College students can benefit from knowing information about financial aid, the application process, scholarship opportunities, and tax credits and deductions. Financial aid and scholarships help students accomplish the daunting task of funding a college education. Additionally, although students have many expenses, one area where they can save money is through tax credits and income deductions on their yearly tax returns.

Financial Aid

• Grant money: No repayment is required for grant money, which is awarded on the basis of financial need.
• Work-study: Part-time jobs are provided for students through work-study programs in order to help pay for their education. A work-study job is related to your major or interests whenever possible and may be on or off-campus. The job will pay at least minimum wage. The amount you can earn will be limited to the amount that is awarded. Your eligibility for work-study will be largely determined by your financial need.
• Loans: There are many different loans that allow you to borrow money through financial aid, and not all of them require you to demonstrate financial need. However, loans that are not based on financial need will accrue interest at all times, while other loans will not accrue interest while you are attending college and during certain other periods.

To qualify for federal financial aid, you must fill out and file an application. Paper applications should be available from your high school or college. However, submitting your application online at the U.S. Department of Education's Financial Student Aid web site is now the preferred method and are processed more quickly.

It is a good idea to apply as early as possible each year in order to have priority consideration for the available resources.

Check with your school or online to find out the deadlines for the school year you will attend.

When filling out the application form, you should have your financial or tax information available to help enter information. If you are considered a dependent student, you will also be required to provide your parents' information. If necessary, the U.S. Department of Education will provide you with free assistance to fill out the application.

Once your financial aid information has been received and evaluated, you will be informed of the types and amounts of aid for which you are eligible. When deciding how much aid to accept, consider your future expenses, expected income, and remember that you must pay back student loans. You will be required to begin paying them back shortly after graduation or leaving school. Then, you can choose from a number of repayment-plan options and should consider applying for a student-loan consolidation.

In addition to applying for federal financial aid, check with your school to find out whether they offer nonfederal assistance programs such as state or institutional aid.

Scholarships

Like grants, scholarships are awards that you are not required to pay back.

Before applying for scholarships, apply for admission to your school. Your school may automatically consider you for scholarships based on your admission, previous scholastic achievements, and other information you provide them.

They may consider you for need-based scholarships based on your federal application for student aid. You should check with your financial aid office and the department of your major to find out if they have any separate or additional scholarship aid.

Additional scholarships are also available from outside sources. The key is to find legitimate scholarship opportunities that you are qualified for and apply.

Scholarships are offered for a variety of reasons, including academic achievement, participation and excellence in sports or other activities, race or minority status, contests, and association with certain organizations, clubs, employers, or other groups.

Ask your high school guidance office or the financial aid office (or their website) at your college or university what state and institutional scholarships may be available. Your guidance office will also have a database of other scholarships.

Find out if scholarships are available through your employer or organizations you are associated with. Large companies and organizations sometimes offer scholarships or tuition reimbursement for their employees or employees' children.

Also look for websites that perform free scholarship searches; you should not have to pay anyone to find scholarship opportunities. Keep in mind that local and specific scholarships will have less competition and give you a better chance of winning.

Decide which scholarships you are qualified for, follow the instructions, and pay special attention to deadlines. Be prepared to provide information such as ACT and SAT scores, GPA or transcripts, financial information, proof of eligibility, and letters of recommendation. In addition, you should be prepared to submit personal essays and exhibit your skills.

After gathering all requested information and filling out your application, have someone proofread it before you submit it. As in the case with federal financial aid, you should apply for scholarships annually.

Tax Benefits

College students qualify for education credits or deductions that make them eligible for lower taxes or larger tax returns. Depending on such factors as attendance and status, students of higher education can claim the Hope credit or the lifetime learning credit.

Graduates and others who are repaying financial aid loans can deduct interest paid on student loans on their tax returns. At the beginning of the year, a statement is sent containing the necessary information regarding these loans, and this information is also available online in the person's individual account information. Students should determine if they qualify for the Hope credit, lifetime learning credit, or student loan interest deductions, and take advantage of these tax benefits. The Internal Revenue Service Web Site provides valuable information on eligibility requirements for claiming of these and other credits and deductions.