How to Pay for College?
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When students are accepted into college, they may find themselves questioning, “How am I supposed to pay for this?” With the economy, the way it is today, the prices of college tuition and fees have skyrocketed, and many people are not able to go to college because they cannot afford it or cannot find their way to paying for college.
Whether they come from a military family, have an excellent academic record, or demonstrate financial need, most students qualify for some form of financial aid and various ways to pay for college. This article will discuss some ways of how to pay for college, and guide students on the possibilities and options they have, to kickstart their higher education.
Ways to Pay for
College
There are many ways to pay for college that could potentially reduce the overall cost of education or sometimes remove that cost entirely. There is no one-size-fits-all way of paying for college, which makes it essential for students to explore their options and learn more about the various ways they can pay for school. Here are 10 popular and common options for students to explore:
FAFSA
Filling out the Free Application for Federal Student Aid, or FAFSA, is the most crucial and first step a student must take when figuring out how to pay for college. The form will assess the student’s eligibility for financial aid, including federal loans, grants, work-study benefits, and even some merit-based scholarships, based on their academic performance and other criteria. The FAFSA may be filled online on the official Student Aid website.
Scholarships
Scholarships are financial awards that students receive for their academic achievements, talents, and contributions to the community. They are frequently based on a particular field of study, interest, qualification, or achievement and are supported by a variety of different funding sources, including schools, companies, churches, clubs, or organizations. Scholarships are generally merit-based, sometimes need-based, or a combination of both. While merit-based scholarships are given to students who have excelled academically or athletically, need-based scholarships are awarded to students whose families cannot afford college or who fall under specific categories such as military families, LBBTQ, minorities, ethnic groups, etc.
After students have been admitted to a school, they will receive information from the financial aid office about scholarship opportunities at that institution. Some colleges or universities have funds that are specifically for their own students, but most schools will also allow them to look into scholarships from other institutions as well. Many scholarships have specific requirements, so it is important to find the one that fits.
Grants
Grants are often made to individuals with special needs by the federal government, nonprofit organizations, and foundations and are awards that do not need to be repaid. Grants can be used to defray educational expenses such as student housing, transportation, books, library fees, and research materials, among others. There are many types of grants available, each of which is tailored to specific needs. Most grants are need-based, often considering the financial background and status of the student and their family, while some are merit-based.
The Federal Pell Grant is a scholarship/grant that helps students who have financial needs. Students do not need to pay back the Federal Pell Grant, even if they drop out or get an F.
The Federal Supplemental Education Opportunity Grant (FSEOG) is a scholarship/grant that helps students who have financial needs. Like the Federal Pell Grant, the FSEOG does not have to be repaid regardless of whether or not the student has completed their education.
work-study
The Federal Work-Study Program (FWS) is a need-based part-time employment program, not a grant or loan. FWS jobs include jobs on campus and jobs off-campus that are related to students’ course of study. Work-study is a financial aid program that is available to undergraduate, graduate, and professional students who require assistance with tuition, fees, or additional expenses such as accommodation and board. Job positions can be anything from working in residence halls, fitness centers, and libraries to bookstores, research labs, and other jobs off-campus.
Federal Loans
Another typical way to pay for college is to take out a student loan. Federal Loans are available to all students with financial needs. Direct subsidized (based on financial need) and direct unsubsidized loans are two types of federal loans for undergraduate students (not based on financial need). The U.S. Department of Education helps students apply for these types of loans at reduced interest rates and provides repayment options and loan forgiveness programs. It is worth noting that there are yearly and lifetime limits on the amount of federal student loans one can get from the government.
Subsidized and Unsubsidized Loans
Subsidized Loans do not accrue interest while the student is in school at least half-time and during grace and deferment periods. Loans, such as Stafford or PLUS, can be either subsidized or unsubsidized. Unsubsidized Loans accrue interest during grace and deferment periods while the student is in school. The student is responsible for the interest that accrues during these times and will be asked to pay this back after graduating or dropping below half-time enrollment. More information on subsidized and unsubsidized loans is available here.
Private Loans
Besides the federal government, banks, credit unions, and private lenders offer educational loans too. Using private student loans, students can borrow up to 100% of their total cost of attendance, including tuition and fees and living expenses. Interest rates are variable or fixed, and repayment is possible while in school or after graduation. Students should note that if they are eligible for and take out a private loan, they should develop a repayment schedule that they can commit to and payback on time to keep a good credit score or standing for the future.
