Financing

The College Cost Reduction and Access Act of 2007 ("CCRAA" or the "Act") was enacted to make college more affordable for low- and moderate-income students by phasing in increases in government grants. For example, in 2007, the maximum Pell Grant was limited to $4,310, whereas the maximum for 2012 was $5,400. The Act also decreases interest rates on government-backed loans and even cancels outstanding debt in certain situations. The favorable terms for grants and loans represent an important step in achieving universal access to higher education. This report examines the problem of inadequate college assistance, the enactment of the Act, the major provisions affecting college student borrowers, and the funding of the new benefits.

The Rising Cost of Higher Education Leads to Massive Student Loan Debt

Federal student aid has not kept pace with the escalating cost of higher education and the reduced state support of public colleges and universities. As a result, some students decide that a college education is out of their reach. Other students and their families borrow more to pay tuition and other expenses. Students who graduate with unpaid loans are burdened with thousands of dollars of debt that they must usually begin repaying shortly after graduation. Studies show that about 39 percent of college graduates under 35 say paying off their loans will take more than ten years. For graduates with low- or moderate-paying jobs, the monthly principal and interest due may far exceed their ability to pay.

Attending a community

A scholarship is a great way to pay for part or all of your community college education. Whether you have a special talent, have outstanding grades, are a member of a minority group, or have a financial need, there's a good chance that you may qualify for one or more scholarships that will help you pay for your education. There are a number of different types of scholarships available. For example, some scholarships are awarded to students for volunteering and for performing community service. Other scholarships aim to help students going into specific areas of study, such as education. Still other scholarships seek to help students who have experienced some kind of hardship, such as the loss of a job.

Many scholarship sponsors look at various outstanding qualifications as their award criteria, so you don't have to be a straight-A student to qualify for some scholarships. In fact, there are a number of unconventional scholarships out there, such as ones for creativity, charity work, as well as skills in writing, photography, or dance. Exceptional scholars and average students alike should consider applying to those scholarships that best fit their grades, needs and talents.

Merit-Based Scholarships

Merit-based scholarships are awarded to students with a track record of outstanding academic performance. In order to be considered for a merit-based scholarship, a student must meet certain requirements such as a minimum GPA or minimum standardized test scores. This type of scholarship tends to be highly competitive, however, some community colleges

Embarking on a community college experience can be overwhelming for many students. After all, rising costs of education can quickly eat away at your savings or your earnings from a part-time job. For this reason, a loan may be just the answer you've been looking for. An educational loan can help you pay for community college, allowing you to work towards your degree without the added stress of wondering how you will pay for it. A student loan can be repaid over time, once you've completed your education.

It is important to keep in mind that borrowing money is expensive, even if it is in the form of a government-subsidized loan at a relatively low-interest rate. If you have any money saved or are able to work and attend community college part-time, these may be some great options to avoid having a large amount of debt upon graduation. Only you, your parents, and possibly a financial advisor can determine the borrowing/savings scenario that is ideal for you.

Types of Loans

There are a number of different education loans available, each one uniquely tailored to address the needs of certain individuals. When the federal government offers loans to students, these loans usually have low- interest rates. The Stafford Loan is the main vehicle by which the government loans money to students. Stafford Loans are further broken down into two subcategories:

• Subsidized - In this case, the interest on your loan is paid by the government while you are still

The burden of financing your community college education can be eased slightly by the various Grants that are offered by the Federal Government. Unlike loans, grants do not have to be repaid once you have completed your community college education. Grant money is, essentially, free money. It can be used to cover tuition costs, books, and other school-related expenses. Navigating through the federal Grant world can be time-consuming, but it is well worth it as an investment in your education and your future.

The federal government gives Federal Pell Grants as a gift to those students who qualify based on need. The amount of the Federal Pell Grant varies from student to student and depends partially on the cost of tuition. Many students will also be happy to learn that eligibility for the Federal Pell Grant does not depend on your GPA or any other achievements. It does, however, depend on these other factors:

• Recipients must have a US Citizenship
• Male recipients must show proof of their Selective Service registration
• Recipients must have their high school diploma or a GED
• Recipients must be enrolled in any undergraduate school
• Recipients may only be awarded one Pell Grant in any year (Schweitzer 2007 - 1).

The financial aid office of your community college is likely to administer certain aid programs, all aimed at reducing the financial burden on students. In addition, most states also have a need-based grant program that is administered through the local colleges. Your local community college may also have certain

Embarking on a journey of higher education can be exciting, confusing, and stressful all at the same time. To help with the financial aspect of education, current and prospective community college students are in a unique position to choose from various forms of student aid available. As you navigate your way through the myriad of financing options out there, let this overview help you in making the right decisions about financing your education.

While the average college tuition rates are rising fast across the country, you may be pleased to learn that the average cost of tuition at a community college is just under $2,300 per year (American Association of Community Colleges 2007). Although this cost is relatively low when compared to 4-year institutions, many students still find themselves looking for ways to finance their community college education. Unfortunately, it is also a fact that most parents are either unwilling or unable, for various financial or personal reasons, to finance all of the costs of sending their child to a community college.

This video offers tips on how to pay for a college education.

You may be surprised to learn that there are over 1,200 community colleges across the country. In fact, 11.6 million students, just under half of all U.S. undergraduates, attend community colleges. Of those students, 47% receive some sort of financial aid (American Association of Community Colleges 2007).

The federal government alone