Your Options for Federal Tuition Assistance and Financial Aid

College is expensive -- very expensive. Tuition rates in the United States have been handily outstripping inflation in year-over-year growth for over 30 years now. Did you know that a year's tuition at Harvard cost a little under $5000 in 1977? For the 2008-2009 school year, that bill would now run you or your parents $31,456 for tuition alone! Chances are you're going to need some form of financial assistance to help pay for your schooling -- it's either that, or expecting mom and dad to live in penury for the next 10 years, or taking several years off to work and save up for school while your peers pass you by. Financial aid can come from many sources, and we've outlined a few below. However, we recommend you start pursuing federal aid first. The funds available are generous and imminently attainable with a little diligence on your part.

Government Loans
The first step is to find out if you qualify, and the good news is that nearly everyone qualifies for some form of federal assistance. Are you or your parents still well off? You 'll still probably qualify for something like a Stafford Loan. The beauty of a government-backed student loan is that the interest rates are below the market rates you could find at a bank, and the repayment terms for these loans are much more lenient and flexible. Often you won't have to begin paying your federal student loan immediately, but can wait to finish school. Generous repayment schedules are also available, allowing you to stretch your repayment cycle and allow yourself to gain experience and earning power before servicing your debt as heavily as you'd be required to by a bank or credit union.

Government Grants
If your parents are less well off, you could qualify for federal grant assistance. These grants do not require repayment, so you're looking at free money for your education. You may qualify for federal grants if your parents can't afford to pay for your education themselves or they have no assets to sell off that could finance your schooling. If your situation sounds similar to this, you'll want to get in touch with your high school counselor and talk to him/her about filing your FAFSA (Free Application for Federal Student Aid.)

Student Loans From Banks, Credit Unions, Or Your College
As a temporary solution for pressing financial needs like room, board, and fees, these types of loans can be a decent solution -- especially if you have the resources to pay them off quickly. Keep in mind these loans will charge a higher rate of interest than government loans and the repayment schedule will be immediate and unrelenting. Federal student loans usually offer some kind of relief if you can't make the minimum monthly payments, but with regular bank loans you'll have no such luck. Utilize non federal aid only if you don't qualify for government assistance. And if you're going to use it, be sure to plan carefully and be sensible about the amount of debt you can afford to incur.

Scholarships and Merit Awards
Obviously, the more scholarship funds you can secure, the better. But keep in mind that merit awards and scholarships are not likely to cover the full cost of your education. Also, there is usually no guarantee you'll continue to receive the funds throughout your entire education. You could fail -- for whatever reason -- to meet academic or athletic requirements necessary to keep the funds flowing. There have even been cases where scholarship funds were mismanaged, leaving deserving students out in the financial cold.