Anyone would be spooked by the high cost of a college eduation. Whether you’re trying to put your kids through college, go back to school for an advanced degree or take some online classes to further your career, the cost is a major consideration. Fortunately there is a lot of help out there.
Grants are the first place to look for college money. Grants are available to be used for college costs, and they don’t have to be paid back like loans. They’re gifts. Grants are typically based on financial need and are available from the college itself, the government and other sources. To begin this process, you need to complete a FAFSA, or Free Application for Federal Student Aid. Information about your family’s assets and income are requested on this form. From there, the expected family contribution is calculated. It’s expected that you (or your family) will contribute at least this amount. Next you calculate the need amount. Take the sticker price of the college in question and subtract the expected family contribution as well as any scholarships you’ve received.
Grants are based on the need amount. One college might pay 10% of the need amount, while another might pay 50%. Many colleges, often state funded colleges, don’t offer much or any financial assistance in the form of grants. This is where the cost of a private college or online college education can come close to the costs of a state college.
Scholarships are college financial aid offered by many different types of institutions, and they’re usually achievement based. A student might be awarded an academic scholarship or a sports scholarship because they excel in that area. Some scholarships are available for students who major in certain disciplines or are members of a particular minority. Scholarships can range from small awards, like $500 up to a full ride. It’s a good idea to apply for multiple scholarships. Just make sure all of the funds are spent in accordance with the rules of each scholarship.
Part time jobs can go a long way toward helping with college costs. The federal work study program offers jobs on campus that can help pay for educational costs. It also has the added benefit of providing work experience. Even students who don’t qualify for that program can’t find their own jobs, usually off campus. Many private businesses have part-time job openings that work well for college students. Businesses that need employees during weekend and evening times are a good fit for students since they can go to school on weekdays and work when they’re not in class.
After a student has applied all the grants and scholarships that they can get, the remaining cost must come from the student and/or his family. Student loans are the last option if the funds just aren’t immediately available. Loans are not as good as grants and scholarships, because eventually you will have to pay back the loan plus interest. Oftentimes the student can wait until after he graduates and gets a job to begin paying back the loans. The federal government offers student loans, as do private lending institutions. The more cost effective loans are usually those that are government sponsored, because they have lower interest rates and more favorable terms. There are two types of government sponsored college loans – subsidized and unsubsidized. Those that are subsidized are based on financial need and usually carry lower interest rates. If you are able to qualify for a subsidized loan, that should be your first choice. Second is government sponsored non-subsidized loans. State and private loans are an option to bridge the gap if the other choices aren’t sufficient.
Make sure you look at the entire cost, including grants, scholarships and loans, before selecting a college. The sticker price is not the best indicator of what you’ll actually have to pay. Prospective students need to do this homework before ever arriving at school!