thus, they are four-year programs.

These programs emphasize applied leaning-the teaching of academic material through hands-on experience. In addition, students in tech-prep and two-plus two programs receive extensive academic and career guidance from counselors and teachers.

"School-to-work" is the term that often refers to career-focused programs that have many of the same elements as tech-prep and two-plus-two programs. In addition, "school-to-career" programs also provide students with the opportunity to learn in a real work setting. Students have the opportunity to spend time at a local worksite where they can apply their skills and acquire new ones.

Make Sure That All Courses Meet High Standards

It is vital that your child not only enrolls m the courses recommended for college-bound students, but also that the material taught in those courses reflects high academic standards and high expectations for what students should know and be able to do. Research indicates that high expectations and high standards improve achievement and positively influence student learning. Efforts are under way in states and communities across the country to answer the question: What is it that our children ought to know and be able to do ... to participate fully in today's and tomorrow's economy? Many states and local communities have been developing or revising their standards (sometimes called "curriculum frameworks") in core subject areas such as math, science, English, history, geography, foreign languages, civics, and the arts. These standards help provide parents with answers to questions such as:

"Is my child learning?"

"What is it that my child should know by the end of each grade?"

Many school districts are taking the initiative in setting higher standards. In many communities, parents, teachers, administrators, business leaders, clergy, college representatives, curriculum experts, and interested citizens are working together to develop or revise standards. In creating their own standards, many states and communities are drawing on model standards developed by national professional associations.

In order to make sure that the curriculum in your child's school meets high academic standards, call your child's school to find out if state or local standards are being developed. Ask how you can get involved in the standard-setting process. Join with other parents, teachers, and your child's principal and compare your school's standards against the best schools and the best state standards.

Take the Standardized Tests That Many Colleges Require

Many of the courses recommended for collegebound students (such as geometry and rigorous English courses) are also essential preparation for the college entrance examinations-the SAT* (Scholastic Assessment Test) or the ACT Assessment. The SAT measures verbal and mathematical reasoning abilities. The ACT Assessment measures English, mathematics, reading, and science reasoning abilities. Students applying to colleges in the East and West usually take the SAT exam. Students applying to schools in the South and Midwest often take the ACT, however, students should check the admission requirements at each school to which they are applying.
*The general SAT test is also referred to as the SAT I to distinguish it from the SAT subject test, which is also called the SAT II.

Usually, the tests are offered in the junior and senior years of high school and can be taken more than once if a student wishes to try to improve his or her score. Students can get books at libraries or bookstores to help them to prepare for all of the tests. Some of these books are listed at the back of this resource book. In addition, some private organizations and companies offer courses that help students prepare for these exams.

Many schools offer the Preliminary Scholastic Assessment Test/National Merit Scholarship Qualifying Test (PSAT/NMSQT) to their students. This practice test helps students prepare for the Scholastic Assessment Test (SAT). The PSAT is usually achninistered to tenth or eleventh grade students. A student who does well on this test and who meets many other academic performance criteria may qualify for the National Merit Scholarship Program. You and your child can find out more about the PSAT/NMSQT and the National Merit Scholarship Program by talking to your child's guidance counselor or by calling or writing to the number or address provided in the back of this guide.

Some colleges also require that an applicant take one or more SAT subject tests in major areas of study. These tests are also known as SAT II tests. SAT II subject tests are offered in many areas of study including English, mathematics, many sciences, history, and foreign languages. A subject test measures the extent of a student's knowledge of a particular subject. It is a good idea for a student to consult a guidance counselor about this test early in high school; often the best time to take an SAT subject test is right after the student has taken a course in that subject. For example, many students take the SAT biology test right after they have completed a course in biology. This could mean that your child would take his or her first SAT subject test as a freshman or sophomore in high school.

At the back of this handbook, in the section that lists places where you can get additional information, you will find the address and phone number where you can write or call for more information about the SAT general test and the SAT subject tests. You will also find the address and phone number for the organization that administers the ACT.

Knowing what will be required for college is important, by taking the right courses and examinations from the beginning of high school, your child may avoid admission problems later on. In addition, students who do not prepare well enough academically in high school, if admitted to college, may be required to take remedial courses. Most colleges do not offer credit for these courses, and students may have to pay for these extra courses and spend extra time in college to earn their degrees. Studies have also shown that students who take more rigorous courses in high school are more likely to complete college. Chart 3 lists some questions that you or your child may want to ask your child's guidance counselor.

CHART 3

Questions to Ask Guidance Counselors

What basic academic courses do you recommend for students who want to go to college? What activities can students do at home and over the summers to strengthen their preparation for college? How many years of each academic subject does the high school require for graduation? How much homework is expected of students preparing for college? What elective courses do you recommend for college-bound students? What do different colleges require in terms of high school grades and SAT or ACT scores? Can students who are considering college get special help or tutoring?

 

 

EXERCISE
Course Planner for Parent and Student
This exercise will give you and your child a chance to look ahead and choose future courses. Be aware that some courses must be taken in sequence. On the form below, list your child's current courses or courses he or she will take this year. Then list courses that he or she will take during each year of high school. If you are not sure what courses your child should take, you should make an appointment with your child's guidance counselor and get some advice.
	This Year: ______Grade		Next Year: _____Grade
	Fall Semster	Spring Semester	Fall Semester	Spring Semester
English
Full Course Title:
Mathematics
Full Course Title:
History/Social Studies
Full Course Title:
Science
Full Course Title:
Foreign Language
Full Course Title:
Other
Full Course Title:

 

EXERCISE
Course Planner for Parent and Student
	_____ Grade		_____ Grade		_____ Grade		_____ Grade
	Fall Semester	Spring Semester	Fall Semester	Spring Semester	Fall Semester	Spring Semester	Fall Semester	Spring Semester
English
Full Course Title:
Mathematics
Full Course Title:
History/Social Studies
Full Course Title:
Science
Full Course Title:
Foreign Language
Full Course Title:
Other
Full Course Title:

What can my child outside the classroom to prepare for college?

A student's interpersonal and leadership skills as well as outside interests and goals are all important for college preparation. Independent reading and study, extracurricular activities, and work experience will all help your child develop his or her skills, interests, and goals.

