Even if you've diligently saved in a 529 plan account since your child or grandchild was born—or even before—you may still have a funding gap. Fortunately, other sources of financial aid, such as grants, scholarships, work-study, and loans are available to help cover higher-education costs.
Financial aid comes from a variety of sources, including the federal government, New York State, colleges, as well as community organizations, associations, and other groups. Some financial aid is based on financial need, while other financial aid is awarded based on other criteria, such as grades.
Grants and scholarships
Before pursuing other financial aid, get all the grants—free money—you can. Grants are available from the federal government, New York State, and colleges.
The New York State Tuition Assistance Program (TAP), the state's largest grant program, helps eligible New York residents attending in-state postsecondary institutions pay for tuition. TAP grants are based on the New York State taxable income of the applicant and his or her family.
To apply for TAP, as well as federal grants and other financial aid, start by completing the Free Application for Federal Student Aid (FAFSA). High school seniors can apply for financial aid beginning January 1.
Many colleges provide institutional grants and scholarships that may be awarded based on academic merit, artistic or athletic talent, financial need, or other factors. You can learn more about the types of grants awarded on each college's website.
Some college grants and scholarships require a separate application. Many colleges also use the FAFSA to determine their institutional financial aid awards; so even if you don't think your family will qualify for federal aid, you should still fill out the FAFSA.
Federal Work-Study Program
The Federal Work-Study Program provides jobs for students with financial need, allowing them to earn money to help pay their education expenses. Pay is based on the federal minimum wage but may vary depending on the skill level required for the job—and it goes directly to the student. Apply through the FAFSA.
Private scholarships
Many associations, organizations, and businesses sponsor scholarships. Check with your high school counseling office for details about local and regional scholarships. Find additional scholarships through College Board's Big Future and Fastweb.
Search scholarships on College Board
Search scholarships on Fastweb
Student loans
Before taking out a student loan, make sure you have applied for all of the scholarships and grants you're eligible to receive from the federal and state governments, your college, and organizations in your community.
Consider a federal loan first, which usually has lower interest rates and more repayment options. You apply for all federal loans by completing the FAFSA.
If after exhausting all federal and state sources of aid, you find you still have a college funding gap, you may consider a private loan to make up the difference.
And remember—saving more in your 529 plan account now means that you'll need to borrow less later.
