For many prospective college students, the most daunting aspect of entering college isn’t the academic rigor or living on their own for the first time, it’s finding ways to foot the costly tuition bill. According to the College Board, the cost of four-year public colleges during the 2009-10 academic year was $7,020. And tuition is constantly rising; that amount was 6.5 percent higher than the previous year’s amount. If you plan to attend a private college, expect to pay more than three times what students pay at public colleges. With that load of money, you could buy a new SUV or hybrid vehicle, depending on your tastes. If you tack on the cost of room and board to that total, you could upgrade to a used Beamer or Benz. Given that information, it’s absolutely essential that you come up with a financial plan for college months before you leave home. Listed below are 10 ways to pay for college – most of which are not mutually exclusive.
- Mom and Dad or Uncle Rich
It doesn’t hurt to have financially stable parents with consistently well-paying careers. If they’ve set aside money for your college career or if they can afford it out of pocket and they’re willing to cover your expenses, consider yourself lucky. Also, some students are fortunate enough to have a devoted uncle (Rich uncle; Uncle Rich) or other family member who’s willing to give or loan them money.
- Private student loans
You can obtain a private student loan through the bank of your choice if you or your parents have a decent credit score – a score below 650 typically means you’d be ineligible. These loans are often used by students to account for the difference between the amount they’re awarded in federal student aid and the total amount of money they owe their college. The pitfalls of borrowing privately are high interest rates – meaning you’ll pay more in the long run – and stricter repayment rules.
- Federal student loans
Student loans from the federal government aren’t based on your credit score and they feature fixed interest rates. That’s why most financial aid counselors advise students who are seeking loans to fill out a Free Application for Federal Student Aid (FAFSA) . Students most commonly receive money from Stafford Loans. When they’re subsidized, the federal government pays the interest while you’re in school. How much you’re awarded is based on your year in school and financial need, which is determined by your family’s yearly income.
- Federal parent loans
If your parents want to borrow, they can apply for a federal loan if you’re a dependent. The Parent Loan for Undergraduate Students (PLUS) has a fixed interest rate of 8.5 percent, and it can cover the entire cost of tuition. In most cases, PLUS loans are used in addition to federal student loans. You and your parents can apply for one by filling out a FAFSA application.
- Federal Work-Study
Another way to receive federal financial aid is through Federal Work-Study (FWS). Undergraduate and graduate students earn money directly from their schools by working on campus or off-campus. Students who work off-campus are usually employed by either a nonprofit organization or a public agency. You can apply for Work-Study by filling out a FAFSA application.
- Regular part-time job
More likely than not, there are numerous opportunities for you to gain employment in your college town. If you look hard enough, you might find a paid internship that will not only give you additional money to pay for college, but also hands-on experience that will enable you to find a good job after you graduate. Service industry jobs – waiter and waitressing jobs in particular – allow you to work with a flexible schedule and earn quick cash through tips.
Who doesn’t want free money? Federal grants are the best form of financial aid because you don’t have to pay them back. With a Pell Grant, you can receive up to $5,550 depending on your financial need, your cost of attending school, if you’re enrolled full-time or part-time, and if you’re attending school for a full academic year. This loan and other federal grants can also be obtained by filling out a FAFSA application.
Scholarships also don’t have to be repaid, and they’re typically given to students who display high-levels of academic achievement or possess athletic or artistic talent. You can search for scholarships by using the Fastweb database. You can also look for them in your community; many local organizations and businesses support students by giving them money for college. Obtaining a scholarship isn’t as difficult as it may seem. There are numerous opportunities for all kinds of students and you don’t have to be genius to get one.
- Military aid
The Montgomery GI Bill covers roughly three-fifths of average tuition costs. The award is determined by the length of time you serve, cost of tuition and cost of housing, books and supplies. Of course, in order to participate in military service it takes a strong commitment, and you shouldn’t join just to pay for college.
- Dig into a savings account
Why not break open your piggy bank and use that money on something that’s truly rewarding? Nothing is more important than your education, and sacrificing some of the savings you have tucked away for college will result in greater lifetime earnings and an all-around happier life.