Independent Reading and Study

Independent reading and study will help your child to prepare academically for college. This is a good way to develop interests, expand knowledge, and improve the vocabulary and reading comprehension skills needed for college and the SAT or ACT. Encourage your child to read all kinds of books for funfiction and non-fiction. The school library and the local public library are good sources of books, magazines, and newspapers.

Creating a Good Place to Study Your child needs a quiet and comfortable place to study. Here are a few things that you can do: (1) Help him or her find a quiet place with some privacy. (2) Set up a desk or large table with good light and place reference books such as a dictionary on the desk or nearby. (3) Make sure your child studies there on a regular basis.

Extracurricular Activities

Many school, community, and religious organizations enable high school students to explore their interests and talents by providing activities outside the classroom. Colleges are often interested in a student's extracurricular activities such as school clubs, the student newspaper, athletics, musical activities, and arts and drama, especially if a student has excelled in one or more of these areas.

Work Experience and Community Service

Work experience-paid or volunteer-can teach students discipline, responsibility, reliability, teamwork, and other skills. A summer job may be a good way to gain experience and earn money for college as well. If your child works during the school year, he or she should not work so many hours that the job interferes with school work.

Some students also participate in community service activities such as tutoring elementary school children or volunteering in a local hospital. Such activities make valuable contributions to society and also help students to identify their career interests and goals, gain workplace skills, and apply classroom learning to real-world problem solving. Many colleges also view community service as a valuable experience that enhances a student's college application.

Some schools offer academic credit for volunteer work through service-learning. This is a teaching method that integrates hands-on learning (through service to the community) into the school curriculum. To find out if your child's school offers service-learning, talk to your child's teacher, guidance counselor, or school principal. For information on how to start a service-learning program, contact the Learn and Serve America Clearinghouse at 1-800-808-SERVE.

How can my child go about choosing a college?

Colleges are located in big cities, suburbs, and small towns throughout the country. Some enroll tens of thousands of students; others enroll only a few hundred. Some are public; others are private. Some private institutions are affiliated with religious institutions; others are not. Some schools enroll only women, others only men.

The type of institution best suited to your child depends on his or her individual needs and talents. Your child can begin focusing on the choice of a college by considering the following questions:

• Why do I want to go to college?
• What do I hope to achieve in college?
• Do I have some idea of what I want to study or for which job I want to prepare?
• Do I want to live at home or go away to school?
• Do I prefer an urban, suburban, or rural environment?
• Would I be happier in a small college or at a large university?

In order to choose a college, you and your child should ask the following questions about the nature and quality of the schools in which your child has an interest. You may also find answers to these questions in the colleges' catalogs or in reference books on colleges. Ask these questions when you meet staff in the admissions office of the colleges.

The Nature of the Education Offered

What is the philosophy of the particular college, and what kinds of educational programs does this college offer?
Ask about the college's specialties, which types of classes the school offers, and in which fields students can earn a degree or certificate. How many students study in each area, and what do they do when they graduate?

How long does it take to earn a certificate or degree at this college?
Students should know how much time it takes to complete a program before they enroll in it. Programs can last anywhere from a few months to several years. Also ask whether the program requires full- or part-time attendance.

What do students do when they graduate from this school? Do they get jobs in the areas for which they were trained? Do they pursue further education?
Job placement rates are particularly important for vocational programs. If a low percentage of students are employed in their area of training a year after completing the program, there may be a problem. It can also be useful to ask about beginning salaries of program graduates and the institution's career advising and placement services for its students.

Students who enroll in two-year colleges with plans to transfer to four-year colleges should inquire about the possibility of doing so and about the number of graduates who transfer each year. Students applying to four-year colleges may want to know how many graduates go on to graduate or professional education.

The Quality of the College

How many students who start at this school earn a certificate or degree? How many drop out?
A high drop-out rate may suggest that students are dissatisfied with the education an institution provides. Be particularly careful about having your child enroll in a school that graduate's a low percentage of its students. Also ask about tuition refund policies for students who drop out in the first weeks of an educational program.

What is the loan default rate at this college? Do students repay their student loans?
The default rate is the percentage of students who took out student loans to help pay their expenses but did not repay them properly. A high default rate may suggest that students who borrowed never completed their educational program or that they were unable to find jobs and repay the loans when they graduated. Colleges with consistently high default rates may be barred from student loan programs, and students attending these institutions may thus be ineligible for federal loans.

Have other students who have gone to this college liked it? What has their experience been?
Colleges should be able to refer you to current students or recent graduates of their programs. These individuals can give you their opinion about classes, facilities, the faculty (teachers), and the skills they have learned.

What kinds of facilities does this college have? Are they adequate for my child's needs?
You and your child should consider the condition of classrooms, libraries, and dormitories when choosing a college. The types of facilities appropriate for a college depend on the type of education provided. For example, a college offering classes in the sciences should have modern laboratories, and an institution that offers computer education classes should have adequate computer facilities.

Admissions Requirements and Financial Aid

What admissions requirements does this college have?
Each institution can require students to take certain high school classes and submit certain items with their applications. Make sure you know what is required by the schools that interest your child.

Is this college accredited by an agency recognized by the secretary of education and eligible to participate in federal student aid programs?
Federal financial aid is available only to students attending eligible institutions. Students attending other institutions cannot receive Federal financial aid. If you are interested in having your child apply for federal financial aid, be wary of unaccredited institutions and those with high default rates. You can call the Federal Student Financial Aid Information Center toll free to find out if a particular college is an eligible institution. The number is 1-800-4FED-AID.

EXERCISE

College Inquiries Using the form below, help your child list the colleges he or she knows about and might be interested in attending. Write down whether they are two-year or four-year colleges or universities. Ask your child why these schools are appealing to him or her. You and your child may want to contact the colleges to get more information.

 

College Inquiries
College	Address,Location	Two-Year or Four Year	Why Appealing?	Date, Names, and Phone Numbers	Date Information Received

How much does a college education cost?

Many adults overestimate the cost of college or believe that all schools are expensive. For example, a 1996 survey found that members of the public over estimated the tuition of both public two- and four-year colleges by two to three times the actual average tuition, a mistake of more than $3,000.

Although some colleges are expensive, costs vary from institution to institution. In addition, the availability of financial aid-money available from various sources to help students pay for college-can make even an expensive college affordable for a qualified student.

