Yesterday, we started our discussion  with Peter Mazareas, Chairman Emeritus of the College Savings Foundation, about saving for college and today we’re happy to bring you the conclusion of that interview. We talked about things that parents can do, even if their kids are still very young, as well as what they should avoid.
In part two, we’ll take a look at how things have changed. As someone who went through this process just a little over ten years ago, so much has changed. I can’t imagine how it’ll look in twenty, but Peter helps us look into the “far” future and near future of college savings  and provides us a wealth of information.
1. For the parents out there who were familiar with financial aid over twenty years ago, what has changed?
Twenty years ago, grants “free money” was approximately 60 % of the financial aid package. Today the package is approximately 60% loans. In addition the federal governments Stafford loans covered a larger percentage of college costs. Due to the escalation of tuition costs rising at twice the rate of inflation, government loans are not enough and parents/students often have to seek out private loans to pay for college.
2. What are some of the relatively new government programs available to help students pay for college?
There are no new loan programs available, however the government has several Education tax incentives to help families save and pay for college. Including, Hope and Lifetime Learning Tax Credits , 529 Plans , Coverdale Educations Savings Accounts.
In addition, to help students who have outstanding College Loans The Obama Administration recently established a Loan Forgiveness Program, an Income Contingent Payment Program and a Loan Consolidation plan all designed to help students pay of the loans. For more information about federal student loan Programs and tax incentives go to the US Department of Education’s website: www.ed.gov 
3. After grants, where should students and their parents look for loans for higher education?
First, parents/student’s should aggressively search and apply for scholarships offered locally and nationally. Each year hundreds of millions of dollars is awarded from community groups, foundations and businesses. There are a host of free on line scholarship sites that should be used. Parents should not pay for a scholarship service of to use a site as there is no value added and unnecessary.
The first loan should be a federal government loan. There are Stafford loans for students ranging from $5500 Freshman year to $7500 Senior year and PLUS Loans for parents up to the cost of attendance.
If additional loans are needed, parents should be good consumers and carefully research the various private student loans available and compare terms, features, and total interest charges over the life of the loan. There are some good and some very bad private loans in the marketplace.
For more information about federal student loan Programs go to the US Department of Education’s website: www.ed.gov. For Private loans go to: www.Finaid.org or www.simpletuition.com.
4. Student loan rates have been in the news lately, why are rates set to go up and what can parents do about it?
The rates on many federal loans will double in July unless Congress passes legislation to extend the current 3.4 percent rate. The Congress sets student loan rates periodically. It appears they will do so as both Presidential Candidates support extending the lower rates. Parents can call their congressman and senator to encourage them to extend the low rates.
Once again, I’d like to thank Peter Mazareas for his incredible insight into college savings and I hope you got as much out of it as I did.