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How Do I Pay for College? Everything you need to know about financing your education

Founder/Senior Editor
B.A., M.Div.
Jeremy Alder has spent over a decade researching and writing about higher education to provided students with the information they need to achieve their goals. He has significant personal experience with career transitions, working as a freelance writer and editor, non-profit director, community organizer, preacher, teacher, retail manager, and carpenter prior to founding College Consensus. Homeschooled from the second grade, Jeremy is a graduate of the University of Texas at Austin (B.A., Philosophy) and Duke University Divinity School (M.Div.). He currently lives in North Carolina with his wife, five kids, and a Labradoodle named Hank.

Money is the biggest obstacle to college for most people and the main reason trust in college as a good investment is at an all-time low. Our experts here at College Consensus have compiled helpful answers to the most common questions students of all ages and backgrounds have about paying for college.

Before college

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Is college still a good financial investment?

In an era that values hustle culture and keeping personal debt low, perhaps it should not come as a surprise that many prospective students have been wondering whether or not going to college will pay off for them. With the average cost of attending a four-year college clocking in at around $142,000, students should seriously ponder whether or not attending university is the best path for them.

Recent statistics have shown that those who achieve degrees are far less likely to be unemployed than those who have not pursued higher education. In a dynamic and ever-transforming job market, this is a good assurance. Researchers have also determined that, over their lifetimes, those who possess college degrees are likely to make over a million dollars more than those who have just a high school diploma. College graduates are also more likely to be homeowners. Although college may be a significant investment, it can yield great rewards.

Recent statistics have shown that those who achieve degrees are far less likely to be unemployed than those who have not pursued higher education. In a dynamic and ever-transforming job market, this is a good assurance. Researchers have also determined that, over their lifetimes, those who possess college degrees are likely to make over a million dollars more than those who have just a high school diploma. College graduates are also more likely to be homeowners. Although college may be a significant investment, it can yield great rewards.

There are a great many professions that don’t require college. If a student is passionate about subjects such as automotive mechanics or cosmetology, for example, it may ultimately behoove them to skip college and opt for a trade school instead. Also, statistics have shown that people who live in smaller towns are less likely to benefit financially from a college degree than those who live in big cities. When it comes to attending college, there is no one-size-fits-all answer.

How early should I start thinking about paying for college?

As a student in the United States, there is literally no limit to how early you should start thinking about how you’re going to pay for college. In fact, some experts believe that students need to start preparing for college no later than 6th grade, but hopefully their parents started a college fund on the day they were born.
The average annual salary in the U.S. is $83,195. Meanwhile, the average cost of living is almost $73,000. This leaves less than $10,000 annually to deal with major unexpected expenses, vacations and some mad cash. In other words, it’s quite clear that your parents probably can’t pay for everything, especially at an average cost of $104,108 for in-state tuition over four years.
You’ve basically got three choices. You can either take on a lot of student debt, get a scholarship or help your parents save for college. If you choose the third option, you’ll have to put aside almost everything you make during your high school job. Unfortunately, even if you save all your money, you won’t make a big dent in your tuition. That’s because the federal minimum wage is only $7.25, and you can only work 24 hours a week. Even if you live in Washington, D.C., which has the best minimum wage in the country, you won’t be able to pay for four years of education without a lot of help.
Sadly, the gap between income and tuition is growing every single year. Therefore, if you haven’t already started thinking about it, now is the perfect time to start planning how you’ll pay for college.

How do I talk to my family about paying for college?

If you plan on going to college, you may be considering asking your family to help you pay for it. Here are some things you should do beforehand to make this discussion less difficult.

When you sit down to talk to your family about paying for college, there’s a good chance that they will want to know exactly how much money you are asking for. This is why it’s a good idea to determine how much money you’ll need beforehand. Find out how much classes cost per credit hour as well as how many classes you will need to take to graduate. If you can, give them a general idea as to how much money they will need to pay each semester and how much money you will be able to contribute towards your college education.
Before your family agrees to pay for college, they may want to know whether or not a college degree is actually necessary. This is why you should make a list of ways that a college education will be beneficial for you. This can include things like helping you get a job or increasing your salary.
Talking to your family about paying for college doesn’t have to be scary. Just make that you have the proper information that you need before you schedule a time to talk to your family about helping you pay for your college education.

What is a 529 college savings plan?

A 529 college savings program is an savings plan that allows your money to grow tax free as long as you use it for specific education expenses. Eligible expenses include tuition, room and board, books, printers, computers, and more. A 529 plan can be used at a variety of eligible public and private schools such as universities, community colleges, trade schools, and apprenticeships.

A 529 plan encourages parents to save money for future education expenses by offering tax benefits. The benefits include tax-free earnings and withdrawals. Some states also provide additional tax incentives such as reducing your state tax obligations by the amount of the contribution.

Another important consideration is that the assets in your child’s 529 plan won’t negatively impact their ability to qualify for federal aid. The 529 plan doesn’t count as heavily toward your expected family contribution (EFC). The EFC is the amount you and your family are expected to pay for college based on individual financial circumstances.

How much money do I need to save for college?

