As families prepare to send children off to college, they also are preparing for years of tuition payments. For many families, it may also mean years of repaying loans.

State universities across North Carolina have seen a record number of students applying for financial aid this year. Financial aid officers at both N.C. State and UNC-Chapel Hill reported a more than 20 percent increase in the number of financial aid packages they have awarded to students.

Shirley Ort, director of Scholarships and Financial Aid at UNC-Chapel Hill, said new federal eligibility rules have made it easier for families to qualify for financial aid, but the economy is playing a part.

"Family circumstances are changing," she said. "Families are receiving notification of layoffs or wage reduction, and so we're still seeing a number of applications from families who hadn't planned on needing money."

An increasing number of families also are requesting reconsideration of financial aid packages already awarded.

"I think for people who have had changed circumstances, the thing to do is to file the FAFSA form and then meet with the financial aid staff at the college that they're interested in going," said Steve Brooks, director of North Carolina's State Education Assistance Authority (NCSEAA).

Brooks said money is still available to help students, especially those in financial need.
The federal stimulus program has increased the maximum Pell Grant award available. Students may receive as much as $5,350 this school year and can apply at any time throughout the year.

More than $350 million in state education grants also are expected to be available in 2009-2010, giving aid to specific types of students, including minority and low-income students, as well as those planning to go into high demand fields, like teaching and nursing, and students attending community college.

"With PELL grants and state grants in North Carolina, virtually anybody who's making less than about 85,000 dollars a year can go to community college for free," said Brooks. "The combination of grants would be sufficient to do that."

Stimulus money also is helping families who don't qualify for need-based aid, with lower interest rates and origination fees on education loans to students and a new loan repayment program based on income.

Education loans only are available to students. Parents may apply for federal loans for education, called PLUS loans, but with interest rates fixed at around 8.5 percent, some people are turning to private loans or even home equity loans to fill in the funding gaps.

"I would shop around," said Brooks. "If you can find a reputable lender at an interest rate that is lower than that 8 and a half percent, and one that could be refinanced later if interest rates go up, that would be certainly something to look at."

Students and parents can find a wealth of information on paying for college at the College Foundation of North Carolina website. The site also includes a link to the Free Application for Federal Student Aid, where parents can plan ahead by completing a FAFSA4caster to get an estimate of your family's eligibility for federal student aid.

 
Resources for Paying for College:

College Foundation of North Carolina (includes state grants and loan information) http://www.cfnc.org/

Free Application for Federal Student Aid http://www.fafsa.ed.gov/

FAFSA4caster http://www.fafsa4caster.ed.gov/F4CApp/index/index.jsf

Federal Grant Information
(http://studentaid.ed.gov/students/attachments/siteresources/Grant_Programs_Fact_Sheet_04_2009.pdf

Fact Sheet on Federal Education Loans http://studentaid.ed.gov/students/attachments/siteresources/Loan_Programs_Fact_Sheet_04_2009.pdf