Money Questions


Financial experts answer common questions about college finances.

With the rising costs of college tuition, many parents and students worry: Where's all this money going to come from? To find the answer, Christian College Life asked financial aid experts Mike Davis of Judson College, Elgin, Illinois; Lydia Thompson of Grace University, Omaha, Nebraska; and Don Zackary of Texas's Dallas Baptist University.

How do I begin applying for financial aid?

Mr. Davis: The first step is to file the Free Application for Federal Student Aid (FAFSA). This free application allows schools to award students the financial aid they are eligible for.

When should I begin applying for financial aid?

Mr. Davis: Start looking as early as possible and be aware of deadlines. You can submit the FAFSA in January of the year you'll be attending college.

Ms. Thompson: Scholarship and grant research should begin in your junior year of high school or sooner. You should especially become informed of application deadlines and eligibility requirements. Applications for these awards are generally completed beginning the summer or fall of the senior year.

How do I compare financial aid packages from different schools?

Ms. Thompson: Always look at the "bottom line." That is, what will your total costs be to go to that school when all is said and done? Here's an example: College A costs $20,000 per year, and offers you a $5,000 gift aid package. College B costs $28,000 per year and offers a $10,000 gift aid package. College A is the better bargain even though the awards from B are twice as large as the awards from A.

What is available in scholarships and grants?

Mr. Davis: There are private scholarships and state grants. Most scholarships come from state and federal funds. Some schools have institutional scholarships available, and most of those are based on merit. You can also receive scholarships based on your background, school activities and hobbies or other interests. The website fastweb.com allows you to register and include personal information so they can find scholarships fitting your unique profile from their database.

Mr. Zackary: While some scholarships are aimed at specific majors or backgrounds, many general scholarships are available for students who haven't declared a major. Also, you are still eligible for scholarships based upon your past accomplishments.

How much should I take out in loans?

Ms. Thompson: Get information about what you can reasonably expect to earn when you graduate and enter your chosen vocation. Ask yourself: Based on my expected income, how much loan debt will I be able to reasonably pay back? The rule of thumb is that your monthly loan payment should not exceed eight percent of your monthly income.

What exactly should I look for in a loan?

Ms. Thompson: The Federal Stafford Subsidized and the Federal Stafford Unsubsidized loans are the most desirable because they are low interest loans. You aren't required to make payments while still in school and you're not penalized for early repayment. The Federal Department of Education pays the interest on the subsidized loan while you're enrolled in school at least half-time.

If you look at a non-federal loan, try to find any of the characteristics of the Stafford loans. Be aware: Loans from private lenders will usually have higher interest rates and may have higher fees than federal loans, both when you get the loan and while you are repaying it.

How much money should I budget for books and spending cash?

Ms. Thompson: For two semesters, Grace University estimates $800 for books and supplies and $2,000 for personal expenses other than transportation.

Mr. Zackary: All schools put spending money into the estimate they give you for your overall costs for the year. It just depends on how you want to use your money.

How does God fit into my search for financial aid?

Ms. Thompson: First, you have to pray for his direction and then listen. Remember, one reason we are told to make our needs known to him is so we can give him all the credit for meeting our needs.

Written by Tara Ryan Walker


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