Over the past two decades, the cost of going to college has skyrocketed, and it’s not uncommon to spend over $100,000 to get a degree from a private school. However, the exact amount that you’ll need to save for school depends on a number of factors. These factors include the type of college you’re attending, the level of education you plan to attain and whether you’re getting any type of financial assistance.
First consider what type of school you plan to attend. You will spend an average of $10,662 per year to attend a public college in 2023 compared to more than $42,000 to attend a private college. Community colleges tend to cost significantly less, with some schools charging less than $10,000 to get a two-year degree. In many cases, credits obtained at a two-year school can be transferred to a four-year college or university.
It’s also important to consider how far you’re planning to go with your education. If you plan to pursue a postgraduate degree, you’ll pay an average of $20,000 annually. Your total college bill could exceed $40,000 depending on where you plan to study and whether you have access to grants or scholarships.
Of course, how much financial aid you receive is an important factor. Athletic, academic or other scholarships can cover some or all of the cost of your undergraduate degree. Grants may also be available that typically don’t need to be repaid unless you fail to graduate, and they can total thousands of dollars over the course of your education. Student loans can also cover any costs that you can’t pay on your own.

How do I find out how much a college will cost?

Obviously, there are many different colleges and universities at a variety of price levels. When you want to uncover the cost of a particular school, there are a few tips that can help.

To begin, most colleges have “net price calculators” published on their websites. You simply enter your financial information, and cost estimates are determined. In most instances, grants and scholarships are applied to the overall cost based on financial need. This is an easy way to find an approximate price.

It is vital to consider living expenses. Oftentimes, the cost of room and board are separate from a school’s tuition. Also, certain courses of study come with extra fees.

Before applying to college, it is crucial to understand the true cost. Many individuals discover that the advertised price is rarely the amount that is paid. Depending on financial circumstances, it is possible to receive assistance. It is wise to consult with an advisor at a preferred university and discuss financial aid options.

Why does college cost so much anyway?

For students who are contemplating college, the costs can seem staggering — and rightly so. Over the past 40 years, the average price for an undergraduate degree skyrocketed, vastly exceeding wage gains during the same time period. But why has it become so expensive to secure an education? There are a number of factors influencing the current costs.
Like everything else in the post-pandemic era, the price of secondary education has exhibited a rise due in part to inflation.
Improving Campuses and Amenities
Although it’s more competitive than ever to gain entrance to their top college picks, students sometimes forget that colleges and universities are also competing for their affections. In order to attract the best and brightest pupils, many institutions are continually upgrading their facilities and adding new programs that will appeal to prospective students.
Faculty and Administration Costs
Tenured faculty members are often cited as one of the reasons for high college costs. These are the professors who have been teaching for so long that their salary has become much higher than that of a typical educator at the same school. However, the statistics are now showing that the increasing presence of administrators may be more responsible for the high cost of college.
Due to these factors — and many more contributing to the average bill for college — it doesn’t seem likely that the price of education will come down anytime soon. It’s up to aspiring university students to figure out how best to prepare for this.

Will taking college or AP courses in high school make college cheaper?

If you are looking for ways to make college affordable, it pays to start studying as soon as possible. High school students who take college or AP classes can save a lot of money later on.

One of the most effective ways to save money is to take Advanced Placement (AP) classes. These courses are taught in high school, and if you pass an AP exam at the end of the year, the class qualifies for college credits.
Since AP courses are free for high school students, this results in big savings. Depending on your college’s rules, each passed exam can be worth two to five college credits. Since the average credit hour costs $390, your AP classes could end up saving you thousands of dollars each semester.

Another excellent option is dual enrollment. These classes let you take a college class while you’re still in high school. Compared to AP classes, dual enrollment classes are often easier and more straightforward. You get college credit as long as you pass the class, and you don’t need to take a rigorous exam.
Dual enrollment classes are publicly funded. High school students do not have to pay anything themselves to take the classes. Since each class typically costs around $1,170, each dual-enrollment course you take saves you money.

What if my family doesn’t have enough money for college visits?

The only way to fall in love with a college campus is to schedule a visit. Taking a tour allows a prospective student to experience the atmosphere. Also, it is possible to ask questions to current students and faculty members. Unfortunately, not everyone can afford this type of travel.

Some colleges and universities provide assistance for college visits to people who need financial help. It is advised to contact a preferred school and to inquire about opportunities for partial funding of transportation, food, and lodging. In certain cases, students receive free accommodations in a dorm and free food from the dining hall. Likewise, it is smart to contact hotels and airlines. Some offer deals to traveling students.

To cut travel, it is wise to visit a group of colleges in one geographic location. Also, it may be possible to schedule a virtual tour, which costs nothing. Many high schools offer college fairs with representatives that can provide desired information as well.

When the time comes for a visit, it is essential to contact a school’s admissions office. Most times, a college will do anything possible to welcome a qualified applicant for a tour. It is an important part of the selection process and helps a student make a solid choice.

What are my options if my family can’t help pay for tuition?

If you’re not lucky enough to have rich parents, a trust fund or a maxed-out college savings account, there are still numerous options for funding your education. One or more of the following strategies may help you finance the education you want.

Almost every college and university offers scholarships to incoming students that are based on high standardized test scores and other academic achievements. Scholarships don’t require repayment, and in most cases, there’s just one application to fill out in order to be considered for dozens or even hundreds of scholarships.

If you don’t qualify for academic-based awards but can demonstrate serious financial hardship, there are still plenty of scholarships that are available to you. The previously mentioned scholarship application process at your prospective school will also put you in the running for numerous awards based on financial need.

