Last Minute Tips for Finding College Cash

Appealing for more financial aid and cutting back on expenses can make college more affordable.

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"My daughter is a senior. We financed her first two years using the Parent PLUS Loan, and she took a Sallie Mae private loan out for her third year, with us the cosigners. Well, this year, we do not qualify as a cosigner for this loan again. Neither my parents or my wife's, our brothers or sisters qualify as cosigners either because they are retired and living on Social Security, or have job loss problems or large debt. We are searching for some kind of financing that she can qualify for. She is unemployed but is still looking. Do you have any other options, suggestions?"

 —Matt F., "Aging Parent," 8/10/09 Lots of students and parents like Matt are panicking right now because they simply don't have enough money to cover the college bills that are about to come due.

While the recession has made it harder to find jobs to raise extra cash and has reduced some scholarship programs, financial aid advisers and experienced college parents say there are a few quick options that might help families score some extra bucks.

Apply or appeal: Filling out the Free Application for Federal Student Aid is the first step to getting most aid. It's not too late to fill out the form and qualify for aid for this coming academic year. Those who've filled it out but haven't gotten enough aid can appeal to their college's financial aid office and explain why they need more. Christopher Penn, founder and host of the Financial Aid Podcast, says appealers will have more success if they can prove that they need aid for one of three reasons: the student's cost of attendance is higher than the college figured, perhaps because of expenses like child care or unusual transportation needs; loss of income because a student or parent has lost a job or had to take a pay cut; or special circumstances, such as a recent divorce or medical emergency.

Students can also apply for private scholarships through local charities and organizations. And while it may be a little embarrassing to send out appeals for aid to everyone you know—church members, relatives, friends, coworkers, etc. That worked for Jackie Steffen, a recently divorced and foreclosed-on mom. Her mother's accountant provided a tip on a foundation scholarship that's helping Jackie's daughter, Rhiannon, pay for an expensive private college.

Borrow: Dropping out of college is generally more costly, over the long run, than taking on a reasonable amount of student loans. So students desperate for cash should consider maxing out on their federal Stafford student loans. Students can borrow from $5,500 to $12,500, depending on their year and age. Although borrowing lots of money is scary, the new Income Based Repayment Plan will cap graduates' payments below 15 percent of their income.

If the basic Stafford isn't enough, students can ask parents to apply through the college for a federally backed PLUS loan. If the parents are rejected for credit reasons, schools can then award the students an extra $4,000 or so in Stafford loans. If the parents receive a PLUS loan but want the student to be responsible for the payments, they can execute contracts through Virgin Money or Graduate Leverage requiring that.

Cut: During a recession, especially, it is often easier to cut expenses rather than scrape together extra cash. Financial aid officers say students with cars would often be much better off if they sold the cars and used the savings on gas, parking, insurance, and car loan payments to pay for tuition and books. Many colleges also offer dorm discounts to students who are willing to live in triple rooms, serve as resident assistants or do chores. Of course, living at home, or with relatives, is cheapest of all. Students also can seek out cheaper textbooks and other college supplies. They can try to test out of courses or take cheaper credits online or from local community colleges to speed graduation. Many students are saving thousands of dollars by transferring from expensive colleges to cheaper in-state public universities.

Delay: Since many students and parents have difficulty scraping together the full cost of college up front, most colleges have plans that allow them to pay through regular payments. Some colleges do charge a $50 fee for this service.

Work: Unemployment is high, but many colleges are getting extra funding for work-study jobs. Financial aid advisers say the pay from a 10- to 15-hour-a-week job should be enough to cover a frugal student's expenses for entertainment and extras during the school year. Students can also consider part-time military programs, such as the National Guard, that offer pay and educational benefits. Those who just can't scrape together enough money this year can take a leave and either work in the private sector or try for an AmeriCorps job that offers a small living stipend and a tuition voucher worth $4,725 upon completion.

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