If you’re considering college, great! College education can open up innumerable doors. It’s not for everyone, but, depending on the field that you want to work in, a college education might be required. For example, most healthcare positions, lawyer, engineer, computer scientist, accountant, or another specialized field, almost always require a specialized college education. If you just want to get an education but aren’t sure what you want to do, college can help you find it. Education has tremendous value inherent in itself.
That being said, college expenses have gone up. In some cases, way up.
College isn’t a cheap decision. It can cost hundreds of thousands, take many years to complete, and requires focus and dedication that can stress and strain even the toughest among us. There’s a good chance you’ll accumulate debt while going to college, no matter your chosen field of study.
But, on the bright side, there are ways to pay for college and be smart about it. There are a number of steps and choices to make if you’re in a place in your life where college is an upcoming option. Many high school seniors begin looking for financing choices before they apply to schools; it’s a smart idea to do so. Even for those pursuing secondary school long after, financial decisions need to be reflected on and the best choice picked by what suits your personal situation best.
It all starts with choosing an affordable school. If you don’t have grants or scholarships (more on these later), then you’ll want to pick a school that has your degree program while also being affordable. Affordable doesn’t necessarily mean cheap. Just because a school costs less than another choice doesn’t always indicate you’ll receive an inferior education. Sometimes it really is just name and reputation racking up those bills at the nicer schools.
Part of picking an affordable school is determining ahead of time what your needs and goals will be. Often, a community college or trade school will offer degree programs that might be more in line with what you want to do. If you decide a four-year school is what you’ll need, then consider picking one that is more generous with aid. Just because the price may be higher doesn’t necessarily mean the school will end up being more expensive. For instance, if a more expensive school offers more aid than a cheaper school, it can often work out that the school with the higher sticker price is actually a better deal financially in the long run than the school that seemed cheaper.
Once you’ve settled on a school and you know what your investment will be, you can fill out the FAFSA (Free Application for Federal Student Aid). Submitting a FAFSA puts you into a pool of applicants eligible to receive such benefits as grants, work-study opportunities, student loans, and state and school-based aid. There are varying ways the financial aid is distributed; some schools award on a first-come, first-served basis. You’ll want to fill the FAFSA out quickly and accurately and submit it ASAP. You can fill out the FASFA as early as October 1st of the prior school year. It is a great idea to fill it out as early as possible.
If you’ve filled out the FAFSA, you might in turn qualify for the Pell Grant program. Pell Grants are monetary grants to students from low-income families who want to attend college. Pell Grants help these students pay their way as undergraduates, with maximum amounts set by the federal government and subject to change each year. For instance, the maximum for 2021-2022 is $6,495 over the academic year. Your financial need is determined by the information you fill out on the FAFSA. The higher your need, the higher your Pell Grant distribution.
Pell Grant amounts awarded are determined by:
- The Expected Family Contribution, which is the amount the federal government estimates you and your family can pay for college
- The cost to attend your chosen college
- Whether you’ll be a part time or full-time student
- Whether you’re attending school for a year or less
There are a few changes being made to the Pell Grant program in 2023-2024 and going forward. These changes restore eligibility for:
- Students who can’t complete their degree because of their school closing
- Students whose loans were discharged under borrowers defense claim
- Students who are incarcerated
One of the biggest advantages of the Pell Grant is that you don’t have to pay it back, unless your financial status changes while receiving the money, in which case you simply give back what Pell money you’ve already been given. You also have to maintain enrollment in an undergraduate course of study. If you end up having to repay part of your Pell Grant, your school will notify you, in which case you have 45 days to arrange payment. If, however, you don’t pay the amount back or make arrangements to do so, you will be disqualified from receiving any federal student aid in the future.
It’s important to remember to fill out the FAFSA every year that you’re in school. Billions in federal Pell Grant money are left unclaimed every year. If you renew your FAFSA each year you’re enrolled, you’ll receive Pell money if you’re eligible for it. Consistency will be key here; stay up to date on the details and don’t slack if you want to get the biggest bang for your buck on grant money.
If you don’t fill out the FAFSA or don’t qualify for a Pell Grant, there are other ways to pay for your degree. One of the most common is to apply for scholarships. There are thousands of potential scholarship opportunities, and millions of dollars’ worth of education is divvied out each year through this method. If you’re in high school, start applying early—don’t wait for your senior year. Use a scholarship search tool to find relevant opportunities for yourself. Scholarships, unlike student loans, do not have to be repaid. Scholarships often have GPA and other scholastic requirements, so be aware of those before you apply and budget with that potential money.
A work-study program can help you save money while pursuing your education. A work-study program can be a great way to learn on the job while also making valuable connections. The federal work-study program funds part-time jobs for college students in need of financial assistance. A work-study is applied for on the FAFSA. You’re not automatically eligible for work-study funding. To earn it, you’ll have to find an eligible work-study program on your campus and work enough hours to be awarded the federal money.
If you have the means, paying for college with savings or while working is a common option. Monetary “loans” from family and friends, or from online avenues like GoFundMe or Kickstarter, are also ways to pay out of pocket for college education. In this method, it is absolutely vital to keep careful track of a budget and your finances. College can be very expensive, and racking up debt or over spending isn’t hard if you’re not paying close attention to where the money is flowing to. Sometimes, if your parents are helping to pay for it out of their savings, they can arrange a 529 money savings plan. This is a state-sponsored tax-advantaged college investment account. You can access these funds by contacting the plan’s administrator.
Funding college in these ways has advantages and disadvantages. One of the biggest disadvantages is the rising cost of college. What used to be manageable to be paid out of pocket or with grants and scholarships has become more and more unwieldy without aid. Federal student loans are available with different terms, repayment rates and time frames, and for various programs. Look for student loans that don’t exceed 10% of projected after-tax monthly income your first year out of school. This will help you financially in the long run.
The last option is one of the most well-known, and it’s the one to be avoided if at all possible. Private loans should always be considered a last resort. Before you even consider it, make sure your degree is needed for what you want to do. Ensure your chosen school is right for you, and that you can finish the degree you are pursuing and that it has a chance of paying off whatever you borrow to cover it. Make sure the lender is verified and known; look for the lenders with the lowest interest rates, flexible repayment plans, some generous borrower protections. Make sure the lender offers the ability to put your loans in forbearance if you’re unable to make the payments.
Student loans are infamous these days, not only for being rampantly used, but also for being occasionally predatory. Millions of students have gone into unmanageable debt because they didn’t examine the terms of lending closely enough, or they didn’t finish their degree and now have debt that accumulates interest that must be repaid. Sometimes, the career you’re choosing doesn’t require college, and the money from a loan could be better spent elsewhere. No matter what you borrow, you have to repay it, interest and all. There are student debts that can take decades to pay off. Use a student loan calculator to see how much you’ll owe later based on what you borrow now.
There are some loan forgiveness programs based on your field of work. You should examine current programs closely to see if they apply to your situation. There are many stories in the news about the growing amount of student loan debt. It’s a known problem, but how the problem will be addressed is unclear. That being said, pay close attention to the changing landscape around college funding as you make your decisions about education.
No matter what your chosen college degree program is, there is a way to fund it. Options range from personal to governmental, and vary considerably based on income, location, and scholastic factors like grade and course study. Scholarships can pay for one class all the way up to an entire four-year degree. Your savings might cover some or all of it. The one thing to remember for any option is to budget wisely and pay attention to the details. Never forget to read the fine print.