College Costs

The basic costs of college are tuition, fees, and other expenses:

• Tuition

Tuition is the amount of money that colleges charge for instruction and for the use of some facilities, such as libraries. Tuition can range from a few hundred dollars per year to more than $30,000. The least costly option for postsecondary education is typically a local community college where the average tuition and fees are under $1,700 per year. There are also many four-year colleges and universities that are relatively inexpensive. For example, a little more than half of the students who attend four-year colleges go to institutions that charge less than $4,000 in tuition and fees. This occurs because about 66 percent of the students who attend four-year colleges attend public institutions which have lower tuition rates than those of private institutions.

• Fees

Fees are charges (usually small) that cover costs generally not associated with the student's course load, such as costs of some athletic activities, student activities, clubs, and special events.

• Other Expenses

Besides tuition and fees, students at many colleges and universities pay for room, board, books, supplies, transportation, and other miscellaneous costs. "Room and board" refers to the cost of housing and food. Typical college costs are listed in Chart 5.

Public Institutions

Over three-quarters of all students in two- and four-year colleges attend state or other public colleges. Because these schools receive a large proportion of their budgets from state or local government, they can charge students who live in that state (in-state students) relatively low tuition rates. Students from other states (out-of-state students) usually pay higher tuition rates.

In 1998-99, in-state students attending public four-year colleges faced average tuition and fees of $3,243 per year. Resident students at public two-year colleges faced average tuition and fees of $1,633 per year in 1998-99. Tuition and fees for out-of-state students at four-year public institutions averaged $8,417 and $4,508 at twoyear public institutions.

When the costs of room, board, books, supplies, transportation, and other personal expenses are added to tuition and fees, the average in-state total cost of attending a public four-year college was $10,458 in 1998-99. Since many students who attend two-year public schools live at home, the average total cost of attending a twoyear public college in 1998-99 was $6,445. This includes the cost of tuition, fees, books, supplies, transportation, and other personal expenses for a commuting student.

Private Institutions

Private (sometimes called "independent") institutions charge the same tuition for both in-state and out-of-state students. Private college tuitions tend to be higher than those of public colleges because private schools receive less financial support from states and local governments.

Most private colleges are "non-profit," Other private postsecondary schoolsmostly vocational and trade schools--are "proprietary." Such institutions are legally permitted to make a profit. Students at private colleges in 1998-99 faced an average tuition and fees of $14,508 per year at fouryear colleges and $7,333 per year at two-year non-profit colleges.

CHART 5

Typical College Costs Tuition Books Fees Supplies Room Transportation Board Miscellaneous Expenses

When the costs of room, board, books, supplies, transportation, and other personal expenses are added to tuition and fees, the average total cost of attending a private fouryear college was $22,533. If these same kinds of costs are added to the tuition and fees of a twoyear private college, the average total cost of attending such a school was $14,222.

Future College Costs

By the time your child is ready to attend college, the tuition, fees, and costs of room, board, and other expenses will be larger than the amounts discussed in this handbook. Because there are many factors that affect the costs of a college education, it is impossible to know exactlyhow much colleges will charge when your child is ready to enroll. Be cautious when people tell you a particular amount; no one can be sure how much costs will change over time. In addition, as college costs increase, the amount of money you earn, and thus the amount you will have available to pay for college, will also rise.

How can I afford to send my child to college?

Saving money in advance and obtaining financial aid are common ways for parents to make their child's education affordable. Other ways of making college affordable, such as attending college part time, will be discussed later in this handbook.

Saving Money

Saving money is the primary way to prepare for the costs of college. Setting aside a certain amount every month or each payday will help build up a fund for college. If you and your child begin saving early, the amount you have to set aside each month will be smaller.

In order to set up a savings schedule, you'll need to think about where your child might attend college, how much that type of college might cost, and how much you can afford to save. Keep in mind that colleges of the same type have a range of costs and your child may be able to attend one that is less expensive. You can also pay part of the costs from your earnings while your child is attending school. In addition, your child may also be able to meet some of the costs of college by working during the school year or during the summer. Finally, some federal, state, or other student financial aid may be available, including loans to you and to your child.

You will also want to think about what kind of savings instrument to use or what kind of investment to make. By putting your money in some kind of savings instrument or investment, you can set aside small amounts of money regularly and the money will earn interest or dividends. Interest refers to the amount that your money earns when it is kept in a savings instrument. Dividends are payments of part of a company's earnings to people who hold stock in the company.

A savings instrument has an "interest rate" associated with it; this refers to the rate at which the money in the instrument increases during a certain period of time. Principal refers to the face value or the amount of money you place in the savings instrument on which the interest is earned.

Every type of savings or investment has some risk that the return will be less than needed or expected. Federally insured savings accounts are safe and guaran teed up to $100,000 by the U.S. Government. However, they may have lower interest rates, making it harder to save large amounts of money for college. Bonds and stocks often have higher returns than savings accounts or EE savings bonds but are riskier. You can reduce the risks of these kinds of investments by starting to save early. The earlier you begin the less money you will have to put aside each month and the more total savings you will accumulate. You should talk with your banker or other financial professional about different savings and investment choices. You might also talk with a friend or relative who understands these choices. You can also learn about them by reading some of the magazines that have articles on saving for college.

Chart 7 shows how much you would need to save each month in order to have $10,000 available when your child begins college.

The chart assumes that you are getting a return of 5 percent on your savings. If you are able to earn more than that, your total savings will be higher. As the chart shows, if you start saving when your child is born, you will have 18 years of accumulated savings by the time your child enters college. You would only have to save or invest about $29 each month in an account earning 5 percent in order to have $10,000 at the end of 18 years. If you wait until your child is 12, you will have to set aside $119 a month. By waiting too long to begin saving, you may not be able to afford the amount of monthly savings needed to reach your goals.

CHART 7
Amount You Would Need to Save to Have $10,000 Available When Your Child Begins College
Amount Available When Child Begins College
If you start saving when your child is	Number of years of saving	Approximate monthly savings	Principal	Interest earned	Total savings
(Assuming a 5 percent interest rate.)
Newborn	18	$29	$6,197	$3,803	$10,000
Age 4	14	41	6,935	3,065	10,000
Age 8	10	64	7,736	2,264	10,000
Age 12	6	119	8,601	1,399	10,000
Age 16	2	397	9,531	469	10,000

When deciding which type of savings or investment is right for you and your family, you should consider four features:

- Risk: The danger that the money you set aside could be worth less in the future.

