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It’s the ultimate Catch-22: you go to college so you can make lots of money later, but you need lots of money to go to college. According to Forbes, the average cost of attending public college in the United States is more than $28,000 per year, with private institutions costing more than $59,000 annually.
If you’re not prepared to foot your post-high-school education bills (or those of your children), take heart; there are several ways you can ease the college cash burden.
Search (high and wide) for scholarships
If you thought you had to graduate top of your class to qualify for a college scholarship, well, it certainly doesn’t hurt. That said, you might be surprised by how many scholarships are available — some of which aren’t dependent on your previous academic performance.
The amount of money awarded each year to undergraduate students has increased from $695 million in 1989-1990 to $6.1 billion in 2015-2016, Saving For College reports. According to the organization, the odds of winning a scholarship are about 1 in 8 for a student in a bachelor’s degree program.
If you’re unsure what scholarships are available to you, a simple Google search will get you started. For a list of popular scholarship websites go here. Scholarships are often awarded based on academic performance, financial need, the discipline of study and even family heritage and ethnic background.
Your financial aid office or high school guidance counselor may be able to help you determine which scholarships are best suited to you. Just remember, never pay to apply for a scholarship. College Scholarships advises that all legitimate scholarships are free to apply for, with information readily available online.
Fill out your FAFSA
A little paperwork can go a long way when it comes to paying for college — and the Free Application for Federal Student Aid (FAFSA) is a prime example. CNBC reports, each year the U.S. Department of Education awards more than $120 billion in federal grants, loans and work-study funds to more than 13 million college students. The catch? You need to fill out a FAFSA to be considered.
FAFSA forms for the current academic year are available to submit starting Oct. 1, and the sooner you submit, the better. CNBC also reports that financial aid is distributed on a rolling basis, so the sooner you apply, the better your odds of receiving aid.
Apply for federal student loans
When it comes to student loans, you’ll want to use any available federal student loans first, according to Complete Student Loans, a Utah-based nonprofit aimed at helping students to successfully finance and complete their education.
Federal loans provide flexible repayment plans, deferment options (in the event of unemployment, economic hardship or other situations), fixed interest rates and even loan forgiveness programs. Of course, not all federal student loans are created equal, so it’s important to know the difference between subsidized and unsubsidized loans.
A direct subsidized loan is based on financial need (remember that FAFSA?), with the government paying the loan interest while you’re enrolled in school at least half-time. Unsubsidized loans, on the other hand, are not based on financial need, and students are required to pay all the interest accrued during the life of the loan.
Look (cautiously) for private loans
Even if you qualify for federal student aid, those grants or loans may not cover all your educational expenses. To fill what U.S. News & World Report calls the “financing gap,” you may opt for private student financing.
Many lenders (banks, credit unions and other financial institutions) provide student loans, but it’s important to practice caution when applying for these loan programs. Because they are not backed by the government, private student loans require creditworthiness and/or a credit-worthy cosigner if you have a limited or poor credit history.
Before you apply for a private loan, be sure to ask lots of questions, including interest rate options. Remember that fixed rates stay the same over time, while variable rates can fluctuate throughout the life of the loan.
Ask about processing and origination fees, pre-payment penalties, and term and repayment options. If you’re uncomfortable with any of the terms of the loan, discuss it with a financial counselor or trusted advisor before applying.
College is an investment — but it shouldn’t break the bank. For more information and resources on financing your college education, visit Complete Student Loans. They can help you secure financing, refinancing and give you a free consultation.
