Tips for paying for college and avoiding debt.
Attending college can be extremely expensive, and student loans are a common method for financing a degree. However, if you prefer to avoid or minimize debt, it is possible to obtain a college degree without substantial savings or taking out huge student loans. To assist you in graduating without the burden of large loan repayments in the future, here is some essential information about ways to pay for college and save money.
FAFSA
Completing the Free Application for Federal Student Aid (FAFSA) is the initial step in discovering your eligibility for financial assistance. Although it may be cumbersome (like many federal forms tend to be,) it serves as a gateway to wide variety of financial assistance. The information from your FAFSA is used to determine if you are eligible for federal student loans, Pell Grants, and work-study. It's also necessary when applying for state funding and many private scholarships. Additionally, many colleges use the information from your FAFSA when considering their scholarship and financial aid offers.
Understanding Student Loans
Student loans are tailored to fund the expenses of a degree program, which includes tuition, fees, living expenses, and materials such as books and supplies. There are two primary types of student loans: federal and private student loans.
Federal loans often have more advantages and flexible repayment options. They might also offer subsidies or reduced interest rates compared to private loans. Nonetheless, there is a cap on the total amount of federal loans you can borrow. Within these limits, your institution will decide your eligible amount.
The federal loans available to undergraduate students include:
1. Federal Direct Subsidized Loans
These are for undergraduate students with financial need (as assessed by the institution). The federal government covers the interest while you're in school, for six months post-graduation, and during any deferment period (such as attending graduate school). No credit check is required for these loans.
2. Federal Direct Unsubsidized Loans
Available to all undergraduate students irrespective of financial need, these loans' amounts are determined by the school. Unlike subsidized loans, interest accrues from the time the loan is disbursed.
The federal government offers two other types of student loans as well. Direct PLUS Loans are designed for graduate students and they can apply for these themselves. Loan options designed for parents or guardians are known as Parent PLUS Loans and these assist with their child's undergraduate education costs. The maximum amount for Parent PLUS Loans is the cost of attendance as determined by the institution, less any other financial aid received. Parental credit ratings are considered for these loans, unlike federal Direct loans to students. Even those with an adverse credit history may qualify if they meet additional criteria.
Private loans are entirely credit-based, relying on the credit score and history of the borrower or that of a co-signer, such as a parent or spouse, to determine eligibility and interest rates. Since lenders have varying policies, rates, and repayment options, it is advisable to compare different lenders.
Scholarships
Scholarships are a form of financial aid awarded to students that does not need to be repaid. It's a common myth that scholarships are exclusively for student-athletes; however, this is far from the truth. There is a wide array of scholarships available for various types of students. Scholarships represent free money given to you for your academic success, athletic prowess, the demonstration of unique talents, and several other attributes that make you appealing to a particular school. Certain institutions provide merit-based scholarships. These are institutional funds used to attract students that the college feels would be a great addition to its student population. Eligibility criteria can include a high school GPA and submission of a personal essay.
Your eligibility for these scholarships may also depend on your chosen field of study, such as nursing or STEM-related degrees, which can be offered by educational institutions or external organizations.
Additionally, there are scholarships tailored for students from minority groups or those with unique life experiences, such as scholarships for Black students, Native American students, LGBTQ+ students, single parents, or students who were raised in a specific state or city.
Typically, merit-based scholarship applications are separate from the FAFSA process and frequently require materials such as personal statements or essays. Working with a highly qualified college admissions consultant can help you discover scholarship opportunities that you might not be aware of.
Grants
Unlike schoralships that are merit-based, grants are typically need-based and are awarded to students demonstrating a financial need. You can get grants from the federal government, your state, and your specific college. Filling out the Free Application for Federal Student Aid, or FAFSA, each year you’re in school is important to finding and remaining eligible for these awards. There a tons of grants available out there, and working with a college admissions counselor can help you find and apply for the right college grants.
Work-study
Work Study is a form of state- or federal-financial aid that is determined by financial need. Work-study programs offer part-time employment to students who demonstrate a financial need, allowing them to earn money to support their education expenses. These jobs often align with the student's field of study or involve community service. To be considered, you have to complete and submit the Free Application for Federal Student Aid. A number of factors are considered, including household income, the size of your family, and how many members of your family are enrolled in post-secondary education, among others. Not all schools participate in the program so you will want to check with the college's financial aid office to find out if they support it.
Costs
It is important to also consider the hidden costs of higher education beyond just tuition, which is a significant expense in itself. Here are some additional costs to prepare for:
Books and Supplies: Textbooks and other academic materials come with a price. Set aside funds for these essential educational resources.
Housing: A place to stay is a must, whether it's on-campus or off. Remember to account for rent, utilities, and other living expenses in your budget.
Food: Whether you sign up for a meal plan or decide to go grocery shopping on your own, allocate funds for proper meals to ensure you stay well-nourished and ready to learn.
Transportation: The costs of commuting to and from campus can accumulate, particularly if you lack a vehicle. Consider the expenses of public transit, fuel, or parking fees.
Personal expenses: Everything from toiletries and laundry soap to movie tickets or new footwear can tally up. It's important not to neglect these personal expenses in your budget.
Summary
Pursuing higher education may come with a hefty price tag, but with some smart planning like working with a college admissions consultant, it's possible to save money and avoid huge student loan debt. Keep in mind, the investment in your education now will yield significant returns in the future. As a college admissions consultant in Washington State, I am equipped with the tools to help students from all over find scholarship money and manage the financial aid process. I suggest that all students pursue their aspirations, complete the FAFSA application, and not allow the high cost of a college education deter them from achieving their goals.