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How Do I Pay For College?

How do I pay for college?

“How do I pay for college?” A familiar question asked by college students I visit with. Aside from what you’ve heard and what is widely accepted, I’m not aware of new and unheard of ways to pay for college. Funding your education takes understanding your options, discipline, and often, help from others. Students who have developed academic and financial plans are more likely to be prepared for their college experience and graduate debt-free. There are four ways to pay for college.


Apply for Federal Aid

Everyone has different backgrounds and financial situations. Some individuals have family members who have saved for years to assist their children/grandchildren through college. Others, who come from a financially difficult background, don’t have the opportunity to attend college without the help of grants. The government issues billions of dollars in grants and awards each year to deserving college students seeking a degree to provide them an opportunity to graduate with a higher education diploma.


Whether you believe you will qualify for federal financial aid or not, complete theFree Application for Federal Student Aid (FAFSA). $2.9 billion in federal grant awards were unutilized in 2014 because 50% - 60% students didn’t complete the application. If your parents claim you on your taxes and you don’t qualify for a federal pell grant, you can still qualify for federal loans. You may also qualify for a work study program that will help cover the cost of your tuition.


Pell grants don’t have to be paid back. It is free cash and it is worth your time to complete the FAFSA each year before the deadline. In the past, January 1st was the first day you could complete the application for the upcoming year. However, starting in 2016 you can complete it is as early as October 1st.


Apply for Scholarships

Being a recipient of scholarships takes educating yourself, getting involved, and doing well academically. You may think, “scholarships are too difficult to obtain because I am not involved or don’t have outstanding grades.” However, how are you going to know if you don’t apply? Each university has clubs and campus jobs that will open up to plenty of scholarships.


Your essay is what will set you apart. How can you make your scholarship essay stand out? Scholarship judges have written books on why they pick one essay over another. “How to Write a Winning Scholarship Essay” was written by judges that will educate you as to what will set you apart. A few bucks and a few hours of reading could pay off in thousands of dollars in scholarship money.


Where should you look for scholarships? For national scholarships check out and also These are national scholarships and are very competitive but the more you apply for the better your chances. Keep in mind there are a lot of scams out there.


Check with your major department to discover what scholarships are available. Many departments have one general application that will be applied to all of the scholarships within that department, saving you a lot of time and headache. Another way to find scholarships is to talk with local companies, a family member's company or perhaps a company you work for.


Finally, some scholarships are awarded on a financial needs basis. If you don’t complete the FAFSA, you can count those out. Scholarships take effort but are well worth it when you don’t have a tuition balance due.


Work/Family Contribution

College requires hard work and sacrifice, by you and your family. If you parents or someone close to you decides to fund your education, great. Don’t be brainless with what you have been given and strive to live a frugal lifestyle and work to cover the basic necessities.


For some, being in school would not permit them in any way to work at the same time. Others are able to work 20 - 40+ hours a week and still able to work in a full-time school schedule. I do not assume that everyone comes from the same background or is in the same situation. However your background or situation looks, don’t take on any more debt that you absolutely need. (Unless you can be really smart about it and it will prove to be a future economic benefit for you). National studies have been done that indicate students who work less than 20 hours per week, on campus do as well as (if not better) academically than their non-working peers. In other words, it is beneficial to have a healthy work/school balance in college. Use the money from your part time job to cover your basic necessities and strive to save money for the future.


Whether you work or not, live off loans to cover things such as food and gas, these purchases would be astronomically more expensive for you in the future than it would if you were to pay them at the time of the transaction.


Student Loans

After you have exhausted each of the previous steps and it comes down to your last resort, you may have to consider taking out a student loan. If you complete FAFSA, you will have a certain amount of funds available each year in different government loans.


The first one you would want to use is a direct subsidized loan, meaning the loan does not accrue interest while you are in college.You will have a six month grace period after graduation. Ideally you would hope subsidized loans will cover all your costs. However, in the event you need more than a subsidized loan, the unsubsidized loan is next. These loans accrue interest the moment you accept them and are also deferred six month after graduation. For both Subsidized and Unsubsidized Stafford loans, your lender will be the federal government, under the Direct Loan Program.  The government will assign a third-party agency to service the loan(s). A student loan is a serious and significant financial commitment. Carefully review the published repayment benefits before borrowing any student loan amount, and review, obtain, or print any repayment benefits and legal notices to keep as part of your records. You will be paying anywhere from 3.76% to 6.31% plus any organizations fees. Each loan has different requirements and exceptions, so it is important to talk with someone from the Personal Money Management Center or the Financial Aid Office about the fineprint of the loan.

As a final option there are always private loans from banks and other lending companies. If you need more funding outside of grants and government loans, you can visit: FastChoice for possible options. This is an awesome tool to help you find private loans for your personal situation. Keep in mind that private loans may ask to see your credit score and may require some other information. If you have a credit score within 750+ you are more likely to have a better loan option. If not, no worries, there are many loans out there for fair to good credit scores. If anything, the best option is to check out your current bank or credit union.


Aside from applying for federal aid, scholarships, contributing yours or family funds, and borrowing money to finish your education, there aren’t too many ways to fund it. Be careful not to take on more of a burden than you can handle. Going into hundreds and thousands of debt may be a good idea if your annual income in your field will allow you to pay off the loans quickly. However, for the most part going into hundreds and thousands of dollars in debt can be a bad idea if you are going to pay student loan payments for the next 600 months of your life.


For some, it becomes too much of a financial burden that they may be stuck with. Even in the case of bankruptcy, your student loans will not be forgiven. So be smart, live frugally, and work hard now and after college. You will still have your own financial challenges, but they will be less of a burden because your education is payed for.  

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Last Updated: 12/12/23