- Return: The amount of money you earn on the savings instrument or investment through interest or dividends.

- Liquidity: How quickly you can gain

- Time Frame: The number of years you will need to save or invest.

When you select one or more savings or investments, you should balance these factors by minimizing the risk while maximizing the return on your money. You will also want to be sure that you will be able to access the money at the time you need to pay for your child's education.

If you start early enough, you may feel confident about making some long-term investments. Some investments are riskier than others but can help you earn more money over time. Chart 10 lists some of the major kinds of savings instruments and investments that you may want to use. You can get more information on these access to the money in the instrument or and other savings instruments at local banks and at your investment. neighborhood library.

Don't forget that you won't necessarily have to save for the entire cost of college. The following section tells about student financial aid for which you and your child might qualify and other ways to keep college costs down.

Financial Aid

Financial aid can help many families meet college costs. Every year millions of students apply for 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 to qualified students at the college level:

- Grants and Scholarships,
- Loans, and
- Work-Study.

• Grants and Scholarships

Grants and scholarships provide aid that does not have to be repaid. However, some require that recipients maintain certain grade levels or take certain courses.

• Loans

Loans are another type of financial aid and are available to both students and parents. Like a car loan or a mortgage for a house, an education loan 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 the following kinds of questions:

- What are the exact provisions of the loan?

- What is the interest rate?

- Exactly how much has to be paid in interest?

- What will the monthly payments be?

- When will the monthly payments begin?

- How long will the monthly payments last?

- What happens if you miss one of the monthly payments?

- Is there a grace period for paying back the loan?

In all cases, a loan taken to pay for a college education must be repaid, whether or not a student finishes school or gets a job after graduation. Failure to repay a student loan can ruin a student or parent's credit rating. This is an important reason to consider a college's graduation and job placement rates when you help your child choose a school.

• Work-Study Programs

Many students work during the summer or parttime during the school year to help pay for college. Although many obtain jobs on their own, many colleges also offer work-study programs to their students. A work-study 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.

The types of financial aid discussed above can be merit-based, need-based, or a combination of merit-based and need-based.

• Merit-Based Financial Aid

Merit-based assistance, usually in the form of scholarships or grants, is given to students who meet requirements not related to financial needs. For example, 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 Financial Aid

Need-based aid means that the amount of aid a student can receive depends on the cost of the college and on his or her family's ability to pay these costs. Most financial aid is need-based and is available to qualified students.

What are the most common sources of financial aid?

Student financial aid is available from a number of sources, including the federal government, state governments, colleges and universities, and other organiza tions. Students can receive aid from more than one source.

• Federal Financial Assistance

The federal government supplies the largest amount of all student aid, about 75 percent or $35 billion annually. The largest and most popular federal student aid programs are:

- Federal Pell Grants

These are need-based grants that were given to just under 3.8 million students for school year 1998-99. In school year 1998-99, the maximum Pell Grant was $3,000.

- Federal Direct and FFEL Stafford Loans

Direct and FFEL Stafford Loans are the federal government's major form of self-help aid. Direct Stafford Loans are available through the William D. Ford Direct Loan (Direct Loan) Program and FFEL Stafford Loans are available through the Federal Family Education Loan (FFEL) Program. In 199899, approximately 5.4 million students received FFEL Stafford Loans and about 3 million received Direct Stafford Loans.

The terms and conditions of a Direct Stafford or a FFEL Stafford are similar. The major differences between the two are the source of the loan funds, some aspects of the application process, and the available repayment plans. Under the Direct Loan Program, the funds for your loan are lent to you directly by the U.S. government. If your school does not participate in the Direct Loan Program, the funds for your loan are lent to you from a bank, credit union, or other lender that participates in the FFEL program.

The Direct and FFEL programs also offer PLUS Loans for parents of dependent students and Consolidation Loans. Direct and FFEL Stafford Loans are either subsidized or unsubsidized. A subsidized loan is awarded on the basis of financial need. With this type of loan, borrowers are not charged any interest before they begin repayment or during authorized periods of deferment. The federal government "subsidizes" the interest during these periods.

An unsubsidized loan is not awarded on the basis of need. You'll be charged interest from the time the loan is disbursed until it is paid in full. If you allow the interest to accumulate, it will be capitalizedthat is, the interest will be added to the principal amount of your loan and additional interest will be based upon the higher amount. This will increase the amount of money you have to repay. If you choose to pay the interest as it accumulates, you'll repay less in the long run.

You can receive a subsidized loan and an unsubsidized loan for the same enrollment period.

If you're a regular student enrolled in an eligible program of study at least half time, you may receive a Direct or FFEL Stafford Loan. You must also meet other general eligibility requirements.

If you're a dependent undergraduate student you can borrow up to:

• $2,625 if you're a first-year student enrolled in a program of study that is at least a full academic year.
• $3,500 if you've completed your first year of study and the remainder of your program is at least a full academic year.
• $5,500 a year if you've completed two years of study and the remainder of your program is at least a full academic year.

If you're an independent undergraduate student or a dependent student whose parents are unable to get a PLUS Loan, you can borrow up to

• $6,625 if you're a first-year student enrolled in a program of study that is at least a full academic year (only $2,625 of this amount may be in subsidized loans).
• $7,500 if you've completed your first year of study and the remainder of your program is at least a full academic year (only $3,500 of this amount may be in subsidized loans).
• $10,500 a year if you've completed two years of study and the remainder of your program is at least a full academic year (only $5,500 of this amount may be in subsidized loans).

For periods of study that are less than an academic year, the amounts you can borrow will be less than those just listed. Talk to your financial aid administrator to find out how much you can borrow.

For a Direct Loan the U.S. Department of Education will pay you through your school. For a FFEL Stafford Loan, the lender will send the loan funds to your school. In most cases, your loan will be disbursed in at least two installments; no installment can be greater than half the amount of your loan.

- Federal Campus-Based Programs

The federal government provides money to colleges to give to needy students through three federal campus-based programs. These three programs include (1) a grant program (Federal Supplemental Educational Opportunity Grants, or SEOGs), (2) a loan program (Federal Perkins Loans), and (3) the Federal Work-Study Program.

