Getting Educated About School

College is one of the best choices a young person can make for their future. From career opportunities to the inherent worth of education, there are numerous benefits to attending a university after high school.

College expenses, however, have gone up. In some cases, they’ve gone far up.

College can be a very expensive decision. It can cost hundreds of thousands of dollars, take many years of your life, and requires focus and dedication that can stress and strain even the most patient and studious. There’s a great chance you’ll accumulate debt while going to college, no matter your chosen field of study.

There are ways to pay for college and be smart about it. Steps and choices exist 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 wise strategy. Financial decisions need to be reflected on and the best choice picked by what you can and cannot manage in your individual life.

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 isn’t synonymous with cheap. Just because one school costs less than another doesn’t 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 are. Often, a community college or trade school will offer degree programs more in line with what you want to do. If 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 cheaper. For instance, if a more expensive school offers more aid than a cheaper school, it might factor out that the school costing more on its face is actually a better deal financially in the long run than the school that seems cheaper in its sticker price.

Financial Aid Options for Every Student

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 benefits such as grants, work-study opportunities, student loans, and state and school-based aid. The FAFSA is distributed in varying ways; some schools award them on a first come, first-served basis. You’ll want to fill the FAFSA out quickly and accurately and submit it as soon as you can.

If you’ve applied for the FAFSA program, you might 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. The maximum for 2022-2023 is $8,370 over the academic year. Your financial need is determined by the information you fill out in the FAFSA. The higher your need, the higher your Pell Grant.

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

A few changes being made to the Pell Grant program to determine eligibility for 2023-2024 are:

  • Students who can’t complete their degree because of their school closing
  • Students whose loans were discharged under borrowers defense to repayment
  • 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 give back what Pell money you’ve already been given. You must 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; you then have 45 days to arrange payment. If you don’t pay the amount back or arrange to do so, you will be disqualified from receiving any federal student aid in the future.

Remember to apply for FAFSA every year that you’re in school. Billions in federal Pell Grant money are left unclaimed each year. If you renew your FAFSA every year you’re enrolled, you’ll receive Pell money if you’re eligible. Consistency will be key; stay up to date on the details and don’t skimp if you want to get the biggest bang for your buck on grant money.

If you don’t apply for 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 scholarships, and millions of dollars’ worth of education is allotted 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 requirements, so be aware of those before you apply.

 A work-study program can help you save money while pursuing education. A work-study program can be a great way to learn on the job while 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 always applicable 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, keep careful track of a budget and your finances. Racking up debt or lost money isn’t hard if you’re not paying close attention to where the money is going. 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 unwieldy without aid. Federal student loans are available with different terms, repayment rates and time frames, and for varying programs. Look for student loans that don’t exceed 10% of projected after-tax monthly income your first year out of school.

The last option is one of the most well-known, and it’s the one to be avoided if possible. Private loans should always be considered a last resort. Before you 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, generous borrower protections. Make sure the lender offers the ability to put your loans in forbearance if you’re unable to make the payments.

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 degree you’re choosing doesn’t require college, and the money from a loan could be better spent elsewhere. No matter what you borrow, you must 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. While there has been talk of student loan forgiveness, nothing has yet occurred, and loan repayments will be due to start again very soon.

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. Learning financial strategies now can pay off big in the future.