Federal grants through the Pell Grant program are offered to millions of students every year. These awards generally don’t require repayment and are based on family size, financial need and other factors.

Every college and university has service jobs that need to be filled, and many offer these jobs to their students first. Taking advantage of a co-op program is another great way to earn money for school along with valuable work experience in your chosen field.

Although loans come with the downside of having to be repaid, these financial instruments allow many students who would otherwise be unable to afford college to complete their educations and increase their lifetime earnings.

Choosing a college

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How much should cost determine my choice of college?

How much cost should determine your choice of college depends on a number of factors, most of which are individual to your situation.
For many, the most important factor to consider is how much it costs relative to your family’s income and net worth or, if applicable in your case, just your own.
That said, an essential element that many undervalue is the final cost, not the sticker price. This not only includes any scholarships or grants but also indirect costs, such as rent, food and transportation, in addition to tuition, fees and textbook expenses.
And it must be stressed that you may receive scholarships and grants that you did not anticipate, and you should not rule out pricier schools solely based on sticker price.
You should also take into account that this is essentially a once-in-a-lifetime decision when considering if you will attend a dream school that costs more than your second or third options.
Other factors to consider include a school’s extracurricular activities, location, student body, admission criteria and academic offerings and reputation.
However, if you are going to struggle financially as a result, it may not be worth it. There is definite value to graduating with no or little debt.
Of course, any loans that you take out should be paid back, and you should hesitate to borrow more than you expect to earn in your first year after earning your degree.
If you do decide to turn down your top choice related to cost, note that you will not be alone as 40% do.

Is online college cheaper than regular college?

When looking at reducing college expenses, online learning could be an important consideration. In general, online education can be a more affordable choice because the school has lower overhead expenses to administer the classes. It can also be less expensive as a student because you won’t have transportation costs and course materials may be cheaper. You also have freedom of location, which could allow you to live in a less expensive city than where the college is located.

However, you shouldn’t assume that online education will be cheap. While the average cost of an online education is less expensive, it’s still a major investment and you may still need financial aid or student loans to help pay for your degree. It’s also an important consideration that many online-only programs don’t offer the same kinds of aid as campus-based institutions.

Overall, however, an online education is almost always less expensive overall, and it often offers more flexibility in finishing your degree. Flexible options include credit for previous experience, transferring credits from other schools, and accelerated classes. These options help further reduce the costs, and flexible scheduling options make it easier to work while attending school.

Is it cheaper to start at a community college and then transfer to a university?

In most cases, it is cheaper to start your education at a community college and then transfer your credits to a university. Community colleges have a lower tuition rate and are often located closer to your home, which could also reduce your living expenses or transportation costs. They are a great way to complete some of your initial general education courses, allowing you to focus on your degree-related classes at the more expensive university.

One important consideration, however, is ensuring that your credits will transfer. If you already know which university you’ll enroll at later, make sure you understand their policies. Schools may have limits on how many transfer credits they’ll accept or which specific classes will apply to your degree program. For example, if you take a basic math class at the community college, but your university degree program specifically requires an algebra class, the credits may not transfer, or they may only count as an elective rather than toward your degree. As long as you understand the transfer requirements, community colleges are a good option for beginning your education and saving money.

Are there colleges I can attend for free?

College costs have been rising faster than inflation for decades, putting higher education financially out of reach for many students. But did you know there are ways to attend college without paying a dime?
Here are three ways to attend college for free:

Many states offer two years of free community college to high school graduates and certain career-changers later in life. These programs not only let you earn an associate’s degree for free but also provide a cost-effective way to work toward your bachelor’s degree.
States offering free community college programs include California, Maryland, Maine, Tennessee and Washington.
It’s important to note that while these programs cover tuition and fees, you may still be responsible for costs such as housing, books and transportation.

Some colleges offer guaranteed full-tuition scholarships to applicants who meet certain GPA and SAT/ACT score requirements. Other colleges offer full tuition and even full rides to students who are National Merit finalists or semifinalists. For example, National Merit finalists get a full-ride scholarship at the University of Alabama, and National Merit semifinalists get full tuition at Washington State University.

Work colleges are institutions that require students to work on campus as part of their academic program. These colleges offer free tuition, and students work to defray the cost of their education. Two examples of highly rated work colleges are Berea College in Kentucky and College of the Ozarks in Missouri.

Is it cheaper to go to college in my home state?

When selecting a college, an important consideration is whether to attend college in your home state. It is often cheaper to attend an in-state college for several reasons. First, most public colleges charge a lower rate for current residents because you or your family have presumably paid taxes that benefit the school. The state would also like to retain its college-bound residents rather losing them to another state, which is known as “brain drain.” For the most part, these rate differences apply only to public institutions and not private schools.
According the College Board data, your out-of-state tuition costs could be as much as triple the cost of in-state tuition.
Next, there’s could also be the consideration of reduced housing costs if you’re able to live at home rather than paying for a dorm or apartment, and you could have lower travel expenses for visiting your family. A final consideration is that if you’re using student loan funding, lower tuition translates to lower student loan balances and future interest payments.
If you do want to attend an out-of-state college and pay in-state rates, you’ll first need to establish residency. Requirements may vary by state, but a common requirement is for the student to live in the state for at least a year before the initial college registration.

What’s the difference between in-state and out-of-state tuition? Why is it different?

When looking at average college costs, it’s important to consider the difference between in-state and out-of-state tuition.