• More Information on Federal Aid

Students can get aid from more than one federal program. For the most up-to-date information about student aid supplied by the federal government, call the Federal Student Financial Aid Information Center toll free at the U.S. Department ofEducation at l-800-4FED-AID. You can also obtain a guide to federal financial aid for students, called The Student Guide, which provides an extensive and annually updated discussion of all federal student aid programs. You can obtain the Guide by writing to the following address:

Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044

Or call: 1-800-4FED-AID.

• State Financial Assistance

States generally give financial support to public colleges and universities. This support lowers tuition for all students attending these schools. Some states also offer financial assistance directly to individual students, which can be need-based or merit-based. To find out about state aid where you live, call or write your state's higher education agency. The phone numbers and addresses of all of these agencies are listed in the last section of this handbook.

• College or University Assistance

Colleges themselves provide aid to many of their students. Most of this institutional aid is in the form of scholarships or grants. Some is need-based and some is merit-based.

When your child wants financial aid information about specific schools, he or she should contact the financial aid offices of these schools and request information.

• Other Types of Assistance

Other organizations, such as corporations, labor unions, professional associations, religious organizations, and credit unions, sometimes award financial aid. You can find out about the availability of such scholarships by contacting someone from the organization or by contacting its headquarters.

In addition, some organizations, particularly foundations, offer scholarships to minorities, women, and disabled students. To learn more about such scholarships, go to the nearest public library with a good reference section and look for directories that list such scholarships. (The names of a few books that list scholarships appear in the last section of this guide.) College admissions offices and high school guidance counselors should also be able to provide more information about scholarships.

• Help in Getting More Information

The guidance counselors at your child's high school should be able to provide information on when and how to apply for federal, state, and other types of aid. If they cannot give you this information, try a local college. Even if your child doesn't plan to attend that particular institution, financial aid officers there should have information on federal financial aid. Many colleges can also tell you about state aid and their own institutional aid.

Is my child eligible for financial aid? If so, how much?

To qualify for federal aid, you or your child must submit a financial aid application. Applications for financial aid request information about your family's income, savings, and assets, as well as information on the number of children in the family who are in college. You can get a copy of the federal financial aid form by calling the toll free number that was mentioned earlier:

1-800-4FED-AID. You may also fill out this form via the World Wide Web. Visit the Department's web site at: www.ed.gov and click on Student Financial Assistance.

To apply for other aid in addition to federal aid, you may need additional forms. High school guidance counselors can tell you more about applying for financial aid, including where to get forms you might need for state aid.

From information you report on the financial aid forms, your expected family contribution (EFC) is calculated. The EFC is the amount of money a student and his or her family are expected to contribute to the costs of attending college. Using the EFC and other information that you provide, each college to which you apply will determine your financial need. Financial need equals the cost of education minus the EFC and represents the maximum amount of need-based aid the student can receive. In addition, students can borrow money to cover the EFC. Because financial aid determinations consider both financial need and education costs, you should not rule out a school because you think it costs too much. In fact, with financial aid it may cost no more to attend an expensive institution than a cheaper one. Chart 8 below summarizes the calculation that is performed to determine financial need.

CHART 8
How Much Need-based Financial Aid Can My Child Get?
The amount of need-based financial aid a student qualifies for depends on his or her financial need. Financial need is equal to the cost of education (estimated costs for college attendance and basic living expenses) minus the expected family contribution (the amount a student's family is expected to pay, which varies according to the family's financial resources).
Cost of Education		Expected Family Contribution		Financial Need
Includes costs of Tuition Fees Room Board Books Supplies Transportation	-	Based on the financial resources of a student and his or her family	=	Students can receive up to this amount of needbased financial aid, such as Pell Grants and Stafford Loans.

To give you a better idea of how you can finance your child's college education, examples of two college students' financial aid packages are shown below.

Note that these financial aid packages are just examples of the kinds of packages that students with these profiles might receive if they attended the schools described below.

PROFILE 1-FIRST STUDENT
Family income: $20,000 Household size: 4 Number in college: 1
	2-year public	4-year public	4-year private
College Cost	$6,400	$10,500	$22,500
Expected Family Contribution	$0	$0	$0
Parent	$0	$0	$0
Student	$0	$0	$0
Pell Grant	$3,000	$3,000	$3,000
SEOG	$500	$800	$1,000
Federal Work Study	$1,300	$1,300	$1,300
Perkins Loan	$0	$0	$1,500
Stafford Loan	$0	$2,625	$1,500
State Grant	$1,100	$1,600	$1,600
Institutional Grant	$500	$1,175	$11,475
Parent Loan	$0	$0	$0

 

 

PROFILE 2-SECOND STUDENT
Family income: $40,000 Household size: 4 Number in college: 2 Student savings: $715
	2-year public	4-year public	4-year private
College Cost	$6,400	$10,500	$22,500
Expected Family Contribution	$1,727	$1,727	$1,727
Parent	$1,477	$1,477	$1,477
Student	$250	$250	$250
Pell Grant	$1,273	$1,273	$1,273
SEOG	$0	$0	$1,000
Federal Work Study	$0	$1,300	$1,300
Perkins Loan	$0	$1,500	$1,500
Stafford Loan	$1,300	$2,625	$2,625
State Grant	$1,100	$1,200	$1,600
Institutional Grant	$1,000	$875	$6,475
Parent Loan	$0	$0	$5,000

Tax credits, deductions, and deferrals

In addition to any student aid awarded to a student, families may be eligible for tax credits, tax deductions, or tax breaks on savings plans. These are not the same as student aid but may make college education more affordable by reducing the amount of taxes that would otherwise be owed.

Tax credits directly reduce the amount of taxes owed to the federal government. There are two types of tax credit programs. The first is called the Hope Schol arship and can provide up to $1,500 for a child's first and second years of college. The second is called the Lifetime Learning tax credit and can provide as much as $1,000 a year after the first two years of college. The actual amount of the credit depends on the amount of college expenses and on parent or student income. Parents can take the tax credit if they claim the student as an exemption on their return. The student can take the tax credit if he files a separate return and claims himself as an exemption.

When deciding about student loans, students should also remember that some of the annual interest payments may be deductible on their tax returns during the first five years of loan repayment.

