Senior year is finally here! There will be a lot to celebrate over the next year as the high school era draws to a close. As your child prepares for college, however, you may be feeling a little less than celebratory about impending college payments.

Many parents find that even prudent financial planning hasn't fully prepared them for "sticker shock" when it comes to the current cost of college. Even parents who have faithfully invested in tax-sheltered college savings plans often find that their efforts have barely kept up with inflated tuition and housing costs.

If you're starting to suspect you'll need some financial aid, don't panic. There is plenty of help available, but now is the time to start researching your options. Here's an overview of possibilities to research.

Scholarships: Scholarships and grants are a great option for qualifying students. Check with your child's guidance counselor about the availability of scholarships. They may be available from sources like these:

• Corporations
• Labor unions
• Professional associations
• Credit unions
• Educational foundations

Many scholarships are achievement-based. That means that things like grades, achievement in selected courses, or exceptional ability in activities such as athletics, music and visual arts are the criteria for scholarship and bursary selection. Scholarships usually do not have to be repaid, but may require students to maintain a level of achievement while attending the institution.

It's also a good idea to look at online scholarship search programs. We'll have more about finding the right scholarship for your student in a future edition of this newsletter.

Grants: The Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant are available to students with exceptional financial need. In addition, depending on your child's achievements and each school's level of funding, colleges and universities may offer their own funds, sometimes called institutional aid, to encourage your child to attend.

Federal Loans: Lenders such as Wachovia Education Finance offer low-interest, government-guaranteed Stafford Loans for students. Depending on your child's financial need, the government may pay the interest while they're in college.

Student loans are useful for those without any credit rating as it is often easier to qualify for a student loan than a personal loan. If your son or daughter pays back the loan according to the payment schedule, this can be a big help in assisting them to establish a good credit rating.

There are several key points to consider when helping your son or daughter research student loans. Help your kids enquire about interest rates, when monthly payments will begin, whether there is a grace repayment period or what will happen if they miss a payment. Also investigate payment options that would allow them to make large lump sum payments once they start working, thereby reducing the term of the loan.

Federal Work-Study: The Federal Work-Study Program provides on- and off-campus jobs for students with financial need to help pay educational expenses.

Parent Aid and Private Loans: The Federal PLUS Loan for parents and alternative loans offered by lenders can help you meet the remaining cost of your child's college education.

Get Ready for the FAFSA

To find out if your child qualifies for federal student loans, grants and work-study, you must complete the Free Application for Federal Student Aid (FAFSA) after January 1st of your child's senior year of high school. This form is available at college and university financial aid offices, public libraries, and at the Department of Education's web site at: www.fafsa.ed.gov.

The FAFSA will ask questions about your income and savings. Colleges will use this financial information to determine how much financial aid you can get. (We'll tell you more about filling out the FAFSA in a future issue of this newsletter.)

Now is the time to get organized for the FAFSA. Over the next couple of months, you'll want to round up:

• Income tax returns
• W-2 forms
• Pay stubs
• Interest statements, such as the 1099-INT
• Home mortgage and debt information