College grants for single parent

POTENTIAL college students shouldn't let the rising cost of education--an annual average of $12,841 for tuition, room and board at public colleges and an average of $27,677 at private colleges--keep them from realizing their dreams. If parents and students are persistent and determined, they can use the ABCs of college financing--a combination of loans, grants, scholarships, work-study programs, summer internships--to pay for a coveted college degree.

A The first step for parents and students is to start early. Financial aid advisors say parents and students can't start making plans too early to pay for college. One plan parents can start using soon after their child is born is called the Coverdell Education Savings Account in which parents can save $2,000 tax-free per child, per year for college at 5 percent interest.

Contributions to a Roth IRA also can be withdrawn to pay for college without paying income tax or a 10 percent early withdrawal fee. Parents can also invest money for their child's education with two tuition tax credit programs called Hope and Lifetime Learning tax credits, which offer a reduction of up to $2,000 in federal income tax owed annually for those who qualify. Parents can also check with banks and insurance companies about other ways to invest money for education.

B The second step is to use the Internet, local libraries, high school guidance and college financial aid offices to identify scholarships, grants and other funding sources. African-American families especially should check guides that list foundations, churches, unions, and other sources that give scholarships and grants to African-American students.

An excellent resource is the annual EBONY Scholarship Guide. Families may find that students qualify to receive a scholarship for any number of reasons, including being a single parent, Black, athletic, a good student, left-handed or majoring in a particular subject.

Asking early is best because the money is given on a first-come basis, says Terri Powers, financial aid executive director at Philander Smith College in Little Rock, Ark. She refers students to search for aid at Web sites, including www.fastweb.com, www.freschinfo.com, and www.college-scholarships.com.

C The third step is to apply for aid early. To make sure families get all the aid they need, they should fill out the Free Application for Federal Student Aid or FAFSA as early as possible. The application instructs students to include their college choices and household income to help the federal government determine if they are eligible for a Pell grant. Then the selected schools use the information from the FAFSA to determine what additional financial aid the student is eligible for, based on need, Powers says. Loans should be used as a last resort because they have to be paid back with interest.

5 Best ways to Save MONEY

1 IN THE SEARCH for financial aid, start early! For instance, a Coverdell Education Savings Account can save parents $2,000 tax-free per child, per year.

2 PARENTS CAN withdraw contributions from a Roth IRA to pay for college without paying income tax or a 10 percent early withdrawal fee.

3 INVEST IN tuition tax credit programs called Hope and Lifetime Learning tax credits.

4 CHECK the EBONY Scholarship Guide for information that indicates how students might qualify for scholarships--single parent, academic excellence, athletic, Black, etc.

5 CHECK WITH BANKS and insurance companies to find ways to invest money for your child's education.