The federal government also encourages families to save in advance for their education by allowing taxes to be deferred or forgiven on accumulated earnings. One provision is the Education IRA or individual retirement account. This allows total contributions of not more than $500 a year to the account of a child under 18. These contributions cannot be deducted from taxes. However, the taxes on the earnings in the account are deferred. If the withdrawals from the account are used for qualified higher education expenses, the student will not owe any tax on the accumulated earnings.

Certain states and agencies also have programs that allow people to buy credits or certificates or make contributions to accounts that can be used to pay higher education expenses. These programs are usually referred to as state tuition programs or pre-paid tuition programs. The contributions are not tax deductible but the earnings from the accounts are not taxed when used for higher education expenses.

Many families have used EE savings bonds as a way to accumulate funds for college. The interest on these bonds, if they were issued after 1989 and used to pay qualified college expenses, can be excluded from gross income on your tax return. This exclusion depends on the family's income and other financial aid and tax benefits that the student or parents may have received.

Eligibility for tax credits, deductions, and deferrals involves complex rules and calculations. You should seek the advice of someone who has experience with these provisions. You can also read IRS Publication 970, Tax Benefits for Higher Education.

Are there other ways to keep the cost of college down?

Serve in AmeriCorps

AmeriCorps is a domestic service organization in which thousands of young men and women are working in community service projects around the country in exchange for a living allowance averaging $7,500 per year; health care; child care when needed; and an education award of $4,725 per year for paying back a student loan or for financing post secondary education. Under some circumstances a person can serve parttime and receive an education award of $2,362 per year.

AmeriCorps projects serve communities throughout the country. All meet at least one of four national priorities: (1) education, (2) public safety, (3) human needs, and (4) the environment. For example, AmeriCorps members teach state-of-the-art computer skills to teenagers, tutor grade-school children in basic reading, or organize innovative after-school programs in some of the education projects. AmeriCorps members in environmental projects clean up urban streams and inland waterways, monitor dangerous trends in air quality, or test-start city-wide recycling programs.

There are many different points in a person's educational career when participation in AmeriCorps is an option: right after high school; during or after college; and during or after graduate school or occupational training. AmeriCorps members are recruited locally and nationally. To find out more about AmeriCorps, call the AmeriCorps Hotline free of charge at 1-800-94ACORPS (1-800-942-2677) or TDD 1-800-833-3722. You may also visit the AmeriCorps web site at: www.americorps.org.

Take Advanced Placement (AP) Courses and Exams in High School

As discussed in an earlier section of this guide, many high schools offer Advanced Placement (AP) courses and exams. AP courses are college-level courses that help students prepare for college-level work. After taking AP courses, students can take AP exams offered in the same subjects as the AP courses. If students score a grade of 3 or higher on an AP exam, they can often receive college credit. Students with high grades on AP exams in many different subjects are sometimes granted a full year of course credit at the colleges where they enroll. The receipt of course credit can result in savings in college costs. These savings can be quite large if it means that a student is able to enter into a college as a second-year student; such a student might save the cost of tuition, room, board, and fees for a whole year of college.

However, not all colleges and universities give college credit for a grade of 3 or higher on an AP exam. Contact your child's high school to find out if AP courses and exams are offered. Write to the admissions office of the colleges that are of interest to your child to find out if they give credit for an AP exam grade of 3 or higher.

Participate in a Career-Focused Educational Program such as "Tech-Prep" or "School-to-Career"

As discussed earlier in this guide, some high schools offer career-focused educational programs that provide students with a set of high school courses that are formally linked to courses offered at local community or technical colleges. These "tech-prep" or "school-tocareer" programs, as they are often called, offer students the opportunity to go through a sequence of career-focused courses in high school that prepares them for an apprenticeship program or for a specialized sequence of college courses in a particular occupational field. Thus, students who master certain technical and occupational skills and knowledge in high school do not need to repeat the same courses when they enter college or an apprenticeship.

In some of these programs, students who take the specialized sequence of courses in high school can sometimes be awarded college credit or advanced standing in the occupational program at the college level. This can save students time and money. It also means that students can gain access to more advanced college courses much earlier in their college careers. To find out if such careerfocused programs exist in your community, ask your child's guidance counselor or teacher, or staff at a local college.

Enroll in a Two-Year College; Then Transfer to a Four-Year College

Local community colleges are usually the least expensive. In addition to charging low tuition, usually it is possible to save money by having the student live at home and commute to campus.

After completing an associate's degree or certificate in a two-year college, students often can transfer to a four-year college and work toward a bachelor's degree.

If your child chooses this route, he or she needs to take courses in the two-year college that will count toward a bachelor's degree. Certain community college courses may not be transferable to a four-year institution. Community college admissions officers can explain transfer terms and opportunities.

Work Part Time

Some students choose to work part-time and attend college part-time. If your child wishes to do this, he or she should make sure that work, classes, and time for studying do not conflict. Some institutions offer programs that enable students to combine work and classes. Although going to school part-time is a good option for many students, it usually takes longer for part-time students to earn their degrees.

Take Advantage of Armed Forces Education Programs

The armed forces offer educational programs during or after active duty. If your child prefers to work toward a college degree immediately after high school, attending one of the military academies or attending a civilian school and enrolling in the Reserve Officers Training Corps (ROTC) program are options. If your child wants to join the armed forces before attending college full-time, he or she can attend college after military service by taking advantage of the Montgomery GI Bill or by obtaining college credit for some of the military training he or she will receive.

• Military Academies

Each branch of the military, with the exception of the Marine Corps, has its own academy-a fouryear college that offers a bachelor's degree and a commission in the military upon graduation. The military academies are highly competitive and are tuition-free to students who are admitted. The three main military academies are:

(1) U.S. Military Academy, located in West Point, N.Y.,

(2) U.S. Naval Academy, located in Annapolis, Md., and

(3) U.S. Air Force Academy, located in Colorado Springs, Colo.

• Other Academies

Two other academies operate on the same model as the military academies, with subsidized tuition in return for service. They are: (1) U.S. Coast Guard Academy, located in New London, Conn., and (2) U.S. Merchant Marine Academy, located in Kings Point, N.Y.

• ROTC

In the ROTC scholarship program, the military covers most of the cost of tuition, fees, and textbooks and also provides a monthly allowance. Scholarship recipients participate in summer training while in college and fulfill a service commitment after college.

