Things Every Family Should Know About Paying for College

piggy bankCollege tuition is on the rise, it has always been on the rise and for those that do not or did not plan ahead there is going to be debt and a lot of it. The average student graduating between 2014 and 2020 should expect to owe $30,000 or more before their sheepskin is hanging on the wall. It is important to get the best possible financial aid package and spend wisely for those magical four years.
Here are the BIG five things students should know about getting a good financial aid package.
1. Fill out the FAFSA early
FAFSA is the Free Application for Federal Student Aid administered by the U.S. Department of Education. It is the first step in applying for government funding and financial aid and required by almost every university in the United States. FAFSA is the gateway to over $100 billion in federal and state government aid, and a requirement to land billions more that is available in university funding. FAFSA determines your family’s financial situation and “expected family contribution” when students attend college. Because state and university funding is generally allocated on a first come first served basis, it is critical to complete your FAFSA as soon as possible. You can find your state’s deadline here.
2. Call or visit the financial aid office and make friends with a counselor
Only a counselor will know exactly what is available to you in the way of university aid. A large portion of university grants and scholarships are not well publicized so be aggressive when looking to see what is available to you. Remember, financial aid officers are people, and they are often not treated well by students and parents – the nicer you are the more help they will provide you.
3. Do not fear taking out student loans, take subsidized federal loans first
There are different type of loans available to you as a student. The Perkins Loan is the most borrower-friendly available; funding is interest-free while the student is enrolled full-time and only 5% thereafter with a 10-year repayment window. Students are eligible for up to $5,500 in Perkins Loans per year and apply through the campus financial aid office.
The subsidized Stafford Loan is another choice for borrowers. Those qualifying can receive $3,500 toward college expenses in their freshman year, along with additional sums in their sophomore and junior years. Once the subsidized loans have been exhausted, students can also apply for unsubsidized Stafford loans. The only difference is that with unsubsidized loans, the 6.8% interest continues to accumulate while you’re in school, though payments do not begin until six months after graduation. One can borrow up to $27,000 over four years from the Stafford program by combining subsidized and unsubsidized loans. Only after maxing out the Perkins and Stafford federal loans should students look to private lenders, which generally charge higher interest rates and employ less forgiving repayment policies.
4. Apply for student employment under the Federal Work Study program.
When you fill out your FAFSA, be sure to check off that you want Federal Work Study. You don’t have to take it but if you don’t check this box you will not be awarded this money. Federal Work-Study enables qualifying students to earn money by working part-time on campus. There are a wide range of jobs available on most college campuses, choose wisely. Try to find a student job that is aligned with your degree or ultimate job goal. It is wise to align your job search with your career goals to begin building relevant work experience and skills. Unlike other income sources, Work-Study employment will not diminish eligibility for future financial aid. As with any job, doors will open for you if you treat every day at your student employment job as if that is the day your supervisor is going to use to write your letter of recommendation.
5. Consider community college credits first
For most students, the cost of college can be reduced drastically by taking a portion of their courses as a community college. If money is a real concern, consider the attending a community college for the first year or two. Not only can it help financially but it may help focus your goals and prepare you to complete your degree with purpose. For many high school students, a dual enrollment is an option that allows some high school courses to be exchanged with community college courses. Many students can now earn their Associates Degree and high school diploma at the same time.