When colleges charge students for their courses, they charge different rates on whether students are already residents of the state the college is located in. In-state students pay significantly less than out-of-state students. On average, out-of-state tuition is $26,382 while in-state tuition for the same degree is $9,212.
Keep in mind that this difference usually only applies to public colleges. Private schools usually charge the same rate regardless of where students lived before attending college.

In-state tuition is more affordable because public education is subsidized by state taxes. Since state residents are taxed to pay for college, those who live in the state are already contributing more to the institution’s expenses. Meanwhile, those who live out of the state have to pay more since they haven’t put any tax money towards the school yet.

If you’re interested in the savings associated with in-state tuition, the simplest option is to pick a school in your state. However, depending on your career plans, this isn’t always possible. Different states have different rules for qualifying for in-state tuition, but typically, you need to live there for 12 months before you start taking classes.

Is it cheaper to go to college abroad? How do I do it?

If you’d like to save money and still get a top-notch education, there are plenty of ways to do it. Studying abroad can cut your expenses dramatically. All you have to do is find the right country.
To begin, write out a list of some of the top countries you’d like to study in. Several highly rated universities provide deeply discounted tuition to everyone who enrolls, including those from the United States. Some noteworthy places of interest include:

  • New Zealand’s University of Auckland – $9,000
  • China’s University of Nottingham – $7,000
  • Australia’s University of Tasmania – $6,000
  • Paris’ La Sorbonne – $200 (must speak French)

As you can see, any of these choices would be much better than going to college in the United States, where the average cost of tuition is $36,436 per year.
There are a variety of different ways you can make your dream of studying abroad come true! However, you must remember that it will require some time and effort on your side. Some of the best ways to ensure that your plan of studying abroad becomes a reality are:

  • Go through an exchange program
  • Go through your university
  • Go to a language school
  • Go as a researcher or graduate student
  • Go through a government program

Whichever option you choose, don’t forget to calculate the cost of living. In Norway, for instance, the cost of living is high enough that you might not actually save much money. In Sweden, meanwhile, tuition is free, and you’ll save about 13 percent on the cost of living.

Why is college so much cheaper in other countries?

It’s no secret that college in the United States is incredibly expensive. According to a recent report, the average cost of college in the U.S. is $36,436 per student per year. That average has more than doubled in the 21st Century, with an annual growth rate of two percent over the last decade. In fact, college would be prohibitively expensive for most Americans if it wasn’t for loans and other forms of financial aid.
However, it’s a different story in other parts of the world. For example, you can attend many colleges in Europe for less than $5,000 a year. Some countries such as Sweden, Norway, and Finland have degree programs that are entirely free.
So yes, college is much cheaper outside of the United States. There are a few reasons for this. First of all, most European countries believe that higher education should be attainable for everyone, not just a select few who can afford it. There are still private universities that are more expensive, but for the most part, students can attend college courses for next to nothing in much of the world simply because the schools want them to.
Second of all, many universities in other parts of the world are public and funded by the state, making them much cheaper to operate and easier to afford. The focus for many of these schools is on education first and foremost, as opposed to American colleges that place a huge emphasis on sports and other extracurricular luxuries.
Finally, many European countries subsidize higher education with their tax money. Yes, the taxes in many European countries are higher than they are in the United States, but much of that tax money goes to funding public colleges, making them more affordable for everyone.

Financial aid

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What types of financial aid are there?

Going to college can be very expensive, but you may be able to get help paying for it. Fortunately, there are different types of financial aid available to those who qualify.
Students may be able to take out student loans in order to pay for college. These loans often come with low interest rates, and students don’t need to start paying them back until they are finished with school.
This type of financial aid doesn’t usually need to be repaid. Grant eligibility will often be dependent on the income of the student or their family. However, some colleges will have grants available for those who meet other requirements, such as being a resident or declaring a certain major.
Work-study Programs
For students who need help paying for college, don’t qualify for grants or loans or just need additional money to pay for college, they may find that work-study programs are a great option. They can work at the college that they are attending and receive money that they can use to pay for some of their school expenses.
If you need help paying for college, there are quite a few options available. Your first step would be to fill out the FAFSA online, and have the results submitted to the college that you plan on attending. The financial aid department will contact you to go over what aid you qualify for and how much you will need to pay out-of-pocket for college.

What determines how much aid I get?

Your eligibility for financial aid is determined by your year in school, your Expected Family Contribution (EFC), the cost of attending your chosen school, and your enrollment status. The financial aid office for your university, college, or trade school determines how much financial aid you’re eligible to receive.
First, the staff calculates the cost of attendance (COA) for that school. Next, they look at your EFC, subtracting our EFC from the COA. This determines your amount of financial need and how much, if any, need-based financial aid you could receive. The school will also look at how much non-need-based aid you could receive, which is calculated by subtracting any financial aid you’ve received from the COA.
Your COA is generally calculated on an annual basis, such as for the fall and spring semester. It’s the estimate of your tuition, fees, room and board, books, supplies, transportation, etc.
EFC is the index number that financial aid departments use to calculate how much financial aid you could receive if you attend their school, using the information provided on your FAFSA (Free Application for Federal Student Aid form). Your EFC number is not how much you’ll have to pay for college.

What is the FAFSA?