Alternative Loans
Alternative student loans are private student loans issued by banks and financial institutions that are intended to assist students who are ineligible or have been denied federal financial aid or who do not qualify for federal financial aid. Alternative loans are not required to be repaid until the student quits school, receives a deferment, or completes their degree.
Jobs
Having a job is beneficial to students because it can defray the costs associated with college and provide extra spending money. It is important to remember that while having a job while attending school may seem appealing, it can be difficult balancing work and school and could be detrimental to one’s grades. In turn, this could potentially eliminate the student from receiving any scholarships based on academic performance.
Nevertheless, on the flip side, having a job is beneficial because it prepares the student for the workforce and gives them valuable skills that can help them after college.
Affordable School
College is a major investment, and it is no surprise that many families plan for how they will be able to afford it. All parents should discuss how they hope to provide for their child’s college education and the best way they can save. One of the most popular ways to save for college is the 529 College Savings Plan.
The 529 college saving plans are investment vehicles designed to encourage saving for future education costs. These savings plans are sponsored by individual states and managed by financial institutions. Contributions grow tax-deferred, meaning students pay no income taxes on the growth of their savings. Savings can be withdrawn tax-free to pay for qualified education expenses. There are two types of 529 plans: Savings Plans and Prepaid Tuition Programs.
Savings
College is a major investment, and it is no surprise that many families plan for how they will be able to afford it. All parents should discuss how they hope to provide for their child’s college education and the best way they can save. One of the most popular ways to save for college is the 529 College Savings Plan.
The 529 college saving plans are investment vehicles designed to encourage saving for future education costs. These savings plans are sponsored by individual states and managed by financial institutions. Contributions grow tax-deferred, meaning students pay no income taxes on the growth of their savings. Savings can be withdrawn tax-free to pay for qualified education expenses. There are two types of 529 plans: Savings Plans and Prepaid Tuition Programs.
Savings Plans allow parents to save for college in an individual investment account and allow families to choose from a variety of investment options that can be used at different schools.
Prepaid Tuition Programs allow families to prepay for college at an in-state school – ensuring a set price – regardless of increases in tuition down the road.
Of course, tapping into a regular savings account into which parents (or students) have regularly put money with the objective to pay for educational expenses is another way of paying for college.
Important Note on Loans: Students must always keep in mind that they must repay their loans on time. Be sure to read all information related to a loan before signing any documents or borrowing money. Also, know the various repayment plans for different kinds of loans.
How to Pay for College
Without Loans
So, “how to pay for college without loans?” There are several options available to students who want to avoid loans. While there is no sure-fire way of avoiding student loans for some, many students can and should first explore ‘non-loan’ options to pay for college.
Scholarships
Scholarships are financial aid awards that do not need to be repaid and can be awarded based on merit or financial need.
Grants
Grants are awards considered “gift aid”, that do not need to be repaid and are mainly based on the student’s family’s financial status and background.
Some other popular ways of offsetting educational costs without taking out loans are:
Some other popular ways of offsetting educational costs without taking out loans are:
- Signing up for Work-Study programs & Assistantships
- Getting a part-time job while studying
- Claiming tax credits, if applicable
- Choosing an affordable school
- Depending on family savings
How to Pay for Living Expenses
While in College
Although scholarships and loans may often cover most educational costs, they generally may not pay for expenses a student will have to incur outside of their programs. Many students ponder, “how to pay for living expenses while in college?”.
Grants
Many grants will cover educational expenses apart from tuition, such as a student’s transportation, food, accommodation, books, research materials, etc. In most instances, meeting these expenses constitutes a large portion of a student’s living expenses.
Assistantships
Obtaining a Teaching Assistantship is an option for students who want to work as assistants to professors, assisting them with instructional constraints, working in a lab or workshop, or teaching and demonstrating for undergraduates. In exchange for their work, they will receive a fee waiver or stipend. A Research Assistantship is another option that provides a fee waiver or stipend but differs from teaching assistantships in that they allow students to assist a professor with their research rather than teaching.
