Deciding how to help a family member pay for college is something most people will encounter. But not knowing where to start can delay one from making plans that make affording college a reality. So where does one start?
Who Pays?
Although most students borrow some money through student loans, a survey by Sallie Mae® and Ipsos reveals that parents pay a greater percentage of the cost of a college education. Advisors suggest that planning should begin with money that does not have to be paid back, in the form of savings, income, scholarships and grants.
Savings 529 College Savings Plans
If you want to invest in a college savings plan, you can request that your after-tax contributions in stock market investments are set aside for your child to access at a later date for their education. The amount of money accumulated in such an account is based on how well the investments provide returns. For more information, please see Jack Hansen’s article on page 15.
Coverdell Education Savings Accounts
A Coverdell Education Savings Account (ESA) can be set up at a bank or brokerage firm to help pay your child or grandchild’s qualified education expenses. Like 529 plans, Coverdell ESAs allow money to grow tax-deferred and withdrawals are tax-free at the federal level (and in most cases, the state level) when used for qualifying education expenses.
Rewards Programs
There are credit card programs that reward you for shopping. UPromise sends your spending rewards to a student’s 529 College Savings Plan account or other college savings account. Parents, family and friends can all open a UPromise account and direct their rewards to your student. Other programs such as Fidelity® Rewards Visa Signature® Card and the College Counts 529 Rewards Visa Card also allow you to link your rewards to a college savings account.
Other Savings
Remember that children can save from their own gifts and earnings as they begin working. Other savings accounts, investments such as property and items that increase in value such as collectibles can be options to help pay for college.
Scholarships
Supplement college savings and income by maximizing college scholarships, grants, and work-study.
Good grades and talent aside, there are scholarships for a variety of situations. In fact, 58% of U.S. families in a 2020 survey by Sallie Mae were using scholarship funds to help pay for college. Grants were used by 48% of families. Relatives or friends contributed to 10% of students’ funding for college. While grants and work-study may be awarded based on financial need, not all scholarships require need-based eligibility.
MNU’s Office of Admissions provides several sources to search for scholarships at scholarships.com, collegescholarships.org/financial-aid and fastweb.com.
Scholarships From MNU
MNU offers scholarships to a large number of students enrolled in traditional programs who are seeking their first bachelor’s degree. Some are based on need, academic record or talent in athletics or fine arts performance. Others require a relationship to a group such as a church. The Nazarene award, for example, provides a significant amount to traditional undergraduate students who are members in good standing of a Church of the Nazarene congregation.
Department scholarships are offered by academic departments to reward students for exceptional abilities and leadership qualities. The Ministry Scholarship assists students going into full-time ministry and there is a scholarship for the dependents of pastors. All of these are explained in the admissions process.
Additional scholarships from endowments created by generous alumni and friends of the university are important additions to the funding available to MNU students. MNU scholarships are funded in various ways, including the University Fund’s annual phonathon and the President’s Honors gala. Without scholarships, many MNU students would have fewer opportunities.
Clayton Cook, a 2021 accounting graduate, says scholarships made his MNU experience possible. Clayton has enjoyed a rich experience with multiple leadership roles at MNU. He has also helped raise thousands of dollars for the university as a supervisor of a team of phonathon students.
“The scholarships that I received for academics and involvement on campus have given me the opportunities I have had at MNU,” Clayton says. “I am very grateful for those scholarships, and I know they will continue to impact me throughout my life. I am so thankful for the support I have received and I look forward to being able to give back in the future.”
His future looks bright as Clayton has accepted a job in his chosen field at BKD LLP, one of the country’s largest accounting firms.
Whether it’s a few dollars or a significant gift, anyone can assist more MNU students by giving to scholarships.
Student Loans and The Pioneer Pledge
Once all of the previous sources have been maximized, it is time to explore federal student loans. The proliferation of stories about the media-named student loan crisis may cause concern about taking out loans for college. At MNU, students have a safety net called Pioneer Pledge.
The pledge is from MNU to first-time college students. Suppose an eligible MNU graduate has financial difficulty paying their student loans (annual income under $48,000). In that case, the program will work directly with them to help repay their loans until they either reach a point of financial stability or repay their loans entirely.
Pioneer Pledge provides peace of mind that the cost of an MNU education is not an obstacle to achieving one’s goal. Beginning in 2019, all first-time college students who complete their degree at MNU are included in Pioneer Pledge. Visit www.mnu.edu/pioneer-pledge for more information.
How to Apply for Loans
All colleges and universities recommend that students complete the Federal Application for Student Financial Aid or FAFSA. Completing this application opens the door to all financial aid services at MNU because the FAFSA results will determine eligibility for need and non-need-based financial aid.
If there is still a gap between the available funds and college costs, private educational loans are also an option. Consumerfinance.gov provides comparisons and caveats when choosing a private loan lender.
Here to Help!
Throughout the financial aid application and award process, MNU staff in the Student Financial Services Office will assist students and parents. Contact them at finaid@mnu.edu or 913-971-3298.