FAFSA is a term you’ll hear frequently in the college application process. FAFSA stands for the “Free Application for Federal Student Aid (FAFSA®)” form. This form will be required for anyone applying for federal student aid assistance, such as work-study funds, loans, and federal grants. As the name suggests, it is free to complete and submit the FAFSA form; completing this form grants you access to the largest sources of financial aid available for your ongoing education needs.

In addition, many colleges and states will use your FAFSA form to help determine whether you’re eligible for school and/or state financial assistance. Various private financial aid providers also use FAFSA when determining if you qualify.

FAFSA isn’t just a one-time application. Before each new school year, you’ll want to apply for any federal, state, or school aid you’re hoping to obtain. After you submit the form, you’ll receive what’s known as a Student Aid Report. This report will explain the amounts and types of aid each college is offering as well as your expected costs. This makes comparing expenses across different schools easier. For example, College A might be more expensive than College B but offering a more substantial aid package, making your overall expenses lower. Regardless of your financial situation, completing the FAFSA form is an important step in your college application process.

What is the CSS profile? Should I fill it out?

The CSS Profile is an online application that can help students access millions of dollars in non-federal aid from various colleges, universities, and scholarship programs. It is administered and maintained by the College Board, the organization that runs the SAT.

Who Needs a CSS Profile?

Much like the FAFSA, the CSS Profile is used by numerous schools and programs when weighing financial aid. Anyone who is considering one of these schools should make sure that they fill out their CSS Profile. It has the potential to make a major difference in the final price of their college education.

What Does a CSS Profile Cost?

Are you ready to fill out the CSS Profile? Access begins on Oct 1. Deadlines vary by institution and program. The cost is $25 for the initial application to one school and $16 for each additional application. Fee waivers are available for domestic undergraduate students with family incomes up to $100,000.

How Does the CSS Profile Differ From the FAFSA?

According to U.S. News & World Report, completing the CSS Profile can be more challenging than the FAFSA, but it may result in more financial aid. The CSS Profile dives deeper into a family’s finances. It also allows institutions to customize the form. In addition, it gives families opportunities to describe special circumstances.

Is there a difference between a grant and a scholarship?

Grants and scholarships both provide students with free money for college. Although there is usually no need to pay anyone back, grants and scholarships are given to students for different reasons.
A grant is typically given to a student who has a financial need for college assistance. Meanwhile, scholarships tend to be merit-based. In other words, if you receive a scholarship, it will be tied into your academic achievements, field of study or extracurricular activities.
Getting a grant requires you to be able to prove that either the cost of the school is way too high for your family’s financial situation or you have a disability. There is one caveat with a grant, however. If you fail to complete the program or fail to keep your GPA above a certain limit, you may be required to pay for whatever portion of the grant you’ve used.
Scholarships can be earned based on your academic prowess, but they’re also given to people who are part of a specific group or ethnicity. For instance, a member of the LGBTQIA+ community may qualify for a scholarship that’s given only to LGBTQIA+ individuals. Again, if you fail to meet certain criteria after earning a scholarship, you may be forced to pay it back.
Generally speaking, it’s easier to get a scholarship than a grant. If you believe you quality for a grant, though, you should definitely apply for one. Be aware that you can receive a grant and a scholarship, which could pay for most or all of your education.

What is a grant? Are there different types?

A grant is a large source of student financial aid that does not need to be paid back. Grants are based on need, so they are often rewarded to students with the fewest financial resources. Eligibility for a grant is determined when students fill out the Free Application for Federal Student Aid, or FAFSA.
Most grants are intended for low-income students who otherwise would not be able to attend college. However, most students are eligible for some kind of financial aid. If you’re a prospective college student, fill out the FAFSA to find out if you qualify for grants.
Types of Grants
The funds for most grants are provided by federal or local governments and sent directly to colleges on behalf of students. Federal Pell Grants are awarded by the federal government to students with family incomes under $65,000 a year. You can receive a Pell Grant until you complete a bachelor’s degree or 12 full-time semesters. In some cases, you can receive a Pell Grant to pay for a post-graduate teacher certification program.
Grants can also be awarded by state governments to those in need. Some of these grants are intended for low-income students who grew up in the foster care system, while others are for low-income parents with children 12 and under. Others still may be awarded to students enrolled in teacher certification programs or to family members of public safety officers killed in the line of duty. As with Pell Grants, students are encouraged to apply for any grants they can to find out if they qualify for any of them.

Where can I find out which scholarships I’m eligible for?

As a prospective college student, you may be eligible for at least a few scholarships. The best place to go for this information is the financial aid office of the school you plan to attend. You can also speak with your school counselor if you’re still in high school or check this free scholarship search tool from the U.S. Department of Labor. Other sources of information include the reference section of your local library, your state’s grant agency, and professional organizations related to your field of interest. If you are a member of a marginalized minority group, you can also look for nonprofit organizations that are dedicated to serving your population. They often have scholarships available for those who qualify.
While we do encourage all prospective college students to seek financial aid, remember that there are plenty of financial aid scams out there. Be sure to read all the information that you can about any scholarship for which you want to apply, always use the official FAFSA site when applying for aid, and remember that you should never have to pay for resources when you apply for aid.

Is aid available for food and housing costs?

