By Jill Schlesinger
Tribune Content Agency
As the college acceptance letters arrive, students are thrilled. However, while parents and grandparents are proud, they may also feel a little anxious about footing the bill for what they know is an important credential in today's labor force. Before you sign on a dotted line, or heaven-forbid, raid your retirement account or borrow against your house, it's time for a financial reality check.
Here are the basic sources available to fund higher education, according to the Common Application, a not-for-profit member organization of more than 700 colleges and universities in the United States and around the world.
-Federal government: The Department of Education awards about $150 billion a year to more than 15 million students in the form of federal grants, student loans, and work-study programs.
-State government: Your home state offers various types of financial aid. You might be eligible, even if you're not eligible for federal aid.
-Colleges and universities: Many colleges and universities provide financial aid and scholarships from their own endowment funds. There may be opportunities for a particular field of study, so be sure to check in with the various institutions where your child has been accepted.
-Financial aid: You have probably completed the FAFSA (Free Application for Federal Student Aid), but in case you have not done so, get cracking. According to NextGenVest.com, a company that helps students manage the college selection and financial aid process, "approximately $2.7 Billion is left unclaimed in federal aid by students who don't fill out the FAFSA."
-Scholarships: Individual colleges, as well as private funders, award scholarships in recognition of academic performance, athletic excellence, a commitment to community service, or other unique talents.
-Savings: Coverdell Education Savings accounts, 529 plans, UTMA/UGMA, savings bonds, investment accounts ... the list goes on. If you were fortunate enough to be able to sock away money for your child or grandchild, it's time to milk the cow!
With your college financial offer in hand, do not assume that it is set in stone. If your family finances have changed since completing the FAFSA forms, perhaps due to a job loss, high medical expenses or caring for an elderly parent, you can appeal to get a better package. Be sure to gather the supporting documentation necessary to prove that the changes have occurred.
Jill Schlesinger, CFP, is a senior business analyst for CBS News and the Senior CFP Board Ambassador for the Certified Financial Planner Board of Standards, Inc. Contact her at askjill@JillonMoney.com.