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Funding Your College Education — On Your Qwn!
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A college education can cost tens of thousands of dollars. The price may be daunting, especially if you have no help from parents, trust funds, or inheritances. And of course, these sources of funding simply aren't available to some students. But it is possible to pay for college all by yourself. All it takes is some research and a lot of leg work. This guide provides the ins and outs of finding money to pay for college.
Determine the Cost of Attendance
Each college or university calculates the cost of attending that particular institution. Do not make the mistake of ignoring this all-important number. Cost of attendance is a large factor in determining not only how much you'll have to shell out each year, but also how much aid you'll receive.1 First, the school you'll be attending will determine the cost of attending, and this information is usually posted on the institution's website or is sent to you in the form of an offer letter. The cost of attendance is then compared to whatever aid the institution is offering in the forms of scholarships or grants. The difference is what you'll have to make up using different sources of funding.
Fill out the FAFSA
The federal government has gotten at least one thing right: the FAFSA (Free Application for Federal Student Aid)2. The FAFSA is the single application you'll need to apply for federal grants, loans, and work-study funds, as well as to submit your financial information to the school you'll be attending. By entering your personal information, your financial information, your parent's financial information, and your school information, the government and your school will determine the amount of financial aid you'll receive.
Federal Grants
Grants are the best! Grants are free money. You never have to pay back a grant. So it's in your best interest to get as many grants as possible. There are four types of federal student aid grants:
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grants (FSEOG)
- Academic Competitiveness Grants
- National Science and Mathematics Access to Retain Talent Grants (National SMART Grants)
Grants are awarded depending on, that's right, cost of attendance (COA) and your expected family contribution (EFC)3, as well as other factors specific to each type of grant.4 The amount of each grant also varies according to program and academic year.
| Grant |
Award Amount |
| Federal Pell Grants |
$400 to $4,050 |
| Federal Supplemental Educational Opportunity Grants (FSEOG) |
$100 to $4,000 |
| Academic Competitiveness Grants |
$750 to $1,300 |
| National Science and Mathematics Access to Retain Talent Grants (National SMART Grants) |
$4,000 |
State Grants
State grants are similar to federal grants in that the funds do not have to be paid back and are largely awarded based on need. To make applying easier, state grants can be applied for using the same FAFSA form students fill out and submit to apply for federal funding. Each state's program requirements vary, so it's best to research your individual state. Check out this example of a state grant.
Scholarships
Scholarships are an excellent source of free money and, unlike federal and state grants, can be for larger amounts. Some can even pay for your entire education! However, scholarships are largely academically-based and require essays, transcripts of grades, recommendation letters, and other indications of academic accomplishments. But don't let all that work stop you. Scholarships are free money, and the award amounts can be several thousand dollars. Plus, you may find niche programs, such as scholarships for minorities or those entering a specific field.
Check out EdFed's comprehensive scholarship search, which lists virtually every scholarship in the country, to find free money for school.
Federal Student Loans
After you've exhausted all your sources of free money, the next best thing is federal student loans. Federal student loans carry low rates, student-friendly deferment and forbearance options, and flexible repayment plans. There are several types of federal student loans, and it's best to investigate the terms of each5.
Types of federal student loans:
- Federal Perkins Loans
- FFEL Stafford Loans
- Direct Stafford Loans
- FFEL PLUS Loans
- Direct PLUS Loans
Although federal student loans do have to be paid back, the interest rates are low and you can even consolidate to get a lower monthly payment.
Private Student Loans
Private student loans are the last resort. While private student loans may give you more money that federal student loans, the interest rates are high and the terms not much different than your typical consumer loan. However, they are out there and can provide you with the funds you need to round out your financial aid package. Be wary of what you sign and always read the fine print. Ask about origination fees, repayment fees, fixed vs. variable rates, repayment terms, deferment options, and anything else you can think of. It may be well worth your time to scout out scholarships during the summer between high school and your freshman year rather than to take out a private student loan at 15%! You might miss some lazy days at the beach, but you could save thousands on interest.
Tips to Avoid Financial Catastrophe
It may be easy and even tempting to borrow more in student loans than is necessary. Keep in mind, though, that any money you borrow is money you'll have to pay back, with interest. Do not make the mistake of over-borrowing. While in school, live within your means. Only borrow to pay tuition. Look for used books and share with friends. Public transportation can be just as good as a brand new car. It takes a little sacrifice during your college years to reap many rewards, such as financial freedom, in the future.
It may be tedious work, but finding every possible source of free money, and then relying on federal loans, to pay for school is the best way to pay for your education and graduate without mountains of debt.
1 For more information on how cost of attendance and financial need is calculated:
www.ed.gov/offices/OSFAP/fsacoach/lesson7_4/7_4_1.html
2 www.fafsa.ed.gov
3 For definitions:
www.studentaid.ed.gov/students/publications/student_guide/2007-2008/english/importantterms.htm#efc
4 For more information on each type of grant:
www.studentaid.ed.gov/students/publications/student_guide/2007-2008/english/typesofFSA_grants.htm
5 For details on federal student loans:
www.studentaid.ed.gov/students/publications/student_guide/2007-2008/english/typesofFSA_loans.htm
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Article Title : Funding Your College Education - On Your Qwn! |
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