Congratulations! You've decided to continue your education at a college or career school. Whether you are a traditional student seeking a certificate or an adult looking to earn a Ph.D., one big question you have is, "How am I going to pay for college?" The problem may seem even bigger if you have a job and a family; money is tight these days, and few people have the extra cash on hand to pay for tuition and the other costs associated with higher education.
There are four basic ways to pay for college:
1. write a check;
2. get gifts of money from other people;
3. borrow money;
4. earn money.
You don't have to be a rocket scientist to see that option #2, "get gifts from other people," is a sweet deal. Many students are able to create a financial plan with elements of all three methods.
The U.S. Department of Education provides information about college funding options; here are a few highlights:
Scholarships
It is possible to get gifts in the form of scholarships. A scholarship is a gift of money from an organization or an individual to a deserving student. Examples of scholarships given to graduating high school seniors include scholarships from civic organizations such as the Rotary Club or the local Chamber of Commerce. Colleges also award scholarships to selected students; this is an example of institutional financial aid. Colleges determine scholarship awards when your annual financial aid package is determined, and at the end of the school year when academic scholarships are awarded to outstanding students.
Scholarships are generally merit-based. This means that the eligible student must have attained a certain grade point average. Scholarships can be awarded within defined academic areas, such as a scholarship for the outstanding chemistry student or for the top French student. There are also many athletic scholarships awarded to outstanding athletes.
Scholarship awards may also be based on other criteria including financial need, ethnicity, or even the geographic location of the student's home.
How do you find scholarships? Ask at your high school guidance office, or the college admissions or financial aid office. Search online; there may be some for which you are eligible. Some scholarships require that you apply, while others are awarded by a decision of a committee and no applications are required or accepted.
Grants
Like scholarships, grants are also gifts that do not require repayment. They are usually based only on financial need. Grants typically are awarded by federal and state governments and individual colleges.
Available federal grants include:
o The Federal Supplemental Educational Opportunity Grant (FSEOG) is awarded to undergraduate students with exceptional financial need.
o Pell Grants, which are awarded to undergraduate students.
o The Academic Competitiveness Grant (ACG) is awarded to qualified college freshmen and sophomores who are eligible for Pell Grants and who took college-level classes in high school.
o The National Science and Mathematics Access to Retain Talent Grant (National SMART Grant) is awarded to outstanding college juniors and seniors who are eligible for Pell Grants and are majoring in engineering, mathematics, technology, a foreign language critical to national security, life or computer sciences.
o The Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) is for students who plan to teach in schools that serve low-income students.
For complete information on how to apply for federal financial aid, log onto the Free Application for Federal Student Aid website at http://www.fafsa.ed.gov/.
Loans
When paying for school, option #3 is loans. A loan is a contract to borrow money and repay it over time, with interest. You want a loan with a low interest rate. Loan types range from charging your credit card (very high interest-not advised!) to getting a federal loan (low interest-a very good deal). Most federal student loans do not require you to begin repaying them until after you leave college or are no longer enrolled at least half-time.
Millions of students take out federal student loans: every year, more than $70 billion in federal student aid is given out in the form of low-interest loans. To learn more about federal student loans, read Federal Aid First, an online brochure from the U.S. Department of Education. Go to http://federalstudentaid.ed.gov/federalaidfirst/.
The next best deal is student loans from banks or financial institutions. These loans often have variable interest rates, require a credit check and may not provide the benefits of federal student loans.
Your last resort for borrowing money is your credit card: you will pay the same high interest rate as if you had bought a new home entertainment system or a fur coat.
Work-Study
A good alternative to borrowing money is to earn money through the Federal Work-Study (FWS) program, which provides part-time jobs for students with financial need. More than 3,400 schools participate in the Federal Work-Study program, and in a typical year over 800,000 students are given work-study jobs.
The program is administered by participating schools. If you qualify, the school offers you a job on campus, one related to your studies, or in the community. A portion of your paycheck is withheld to help pay your tuition, and you get to keep the remainder.
Other Sources of Aid
Organizations that assist students to pay for their education include the U.S. armed forces. Reserve and active duty service personnel and veterans may be eligible for benefits under the Montgomery GI BILL-Active Duty (MGIB-AD), Montgomery GI Bill-Selected Reserve (MGIB-SR) or the Reserve Educational Assistance Program (REAP). Other organizations include AmeriCorps community service organization. Check with federal, state, and local agencies for more information.
Tips for Finding and Saving Money
o See if you are eligible for an athletic scholarship, if you have excelled at high school varsity athletics.
o Consider a state school in your state. Most state colleges and universities offer lower tuition to in-state residents.
o Go to a lower-cost community college for one or two years, and then transfer to a four-year school.
o Live at home while attending a local college. You could save thousands of dollars.
o Check out online programs. You could save big money and earn your degree on your own schedule--even while you continue to hold down your present job or keep up with family responsibilities.
The very first places you should look for education finance programs are at the schools you are interested in attending. Log onto a reputable college directory website. Select the colleges or career schools that interest you. Check out their financial aid pages and compare the programs offered--you'll be sure to find the plan that works for you!