Some other popular ways of offsetting living expenses while in college are:
- Signing up for Work-Study programs
- Getting a part-time job while studying
- Seeking financial support from parents and family members
Other Ways to Save while
in College
Many people consider saving money to be an art. However practical and careful one may be, it is not always easy to save money or economize. Apart from the ways discussed in this article on how to pay for college and cover living expenses as a student, there are some other ways of being frugal and cutting costs that may help save money for education-related expenses or even paying for college. Here are some tips and tricks to save while in college:
Student Discounts
students are usually eligible for discounts at almost all grocery stores, supermarkets, and departmental stores. Shopping at stores that offer student discounts can translate to sizeable savings that can be set aside for important or unforeseen expenditures.
Deal Hunting
it is most likely that students who enter college will have to bear some big-ticket expenses, such as buying a laptop, software, internet services, etc. Fortunately, many companies offer big discounts and fantastic deals during their’ back to school’ sale, back Friday sale, Christmas sale, etc. Flashing a student ID will almost always lead to a discount on computers and software. For example, Apple offers good discounts on nearly all their products to students. Microsoft, Adobe, Google, and other companies also offer a discount on their hardware and have student subscription packs for their software. All these rebates can add up to hundreds and thousands of dollars in savings.
Buying Used
many students who graduate or progress in their programs tend to sell some of their stuff at incredibly low prices. These may include books, laptops, bags, and other articles. Those who are not particular about buying new can always consider buying used products that bring considerable savings in the overall cost of education. However, one should thoroughly inspect the goods in question and find out the market value of what is being sold before spending their money.
Swapping stuff with other students also works well for some. Trading an item that is not of use anymore with someone who has another required item will save lots of money – money that could very well be used for other purposes.
FAQs for Students looking to
Pay for College
Do you have to pay for college if you get a scholarship?
Yes and no. If the scholarship amount received is enough to cover the prescribed tuition fee, then there is no additional payment the student must make towards tuition. On the other hand, if the awarded amount falls short, the student will have to pay the difference amount through other means.
Can I get a loan without FAFSA?
Students always have the option of applying for alternative loans, which are private student loans offered by banks and financial institutions designed to help students who have been turned down for federal aid or who do not qualify. Alternative loans do not need to be repaid until the student leaves school, gets a deferment, or graduates.
What are income-based repayment plans?
Income-based repayment plans are federal student loan repayment plans in which borrowers pay back their loans based on their discretionary income. With this plan, borrowers are responsible for paying back 15% of their discretionary income.
What are deferment plans?
Deferment plans are federal student loan repayment plans in which borrowers postpone making payments. Deferments last for a certain time period and are available while the student is in school, unemployed, or experiencing economic hardship.
What are the benefits of federal loans?
Federal student loans are low-interest loans that are funded by the government, meaning students do not need to worry about repaying their debt until they graduate or if they become unemployed.
What types of jobs can I get to help pay off my student loans?
Several tax-free jobs are available to students who are burdened with student loans. These jobs include AmeriCorps, Peace Corps, and healthcare professions. Students can also take up part-time jobs on and off the campus that can help pay for their educational expenses.
Additional Resources for Students looking
to pay for College
Now that the most popular and common ways of paying for college have been covered and the question “how to pay for college” has been addressed, students should explore other means to economize and maximize their savings. While the information on scholarships and grants are usually available at the admissions office of the chosen college, here are a few resources that can help students in their pursuit to make every penny they spend worthwhile:
Microsoft Store – Student Deals
Microsoft has a dedicated store for students that offers a wide range of hardware, software, and services at substantial discounts. Students can buy online and have their purchases shipped for free and enjoy hassle-free returns, should the need arise. In addition, parents of students can also get a discount of up to 10% on select products.
Apple Education Store
Apple has an Education Store that most of its products and services at ‘education pricing’. The special prices are available to current and newly accepted college students and their parents, as well as faculty, staff, and homeschool teachers of all grade levels.
StudentBeans
Student Beans is a global student loyalty and marketing platform, connecting leading brands to an audience of over 163 million students in 150+ countries worldwide. The site offers value deals, deep discounts, partner offers, exclusive offers, and a plethora of products and services.
UNiDAYS
Unidays is a portal with the best offers only for students, provides free access to discounts in-store, online, or with their app, and instant savings on 150+ brands.
Student Aid
Federal Student Aid, an office of the U.S. Department of Education, provides more than $120 billion in financial aid to help pay for college or career school each year. This website is also the official channel to apply for the Free Application for Federal Student Aid (FAFSA) and PLUS Loans. It also provides direct and official information to students and parents on different types of financial aid.