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There is no way around it, college is a huge expense for students and parents. Still, the benefits of entering the workforce with a college degree far outweigh the costs. College is an investment. For most families, paying for college is a team effort between the parents and the student. From savings and financial aid to scholarships and loans, it’s essential to consider all the college funding options to help you earn your college degree.
Understanding the various college financing options can make this process more manageable. This guide explores seven options about how to pay for college. The first place to start is with free money.
1. Use Free Money First: Grants & Scholarships
Start With FAFSA
When paying for college, filling out the Free Application for Federal Student Aid (FAFSA) is crucial for accessing grants, scholarships, work-study programs, and federal student loans. A recent study found that more than $240 billion in financial aid is awarded annually, helping students with different financial needs. Families should complete the FAFSA as soon as possible. This process will determine your eligibility for federal Pell Grants, federal Direct loans (Stafford Loans), scholarships, and work-study programs.
We can’t give you a magic number on how much you’ll receive through the FAFSA, but it could be thousands of dollars in grants, scholarships, and loans. Taking advantage of a work-study position in school could also help you earn extra money throughout the school year.
Scholarships: Your Ticket to Free Education
Scholarships are an excellent way to pay for college without the burden of repayment. Free money will always be at the top of the list when looking for the best ways to pay for college. Researching scholarships should be at the top of your college to-do list. There are many scholarships, and not all are merit-based.
Some scholarships are awarded to students with financial need, but many are open to all college-bound students. Applications may require an essay or other documentation of skills or grades. The CFNC Scholarship Search toolis a free database of scholarships available in North Carolina.
Appeal for Additional Aid
If your initial financial aid offer is insufficient, appeal to your school’s financial aid office. Changes in family finances or other special circ*mstances can lead to additional aid, alleviating some of the financial pressures of college funding.
Start by contacting the financial aid office to find out their process for filing an appeal. The sooner any additional forms and documentation are filed, the sooner you will know if you’ll receive additional aid.
2. Save Money for College
Family Contributions and Savings
Family income and savings play a vital role in paying for college. Your parents may have been saving for your education since you were a baby. Something like an NC 529 Account can help you continue to save for college with tax-free earnings on qualified education expenses. Don’t forget that friends and family members can contribute to your NC 529 Account as gifts for graduation, birthdays, and holidays.
Part-Time Work
Students can contribute to paying for college through part-time work during the school year and summer jobs. This not only aids in college funding but also instills a sense of responsibility and work ethic. Every penny you can save over the summer will come in handy during the school year.
Work-Study Programs: Earn While You Learn
Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. This program encourages community service work and work related to your area of study.
3. Keep Your Options Open
Make a List of Schools and Keep Your Options Open
When you’re deciding where to go to school, your list should include public, private, and in-state schools, along with a local community college. Having a wide variety of schools that meet your educational goals will give you options to choose the school that’s also the best financial fit for your family’s budget.
Once you’re accepted at a school, you will receive a financial letter or package indicating any grants, scholarships, federal student loans, work-study, and other financial assistance the school plans to provide. You can then compare expenses and financial assistance from each school to make the best choice from all the available options.
Community College: An Affordable Start
Community colleges offer a cost-effective way to complete general education requirements. Students can complete general education classes at community colleges or dive into more challenging academic classes in the honors programs that many two-year schools offer. Find out whether your local community college offers an articulation agreement with participating four-year colleges or universities. Articulation programs ensure that the classes students take at a community college will easily transfer, so you won’t lose those valuable credit hours or need to repeat a class.
4. Compare Student Loan Options
Once you calculate how much money is available from savings, financial aid, and scholarships, it may not be enough to cover all of your college needs. At this point, it may be good to consider additional student or parent loans.
Federal loans are provided by the government. Private student loans are offered by banks, credit unions, online lenders, and non-profit organizations. You can learn more about student loan terms at NC Assist Loan’s student loan glossary, but here’s a quick look.
Federal Parent PLUS Loans
If you’re unfamiliar with the federal PLUS loan program, they’re offered by the U.S. Department of Education to parents. You may see the Parent PLUS Loan listed on your financial aid award letter when it arrives from the schools where you’ve been accepted. PLUS loans don’t have borrowing limits like Direct Loans for students, and parents can borrow up to the cost of attendance.
However, PLUS loans may not always have the most competitive interest rates or terms. So, before you commit to a PLUS loan, you’ll want to do some additional homework on the benefits of private student loans.
Private and Alternative Student Loans
One option for families to pay for college is to work with a non-profit lender, such as the NC Assist loan program. NC Assist does not have big corporate earnings reports or shareholders to satisfy. There are no application fees and no penalty for early repayment. Our top priority is helping North Carolina students afford college while keeping costs as low as possible. Visit our website to learn more about the NC Assist Loan options and the benefits of working with a trusted non-profit lender.
Use All Options to Pay for College
Paying for college requires a combination of strategies, including grants, scholarships, loans, and personal savings. This is the best way to pay for college. Exploring all available college financing options and choosing what best suits your family’s financial situation is key to managing college expenses effectively. Remember, investing in education is investing in the future.