Let’s say you’re going to college but have no money to pay for anything, including your food and housing costs. Fortunately, there is federal student aid available to help ensure you’re able to focus solely on your classwork. To find out if you qualify for this aid, fill out the FAFSA form.
As long as you qualify, you can use your student aid to pay for:

  • Tuition
  • Fees
  • Food
  • Housing
  • Transportation
  • Books
  • Miscellaneous supplies

Getting qualified requires you to meet basic eligibility guidelines, including:

  • Prove you need financial assistance to pay for college
  • Be a U.S. citizen or eligible noncitizen
  • Provide your valid Social Security number (certain exceptions apply)
  • Be accepted for enrollment in a certificate or degree program
  • Go to school at least half-time
  • Meet or exceed your school’s satisfactory academic progress
  • Prove you’re not in default for any other student loans
  • Be qualified to get a college education

It’s important to note that there may be additional requirements, depending on factors such as having a criminal conviction, being a non-U.S. citizen or having an intellectual disability. Either way, the best way to find out if you can receive federal financial aid is to apply for FAFSA. Filling out the necessary paperwork is free, so you’ve got nothing to lose!

What is the difference between need-based and merit-based aid?

Did you know that the average total cost of attendance for one year of college in the United States is more than $36,000, as of 2023? That is more money than many Americans make each year.
Fortunately, most colleges offer financial aid to make getting a degree affordable for as many students as possible. There are two types of financial aid: need-based and merit-based. One is based on your family’s income and ability to pay, and the other is based on your academic and extracurricular achievements.

Need-based financial aid is a type of educational assistance that is given based on your demonstrated financial need. It considers factors such as your family’s income and assets, the number of people in your household, whether you have any siblings attending college at the same time as you, and the total cost of attendance at your school. The purpose of need-based financial aid is to bridge the gap between your financial resources and the cost of your education.

Merit-based financial aid is awarded based on your resume and achievements. You could be offered a merit-based scholarship for academics, athletics or artistic endeavors. This type of financial aid focuses on your accomplishments and potential as opposed to your financial need. Academic performance (including grades and ACT/SAT scores), demonstrated leadership, extracurricular involvement and unique talents are key criteria to be considered for a merit-based scholarship.

What is the difference between a dependent student and an independent student?

When you apply for financial aid from your college or university, the amount of assistance you receive may depend on whether you’re classified as an independent student or a dependent student. The following sections explain what each of these classifications means.

A dependent student is one who receives financial help from another person, typically a parent. The student is often, though not always, still claimed as a dependent on their benefactor’s tax returns. Their financial aid award considers not only their own income and assets but also those of the person or persons helping with their financial support. This arrangement reflects the shared financial responsibility and influence of the supporting persons on the student’s ability to contribute to educational expenses.

An independent student does not receive any financial assistance from their parents or others. They rely solely on their own income to pay for school. Their financial aid award is based entirely on their own income and ability to pay.
Establishing independence requires meeting stringent criteria; simply not being claimed as a dependent on someone else’s taxes, such as a parent, does not automatically confer this status. The student bears the burden of demonstrating self-sufficiency.

What is the bursar’s office?

Also known as the student financial office, the bursar’s office is an important resource for college students. They are responsible for billing and collection of any tuition-related charges. They also administer Federal Perkins Loans.
The bursar’s office should not be confused with the financial aid office, although these two offices work together closely. Financial aid provides crucial financial support to the student, while the bursar’s office collects fees and tuition from the student.
Whether you are a new or returning student, you’ll work with your bursar’s office when you need to pay a bill or develop a payment plan. The bursars will also advise you of any late payments and keep records of any past payments you’ve made.
When communicating with the bursar’s office, keep records of all incoming and outgoing emails for future reference. If you have an in-person or telephone discussion, note the date, time, person you spoke with, and notes of the conversation. These records will be helpful if any questions arise later or if you need to follow up on outstanding items. Pay attention to all payment deadlines because missing a deadline could have a huge financial impact. You could be responsible for late fees or even disenrolled in the program.

What is an award letter?

A financial aid award letter is a document sent to prospective students detailing the amount of financial support they are eligible to receive. The letter is sent to students who fill out the Free Application for Federal Student Aid (FAFSA) and an application to attend a university. The aid offered in the award letter is intended to offset the costs of attending the university.
In general, an award letter will explain:

  • The estimated cost of attending a university for one year. This includes tuition, room and board, books, and other associated fees.
  • Your expected family contribution.
  • The amount that is offered to you from grants, scholarships, loans, and work-study programs.

Schools typically send award letters around the same time they send out acceptance letters. Whether you plan to accept or decline your financial aid, you need to respond to the school with your decision. Check your school’s deadline so that you can reply in time.

Is financial aid available for international students?

Financial aid is not available for international students. However, anyone who wishes to attend school in the United States should still fill out the Federal Application for Free Student Aid (FAFSA).
Some colleges or universities will use the form to determine eligibility for aid at their institutions. Some institutions also require the International Student Financial Aid Application (ISFAA) while the student is enrolled.
Meant as a supplement to existing funds, students may qualify for this grant aid based on their financial need.
Students must check with the financial aid office at the school they plan to attend for specific requirements. However, certain categories qualify as eligible noncitizens such as:
• U.S. national or U.S. permanent resident
• Arrival-Departure Record that shows refugee, asylum granted, Cuban-Haitian entrant or conditional entrant
• T-visa for human trafficking victims
• Battered immigrant-qualified
Other colleges and universities may require international students to create a College Scholarship Service (CSS) profile. This profile is for students to report financial data in their home currency. Information collected covers family income, assets and expenses.
There are additional school-related forms that international students may need to fill out to determine eligibility for available aid at their chosen school.
The cost of attending a college or university in the U.S. is expensive. Yet, some people not born in this country still desire to get their education here. Fortunately, there are options like private student loans to help cover the cost for international students.

