Your college education can be one of the biggest expenses of your life, as well as one of the most rewarding experiences. After assessing how much you and your family can contribute, you might determine that additional funds are necessary. Consider the following options to help you reduce the financial burden of earning your degree:
Apply for scholarships and grants
Getting scholarships or grants for college is a great option for students preparing for college because you don’t need to pay them back after graduation. These resources are popular among students, with 88 percent of freshmen at private universities getting scholarships or grants in 2011. The government, your college, or a local organization can offer you a scholarship, while the government alone can determine your eligibility to get grants for college based on your Free Application for Federal Student Aid (FAFSA). You’ll need to complete a FAFSA form if you plan on applying for grants, federal student loans, or federal work-study.
Apply for loans
Many students rely on loans to help fund their education. This can be a good way to get the funds you need, but be sure to understand what you’re signing up for. There are primarily two types of loans: those issued by the Federal Government and those issued by private lenders like banks and other financial institutions. There are several types of government loans that differ based on who qualifies, what they cover, and how they charge interest.
- Federal subsidized loans are awarded based on financial need, and recipients are not charged interest until the loan enters repayment. The government subsidizes the interest on the loan while the student is in school and during most deferments. Federal unsubsidized loans start accruing interest as soon as the funds are disbursed. Borrowers will be responsible for paying all accrued interest. Federal loans generally are not awarded based on the credit of the borrower.
- Private loans differ based on the financial institution that issues the loan. Private loans most often look at the creditworthiness of the borrower. The rates are different than Federal loans, so you should do your research. A cosigner, who is equally responsible for the private loan, is often required and may help you qualify for a lower interest rate.
For the 2011-2012 academic year, 34 percent of students ages 18 to 24 took out federal student loans to pay for college, while 10 percent took out private student loans. When taking out loans, remember to:
- Review your loan’s interest rates, conditions and repayment terms
- Only take out as much money as you need
- Create a plan to help you repay your loans as quickly as you can, even paying interest while you are in school, if possible.
If you’re interested in working part-time during college, you may want consider a work-study program. Federal Work-Study (FWS) programs let you earn money from a community service position or a job related to your field of study, with the funds going toward educational expenses. Work-study jobs usually require you to work 12-20 hours per week, and the pay starts at minimum wage with some positions earning higher amounts.
To help determine your funding needs, consider using an online calculator to assess your situation. College is expensive, but understanding your options ahead of time can help you pay for your education.