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No (Grand)Child Left Behind

College Funding Options for Grandparents

By Kelly Burgess

One thing to keep in mind: You should never have to pay for financial aid or scholarships or to search for them. If any program or Web site asks for filing fees, tracking fees or processing fees, they're just out to make a buck. All of this information is free and available to anyone.

Below is a comprehensive roundup of programs that can help pay for college. The first four are for grandparents who have grandchildren going to college soon. The last two offer longer-term funding options for grandparents who are raising younger grandchildren.

This is the absolute first step in any college search. Free Application for Federal Student Aid (FAFSA) is filled out by all prospective college students, regardless of income, and sent to the college(s) the prospective student is interested in. The results of this application qualify the student for low-cost loans, as well as establishing a baseline for the college to work with when awarding scholarships, grants, work study, etc. Maintained by the federal government, Student Aid on the Web is a comprehensive guide to loans, grants and other funding options. These terms are three anyone looking for college funding will become very familiar with, because they are the primary non-scholarship sources of college funding. A Pell grant is a federal need-based grant (which means it doesn't have to be paid back) that provides up to $4,050 annually based on the student's financial need. Qualification is determined by FAFSA.

A Stafford loan is a federal loan program for families who qualify for financial aid. The government pays the interest on the loan while the student is in school. It is actually a loan to the student, not the grandparent, and the student pays it back after graduation from college.

A Parent Loan for Undergraduate Students (PLUS) is a low-interest, federal direct loan taken out by the parent or grandparent on behalf of the dependent student. It is generlly non-needs based, but Chadwick and Gray of NextStudent point out that it's still far preferable to taking out a home equity loan or dipping into that 401(k) because of available low-interest rates and tax breaks.

Want to see more?

• Retirement Fund vs. College Fund: Do Grandparents Raising Grandkids Have to Forfeit Retirement?
• Tough Love: Living With Your Child and Grandchild
• It Begins at Home: Fire Safety for Preschoolers
• Talk about it!