Is financial aid available for undocumented/DACA students?

Although undocumented students and DACA recipients are not eligible for federal aid, some may be unaware that there are still options available to them. In fact, many states offer aid to residents who are undocumented. New York’s program is called the Tuition Assistance Program (TAP) while Rhode Island offers the Student Success Initiative and California has a program called Cal Grant.
For aspiring undocumented students, many of whom aren’t even aware that they’re undocumented until they apply for college, it can be challenging to navigate the landscape of higher education. But they should not let this impede their journey, as there are a lot of colleges and universities offering merit-based scholarships that do not take into account whether or not a student is documented. Some institutions, such as George Washington University, have become particularly well-known for offering scholarship aid to students who are undocumented.
There are also many private scholarships that these students can consider. Golden Door Scholars was founded just a decade ago but has quickly become one of the most popular programs. However, this is far from the only option available. The sooner undocumented students start their search for financial aid — whether it’s through community-based programs or even a crowdfunding effort set up by relatives — the more likely they will be to succeed at finding enough resources to support their educational goals.

Is financial aid available for older and non-traditional students?

Although many people may picture the typical college student as a 20-year-old, statistics indicate that a striking number of older adults are now pursuing higher education. In fact, people over 25 accounted for about 35% of the college population in 2018. With so many older students making their way onto college campuses, it is a relief to know that financial aid is available to them as well.
Many aspiring students work for companies and institutions that support the idea of their employees acquiring new education — and a lot of these workers aren’t even aware of the programs being offered at their workplaces. Older, non-traditional students should start with their HR department when trying to find out about college aid that may be offered to them.
There are scholarships that are specifically designated for older students — and even those who are experiencing transitions in life.
There is no age limit when it comes to financial aid, so older students are still eligible to apply for FAFSA and other programs. Additionally, many states offer incentives that encourage older learners to get a degree.
For those who belong to churches or other similar organizations, it may pay to ask if there are any programs available for older adults wanting to continue their education.
Indeed, for those who want to seek a degree at an older age, there are a lot of resources available — it’s just a matter of looking in the right places.

Is there special aid available for military families?

Prospective college students who have served in the U.S. armed forces or have family connections to the military may qualify for special financial aid programs. Scholarships and other grant programs have been created to help family members of active and retired military personnel pay for college tuition as well as the cost of books and other college expenses.
Certain organizations are known to offer scholarships to help active military service members, veterans and their families pay for college. Some of these organizations include the American Legion, Veterans of Foreign Wars and AMVETS. People with military connections can also apply for financial aid through smaller organizations and programs.
The spouses and children of veterans who were captured or killed in the line of duty or suffered disabilities from service may qualify for financial aid through the Survivors’ and Dependents’ Education Assistance (DEA) program. To qualify, prospective college students must be at least 18 years old and have completed high school or secondary education.
Children of veterans who were killed while serving in Afghanistan or Iraq can apply for federal Pell Grant funds. To qualify, the death of the applicant’s parent or guardian must have occurred after September 11, 2001, and the applicant must have been under the age of 24 and attending college or a vocational school when the death occurred.

Work and school

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Is the federal work-study program a good option for me?

Federal Work-Study is part-time employment that is available to a college student who demonstrates some type of financial need. It is a smart option for many individuals who look to gain small bits of money without interrupting their class schedules. In most instances, these kinds of jobs have flexible hours that are easier to fulfill than off-campus jobs. Also, most FWS employment opportunities are located on campus, which is convenient for students without available transportation.

FWS is a feasible way to offset student loans. It provides extra cash that can be used to cover educational-related debt. Also, these earnings do not count on the FAFSA. This means that pay will not affect future financial aid.

Many colleges and universities try to match a student with a job that fits his or her academic course of study. For instance, a person in the field of biology may be hired as a lab assistant. In this manner, the student gains practical experience along with a paycheck.

Are there jobs that will pay for my college?

For aspiring college students looking for ways to offset the exorbitant costs, it can pay to find an employer that will help to foot the bill. Fortunately, there are many institutions and businesses that will support their employees in pursuing a degree.
Perhaps the most well-known employer to support continuing education, the U.S. Armed Forces attracts many recruits with the promise of the G.I. Bill. After serving in the military for a specific amount of time — or achieving a Purple Heart — some veterans may find that their college education has been made completely free. Others may receive a huge discount on their college education; since each situation is individual, every veteran will need to speak to their advisors to determine how much aid they qualify for.
One of the best perks of working for some colleges is that they offer free tuition. Of course, students need to be accepted into their programs first. The University of Southern California offers tuition remission in many cases, as do many community colleges across the United States.
The Amazon Career Choice program, which is available to employees who’ve worked at the online retailer for over three months, is very popular. Some may be surprised to learn that the fast-food establishment Chipotle offers education benefits including tuition reimbursement. Taco Bell offers similar perks. For savvy workers, finding a workplace that pays for college can be an extraordinary boon.

Is there financial aid for trade and technical schools? What about bootcamps?