• The Montgomery GI Bill

This bill provides financial support for people who wish to pursue a college education after serving in the military.

• Other Ways to Get a College Education in the Armed Forces

Most branches of the military offer some kind of tuition assistance program that enables members to take college courses at civilian colleges during their off-duty hours while on active duty. In addition, military training while on active duty can sometimes count toward college credit. All branches of the military offer training in various technical and vocational areas, and military enrollees can often obtain college credit for some of this training.

The National Guard and the Armed Forces Reserves offer the same kind of educational benefits as those available to people on Active Duty.

Local armed forces recruiting offices can provide detailed information about education opportunities through the military.

How do I set up a long-range plan?

Step by step, you can help your child make informed decisions about his or her education, do well academically, learn about colleges, and find the best possible opportunities for a college education.

Following are two checklists that are designed to help you and your child, year by year, progress toward preparing for college-both academically and financially. The first list speaks directly to your child, although he or she may need your help. The second list speaks directly to you.

CHECKLIST

College Preparation Checklist for Students

Pre-High School: Take challenging classes in English, mathematics, science, history, geography, the arts, and a foreign language. Develop strong study skills. Start thinking about which high school classes will best prepare you for college. If you have an opportunity to choose among high schools or among different programs within one high school, investigate the options and determine which ones will help you -further your academic and career interests and -open doors to many future options. Start saving for college if you haven't already. Investigate different ways to save money-buying a U.S. Savings Bond or opening a savings account in a bank, investing in mutual funds, etc. Find a mentor who will support your positive goals and help you with questions about plans for your future.

High School: 9TH GRADE Take challenging classes in English mathematics, science, history, geography, a foreign language, civics, economics, and the arts. Get to know your career counselor or guidance counselor, and other college resources available in your school. Talk to adults in a variety of professions to determine what they like and dislike about their jobs and what kind of education is needed for each kind of job. Continue to save for college.

10TH GRADE Take challenging classes in English, mathematics, science, history, geography, a foreign language, government, civics, economics, and the arts. Continue to talk to adults in a variety of professions to determine what they like and dislike about their jobs, and. what kind of education is needed for each kind of job. Become involved in school- or communitybased extracurricular (before or after school) activities that interest you and enable you to explore career interests. Meet with your career counselor or guidance counselor to discuss colleges and their requirements. Take the Preliminary Scholastic Assessment Test/National Merit Scholarship Qualifying Test (PSAT/NMSQT). You must register early. If you have difficulty paying the registration fee, see your guidance counselor about getting a fee waiver. Take advantage of opportunities to visit colleges and talk to students. Continue to save for college.

11TH GRADE Take challenging classes in English, mathematics, science, history, geography, a foreign language, government, civics, economics, and the arts. Meet with your career counselor or guidance counselor to discuss colleges and their requirements. Continue involvement in school- or community-based extracurricular activities. Decide which colleges most interest you. Write these schools to request information and an application for admission. Be sure to ask about special admissions requirements, financial aid, and deadlines. Talk to college representatives at college fairs. Take advantage of opportunities to visit colleges and talk to students. Consider people to ask for recommendations-teachers, counselors, employers, etc. Investigate the availability of financial aid from federal, state, local, and private sources. Call the Student Aid Hotline at the U.S. Department of Education (1-8004FED-AID) for a student guide to Federal financial aid. Talk to your guidance counselor for more information. If you are interested, learn more about AmeriCorps by calling 1-800-942-2677 or TDD 1-800-833-3722. Via the Internet, go to www.americorps.org. Investigate the availability of scholarships provided by organizations such as corporations, labor unions, professional associa tions, religious organizations, and credit unions. If applicable, go to the library and look for directories of scholarships for women, minorities, and disabled students. Register for and take the Scholastic Assessment Test (SAT), the ACT, SAT Subject Tests, or any other exams required for admission to the colleges you might want to attend. If you have difficulty paying the registration fee, see your guidance counselor about getting a fee waiver. Continue to save for college.

12TH GRADE Take challenging classes in English, mathematics, science, history, geography, a foreign language, government, civics, economics, the arts, and advanced technologies. Meet with your counselor early in the year to discuss your plans. Complete all necessary financial aid forms. Make sure that you fill out at least one form that can be used for Federal aid. Write colleges to request information and applications for admission. Be sure to ask about financial aid, admissions require ments, and deadlines. If possible, visit the colleges that most interest you. Register for and take the Scholastic Assessment Test (SAT), American College Test (ACT), SAT Subject Tests, or any other exams required for admission to the colleges to which you are applying. If you have difficulty paying the registration fee, see your guidance counselor about getting a fee waiver. Prepare your application carefully. Follow the instructions, and PAY CLOSE ATTENTION TO DEADLINES! Be sure to ask your counselor and teachers at least two weeks before your application deadlines to submit the necessary documents to colleges (your transcript, letters of recommendation, etc.).

 

 

CHECKLIST

Financial Preparation Checklist for Parents

PRE-HIGH SCHOOL: Start saving money for your child's college education. Investigate different ways to save money-buying U.S. Savings Bonds or opening a savings account in a bank, etc.

HIGH SCHOOL: 9TH GRADE Continue to save for college.

10TH GRADE Continue to save for college.

11TH GRADE Help your child investigate the availability of financial aid from federal, state, local, and private sources. Call the Student Aid Hotline at the U.S. Department of Education (1-800-4FED-AID) for a student guide to federal financial aid. Have your child talk to his or her guidance counselor for more information. Help your child investigate the availability of scholarships provided by organizations such as corporations, labor unions, professional associations, religious organizations, and credit unions. If applicable, go to the library with your son or daughter and look for directories on scholarships for women, minorities, and disabled students.

12TH GRADE Make sure your child completes all necessary financial aid forms, including the Free Application for Federal Student Aid (FAFSA) from the U.S. Department of Education. Call 1-800-4FED-AID; TDD 1-800-730-8913 or visit the FAFSA web site at: www.fafsa.ed.gov. Continue to save for college.

