Paying for College
With the price of admission rising every year at universities around the nation, you’re probably worried about how you’ll afford to pay for college. But no matter your family’s financial situation, you can almost always find a way to fund your education. Between scholarships, grants, student loans, saving in advance and part-time work, a college education is within your reach! And even though you’re still in high school, there are a few things you can do now to prepare.
CALCULATING THE COST
One of the most important steps in preparing is to understand how much an education will cost. When figuring out your expenses, factor in the “net cost,” which includes tuition, fees, room and board, books and all sorts of other personal expenses, less the amount of “gift aid,” such as scholarships and grants you don’t have to pay back. (All college websites are required by law to have a net price calculator.)
The nonprofit College Board reports that the average cost of tuition and fees for the 2014–2015 school year was $31,231 at private colleges, $9,139 for state residents at public universities and $22,958 for out-of-state residents attending public universities.
Here’s the good news: The average private school student received $18,870 in grant aid and tax benefits, while the average public college student received $6,110 per year in grant aid and tax benefits. This drives down the net cost, which then can be partially or fully covered by scholarships and loans.
Tuition and school fees combined account for roughly 70 percent of the total cost of education. Room and board, if you choose to live on campus, account for around 20 percent of a total student budget.
The remaining 10 percent of college expenses come from transportation, books, incidentals (e.g., cell phone and clothes) and entertainment. Because, let’s be honest, even though you’ll be studying hard, you’ll still want to have fun!
SCHOLARSHIPS AND GRANTS: LOOK FOR AS MUCH FREE MONEY AS YOU CAN!
If you want to help your family’s quest to make college more affordable, nothing can beat scholarships and grants. Unlike loans, which need to be paid back, scholarships are free money! While many scholarships are based on academic merit, there are others available for specific talents, interests or majors, as well as ones that are need-based.
You can start preparing to get scholarship money while you’re still in high school. As a first step to preparing to pay for school, Tracey Lehman, director of financial aid at Oregon Institute of Technology, recommends that high school students focus on doing well in school, given how many scholarships are merit-based. “Get involved in activities, since being an active, well-rounded student will assist in your scholarship applications,” she says.
Pam Macias, director of financial aid at Point Loma Nazarene University (CA), notes that your first three years of high school are crucial for racking up good grades and activities that will give you an edge for scholarships.
Most scholarships are available through the college where you enroll, as well as through private organizations. However, don’t wait until you start applying to colleges to find out what’s available.
“You can Google just about anything in addition to using some standard websites,” suggests Macias. (See sidebar for more information on scholarship suggestions.) “However, don’t pay anything to apply for scholarships,” she cautions, adding that there are lots of scammers out there willing to charge you $1 or $5 to apply. She recommends looking for local scholarships through the Kiwanis and Rotary clubs and businesses, since they often prefer to award their aid to the “local kid.”
Like a scholarship, a grant is essentially free money and that you don’t need to repay. A majority of grants are need-based and therefore given to students because of their family’s financial situation. The federal and state governments, as well as some individual colleges, award grants. Common grants include the Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant. To get a federal grant, you’ll need to fill out the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov after January 1 of your senior year of high school to see if you qualify for aid during the following year.
Another option to consider down the road is work-study, a program that is part of your financial aid package and provides students a way to work part time and earn some extra cash, advises Summer G. Nance, assistant vice president for financial planning at Gardner-Webb University (NC). “Schools administer the program different ways, but typically work-study money goes directly to the student. It’s a great way for students to get connected to their school and also provides some real-life experience.”
WHY LOANS CAN SOMETIMES BE A GOOD THING
At the outset, you may be borrowing more money for college than you could ever imagine paying back! But the investment is a good one, because a college education, no matter what background you come from, is a path to future success.
There are many options for taking out student loans. You can apply for federal student loans, such as the Perkins, Stafford and PLUS loans, by filling out the FAFSA. You also can take out a loan through private lenders.
Many banks and private lenders offer student loans. Macias recommends that prospective students see if the school has a “preferred lender” list on its website or ask other parents and students for recommendations. Shopping around is a must.
PUTTING IT ALL TOGETHER
Hopefully you can get most (perhaps all!) of your college education paid for by scholarships and grants. However, you may need to supplement it with federal and/or private loans.
But with the increased availability of loans from private lenders, students need to do some research to compare the long-term burden of those loans.
Of course, you need to consider your own personal circumstances and discuss how much you should borrow with your parents and/or a financial adviser. It’s not to be taken lightly; about three-quarters of students from private, nonprofit colleges graduate with debt. On average, graduates are walking away from college with $29,400 in debt, according to a March 2014 report from The Institute for College Access & Success.
“It’s important for students and parents to look at the ‘bottom line’ when comparing institutions, especially if finances are a concern,” Nance says. She recommends that students visit the Net Price Calculator Center on the Department of Education’s website (www.collegecost.ed.gov/netpricecenter.aspx), which will allow students and parents to see what their financial aid estimate would look like and give them an estimate of their out-of-pocket costs.
Ultimately, your future is in your own hands. Devoting just a little bit of time during your sophomore year to researching what colleges are best for you, and how you can pay for them, will pay off enormously in the end. You deserve a great education, and with so many financial aid opportunities, the right college, at the right price, is waiting for you.
Average grant aid and tax benefits
$18,870 private college
$6,110 public college
SHOW ME THE MONEY! Four Places You Didn’t Know You Could Find Scholarships
- YOUR SCHOOL GUIDANCE COUNSELOR
He or she can be a great resource for local organizations that are offering scholarships. Now is the time to sign up for newsletters so you can check out potential opportunities.
- YOUR PARENTS’ JOB
Many companies have scholarship money reserved for employees’ children. Check with the human resources department.
- COMMUNITY GROUPS
Research opportunities through the Rotary Club, Kiwanis Club, Chamber of Commerce, local youth sports organizations, professional groups for your intended major, churches, synagogues and foundations.
Several websites catalog a huge variety of scholarships for which you might be eligible. Some to check out are: Fastweb.com, Scholarships.com, Finaid.org, Bigfuture.CollegeBoard.org and StudentScholarshipSearch.com and unigo.com.