college students talking about paying for collegeAs your child approaches college, you may be overwhelmed by a mountain of information on colleges you didn’t know existed and loan offers from banks you’ve never heard of. Fortunately, it’s not all that complicated, and all colleges generally follow the same guidelines.
Aside from looking at schools that are good choices for your child’s chosen area of study, there are other questions to ask your child before picking a college.
- Do you want to live on campus or commute?
- How are you going to pay for college?
That last question is the big one. In an ideal world, you began saving for your child’s college education when he or she was just a glimmer in your eye. Unfortunately, this isn’t an ideal world, and many students and parents struggle to pay for college.
Complete the FAFSA
Every potential college student must fill out the FAFSA (Free Application for Federal Student Aid). Even if a student isn’t requesting financial aid, most schools require it. Instead of having to fill out financial aid forms for each school your child wants to attend, he or she only needs to fill out the FAFSA once and choose which schools should receive it.
To fill out the FAFSA, you’ll need:
- Student’s Social Security Number
- Parents’ Social Security Numbers
- Student’s Driver’s license number
- Student’s Alien Registration Number (if not a citizen)
- Federal tax returns for both student and parents
- Records of any untaxed income for both, such as child support received, interest income, or veterans non-education benefits
- Student and parent information on savings and checking account balances, investments, real estate (except the house where you live), and other assets
The FAFSA can be filled out online.
Financial Aid Offers
After your child has been accepted by a school (or hopefully, several), and the school receives the FAFSA, it’ll send out a financial aid offer that shows exactly how much you can expect to pay for that school. The student doesn’t have to be a straight-A student or low income to receive merit scholarships. The exact formula that a school uses to determine merit varies, and some schools look at things such as the student’s chosen major, meeting application deadlines, your geographic location (colleges want diversity), and some even give out merit scholarships for merely filling out the FAFSA. Typically, private colleges offer more in merit scholarships than state universities do. Sometimes, the amount granted in merit scholarships can be substantial. Therefore, just because a school is expensive, don’t rule it out until you hear what it offers for financial aid.
How to Pay for College
In 2018, student loan debt reached an all-time high of $1.5 trillion. While student loans are convenient, they can take a decade or more to pay off, so before you apply for student loans, investigate other options.
Consider Community College
The tuition for a public university increased 213% from 1988 to 2018 and 129% for private colleges in the same timeframe. It’s really no wonder that more and more students are opting for cheaper community colleges. Even if your child is pursuing a 4-year degree, taking Gen Ed (the general education classes that most 4-year colleges require) at a community college first and then transferring to a 4-year school can save thousands. It’s important to check with the 4-year school first to find out what courses will be transferable.
Apply for Outside Scholarships
Scholarships are free money for school, and the student doesn’t have to be an all-star athlete to win a sports scholarship. Smaller, private colleges have sports teams too, and often offer scholarships to athletes. However, it doesn’t stop at athletes. There are thousands of available scholarships just waiting for applicants. The student’s high school guidance counselor is a good resource for information on local scholarships that the high school may offer as well as ones from other local organizations such as lodges, ranges, and clubs.
Typically, you don’t have to pay an application fee to apply for a scholarship, so be cautious of any that ask for money. You can check the legitimacy of organizations on the Better Business Bureau‘s website. Your child should begin looking for scholarships as early as the summer before his or her senior year because they all have different deadlines, and some require letters of recommendation from a teacher or mentor and/or written essays.
Several websites are dedicated to gathering scholarship information into searchable databases, such as Collegeboard.org, Fastweb.com, and Petersons.com. Finding and applying for scholarships takes a lot of effort, even with convenient databases available, but it’s money that you don’t have to pay back, so it’s well worth the effort.
See if the Student Qualifies for Grants
Grants, such as scholarships, don’t have to be paid back. They’re generally given out in two categories: need-based for lower-income families and merit-based for exceptional scholars. Some examples of grants are:
- Pell Grant: For low-income families
- SMART Grants: National Science and Mathematics Access to Retain Talent for students majoring in STEM studies
- ACG: Academic Competitive Grant, an academic grant
Grants can also be awarded to students who choose certain careers, students with disabilities, students in foster care, veterans, and members of the National Guard.
Join the Military
There are several ways that joining a branch of the military can help pay for college, such as Tuition Assistance programs, the G.I. Bill, the R.O.T.C. (which is at many colleges), and even loan payoff programs for tuition costs that accrued before signing up.
Use the Federal Work-study Program
Work-study is a government-funded program that provides on-campus jobs for students to help them pay for school.
Get a Job
If the student doesn’t qualify for Federal Work-study, there may still be available jobs on campus. However, they may not be offered until all the work-study jobs have been filled.
Live at Home
Many students want to experience campus life, but room and board can cost around $10,000 per year. Living with Mom and Dad can yield significant savings.
Reach Out
Sometimes colleges can “find” more merit scholarship money for students that ask for more help. It certainly doesn’t hurt to ask.
Student Loans
If you’re still coming up short after you’ve tried these other avenues, student loans can cover the rest. As part of the student’s financial aid package from the school, there are student loans listed. They may be:
- Direct subsidized loans: Loans in which interest doesn’t accumulate until the student has graduated
- Direct unsubsidized loans: Loans in which interest accumulates right away
- Direct PLUS loans: Loans made to graduate students and parents of dependent undergraduate students (Payment on Direct PLUS loans begins right away, whereas the student’s loans need to start being paid six months after graduation)
- Private loans: Many banks and other lenders offer student loans, but the rates and payment schedules vary
College can be a growing experience for children and their parents. By taking the extra time to explore all payment options, your child can begin a career with little accumulated debt.