 

 

CHART 10
Examples of Savings Instruments and Investments
Type of Instrument	Definition	Risk	Return	Liquidity	Time Frame
SAVINGS INSTRUMENTS
Savings Account	Accounts at a bank, savings association, or credit union	Low risk because the federal government guarantees your money up to $100,000	The interest rate on most savings accounts tends to be relatively low.	High liquidity-you can withdraw your money at any time.	Good for shorter time periods-3 years or less.
Certificates of Deposit (CDs)	CDs are notes issued by banks that guarantee payment of a fixed interest rate until a future date (the maturity date).	Low risk because CDs of $100,000 or less are insured by the federal government.	Interest rates are generally higher than the rates for savings accounts but lower than the rates for longer term or riskier investments.	Relatively low--if you withdraw the money before the maturity date, you may pay a financial penalty.	Good for medium time frames-anywhere from 6 months to 5 years.
Money Market Accounts/ Money Market Mutual Funds	Money market accounts are savings accounts offered by banks, requiring a high minimum balance. Money market mutual funds are available from brokers, many banks, and directly by mail. The money that you deposit in these funds is invested in a wide variety of savings instruments.	Bank money market accounts have no risk on the first $100,000 because the government insures up to this amount. Money market mutual funds are not guaranteed by the government.	The interest rate for bank money market accounts is generally somewhat higher than for regular savings accounts. Rates on money market mutual funds are often somewhat higher than tor bank money market accounts.	High liquidity-you may withdraw your funds at any time. However, money market mutual funds do not have to send you a check for up to 3 days.	Money market instruments are best for short-term savings goals. However, because of their great safety and liquidity, many people keep a portion of their total college savings in these types of accounts.
U.S. Savings Bonds* *If you buy Series EE bonds to pay for your child's education, the money accumulated will be exempt from state and local taxes when you cash them in if the bonds are in the parent's name and if you are a single-income tax filer and your income is below $67,250 or a joint filer and your joint income is below $108,350. These amounts are adjusted annually for inflation. IRS publication 970 provides additional details.	U.S. (EE) savings bonds are promises by the U.S. Treasury to repay the owner with interest when the bond is redeemed. Bonds earn interest for as long as 30 years. Bonds earn market-based rates right from the start. They can be purchased from banks and through employer payroll deduction plans in amounts as little as o$50.	Savings bonds are completely risk-free since they are federal government obligations.	The interest rate on a savings bond is usually higher than rates on savings accounts or money market mutual funds. However, it the bonds are cashed in (redeemed) before 5 years, they may pay a lower rate of interest.	Savings bonds are highly liquid and can be cashed in at any bank in the U.S., not just the bank where you bought them.	Good for medium and longer term savings. Although they can be cashed in any time, the maximum interest is obtained by holding them longer.
INVESTMENTS
Mutual Funds	These funds can be invested in U.S. Government securities or in stocks and bonds. You can purchase a mutual fund through an investment firm, brokerage house, many banks, or directly from the mutual fund by mail.	Risk varies widely depending on the objectives and policies of the fund. Funds are not federally insured but your money is generally safer in a mutual fund than in a few individual common stocks because a mutual fund invests in many different stocks and bonds and thus spreads the risk over many different investments.	The return on a mutual fund depends on how the market performs and on whether the fund makes good investments.	Very liquid-you can sell the fund at any time. However, the amount of money you can get for the fund depends on the value, and the value changes regularly depending on conditions in the stuck and bond markets.	Good for longer term investing-5 years or more.
Individual Corporate Bonds or Stocks	A bond is a promise by a corporation to repay the face value of the bond, plus a fixed rate of interest, at a specific future date. Stock represents part ownership of a company. You make money on stocks either through the dividends you earn or by selling the stock at a price that is higher than the price for which you bought it. The prices of most stocks-and many bonds-are listed in major daily newspapers. Over longer periods, the price of the stock may increase or decrease. Stocks and bonds can be purchased from brokerage houses and through some banks.	The stocks and bonds of good companies can be quite safe over longer time periods. However, these investments are not guaranteed by the Federal Government or anyone else. Furthermore, there are many companies that are very risky for a person to invest in. An additional risk-even for good companies-is that prices of their stocks will fluctuate widely and that an investor will have to sell at a loss. This is risky for a parent who may need to sell the stock to pay for college tuition at a time when the price of the stock is relatively low.	Interest rates on bonds vary depending on the type of bond and its rating. Generally, returns are higher than on savings accounts, CDs, and U.S. Savings Bonds. The return on individual stocks can be very high depending on the dividends the company pays and the increase in the price of the stock. However, returns can also be low or negative if the price of the stock falls between the time you bought the stock and the time you sell it.	Most types of corporate and all types of government bonds are highly liquid. They can be sold through a broker on any weekday that markets are open. However, some bonds can only be sold when buyers make offers. Most individual stocks can be sold almost any day; however, there are some exceptions. With both stocks and bonds, you may have to wait for up to 3 days from the date of sale for the broker to send you the proceeds.	Short-term bonds are good for time periods of 1-3 years. All other bonds and common stocks should be considered as longer term investments, good for periods of 5-18 years.
U.S. Treasury Securities (Treasury Bills, Notes, or Bonds)	The Treasury Department and Federal agencies issue different types of fixedincome investments such as short-term bills (13-, 26-, and 52-week bills), medium-term notes (2-10 years), and long-term bonds (over 10 years). These securities can be purchased directly from regional Federal Reserve banks, through regular banks, and through brokers. Because there are relatively large minimum purchase amounts, some people prefer to invest instead in mutual funds that invest only in U.S. Government securities.	These securities have no risk since they are backed by the Federal Government.	Interest rates on government securities vary with the maturity of the issue. As with other fixed-income investments, short-term issues generally have lower interest rates than longer term issues. All government securities have interest rates that are lower than corporate securities with the same maturity because the government securities are considered safer.	Government securities are highly liquid and can be sold through brokers on any day the financial markets are open.	Government securities have a wide variety of maturities and can, therefore, be tailored to any time frame needed by families saving for college.
Education IRAs	A special type of IRA account that can only be used for higher education expenses. Parents, grandparents, or others can contribute up to $500 a year to any type of IRA-qualified savings or investment account. The account must be registered in the child's name. Only the child can use the money to pay for his or her higher education costs, or those of a sibling.	These accounts have a wide range of risks since they can be invested in many kinds of savings and investment vehicles. These include CDs, money market funds, savings bonds, mutual funds, and individual stocks and bonds.	Returns (as well as risks) will usually vary depending on