There seems to be a common misperception that students who attend trade and tech schools are not eligible for financial aid, but nothing could be further than the truth. There are even programs that provide funding to those looking to attend specific bootcamps. Students attending these schools should be as diligent about seeking aid as those who plan to attend traditional four-year universities. When every dollar counts, it pays to explore every possible avenue of funding.
Students who attend accredited trade schools can apply for FAFSA. Although the grants offered may be a bit different than those extended to traditional college students, there are still many opportunities here, including potential Pell Grants. After investigating federal student aid, each student should look to their own state to see what is being offered. Many people are unaware that their states offer financial assistance to those looking to go into specific trades, so exploring these programs can pay off.
For trades that are in exceptionally high demand, prospective students should check to see if there are any workforce development programs available in their area. Additionally, if they are employed and looking to get certified within the same field, reaching out to employers is a good idea. However, tech school students shouldn’t allow themselves to be limited by traditional thinking. Many credit unions will offer loans for bootcamps and other programs, and their interest rates are often very attractive. For bootcamps especially, students should check to see if the program itself offers financial aid.

Can I work and go to college at the same time?

Not only is it possible to work and go to college at the same time, but it is very common. The National Center for Educational Statistics reported that 40 percent of undergraduate students worked full-time while attending college in 2020, and nearly one-third of students over the age of 25 had full-time jobs while they were enrolled in college.
Working while going to college requires a big commitment, but there are things that can make it easier. Many students find work near or within their school to cut down on commute times, and many others enroll in work-study programs that allow them to stay on campus while earning a living wage. Many degree programs also offer accelerated programs that allow students to focus on one course at a time, which makes holding down a full-time job much easier. There’s also the option of attending class part-time if a full-time schedule prevents them from working. Finally, many students attend classes online, which allows for more flexible schedules.

Student loans

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What is the difference between a loan and financial aid?

Scholarships, grants and student loans are all common tools students use to pay college expenses. However, there are significant differences between them that you should be aware of when formulating a plan to pay for school.

You generally don’t need to repay grants or scholarships. Grants are awards given to students who need extra assistance to pay tuition and other costs. They are often made by government agencies or the schools themselves to make their programs more accessible to folks who may be poor or actually living below the poverty line. Meanwhile, scholarships are given out to students based on what they have done in school or in the community. For instance, you might get a scholarship because you’re an athlete or because your employer offers one as a perk. You may be eligible for both scholarships and grants based on your circumstances.

Loans must be repaid. Student loans are notoriously difficult to discharge in bankruptcy. Although various payment plans and other tools are available to make payments easier to manage, you’ll typically need to repay them in full at some point. It can take anywhere from a few years to your entire adult life to repay what you owe depending on your balance and other details about your loan. Repaying your loans while still in school may be helpful as it reduces the amount of interest that you’ll pay over their lifetime.

What types of student loans are available?

The most common types of student loans that are available are federal student loans and private loans. Federal student loans are provided by the William D. Ford Federal Direct Loan Program, while private student loans are issued by banks and other financial institutions.
There are three types of federal student loans:

  • Direct subsidized loans, which are based on financial need.
  • Direct unsubsidized loans, which are not based on financial need. Your school will determine how much you can borrow based on the cost of attendance and any other aid you’re receiving.
  • Direct PLUS loans, which are credit-based loans for parents and graduate students.

Private student loans are provided by financial institutions that are taken out directly by students, often with help from parents or other cosigners. Meanwhile, parent loans are taken out by parents to help their children pay for college.
It’s best to check out federal student loans before looking into private loans. Each loan has its own interest rates and repayment options, so it’s best to look over all financial aid options before making any decisions.

How are private loans different from federal loans?

Both the federal government and private companies offer student loans to those who need them. However, there are a couple of key differences between the two options that you should be aware of before deciding who to borrow from.

Private lenders offer fewer repayment options. The federal government offers income-based repayment plans that allow you to reduce your payments to as little as 5% of your disposable income. However, private lenders typically require you to make fixed payments over the course of the loan similar to how you would repay a car or home loan. Furthermore, it’s unlikely that you’ll be entitled to take part in any future student loan payment pauses or apply for student loan relief made available by the government.

Federal loans are easier to get. Perhaps the biggest benefit to federal loans when compared to private loans is that you won’t need a credit check to get a federal loan. Therefore, they are easier to get without the need for a cosigner if you have no credit or a thin credit history. However, you can still ask a parent or another family member to cosign in an effort to get a lower interest rate or other favorable terms. In addition, federal loans typically come with lower interest rates and greater flexibility as it relates to repaying what you owe.  

What’s the difference between a subsidized and an unsubsidized loan?

When considering a federal student loan, it’s important to understand the difference between a subsidized and an unsubsidized loan because there are dramatic cost differences between the two.

Subsidized loans are for those undergraduate students with a demonstrated financial need. This is determined by your cost of attendance (COA) minus your expected family contribution (EFC) and any other financial aid you receive (such as scholarships or grants).

Unsubsidized loans are not based on a student’s financial need, and they are available for both undergraduate and graduate programs. Your eligibility is calculated by your COA minus other financial aid, but it does not include your EFC.

The biggest difference between the two is that a subsidized loan does not accrue interest while you’re enrolled at least half-time, for six months after graduation, and when you’re employed less than half-time.

For an unsubsidized loan, interest is charged from the start of the loan, during enrollment, deferment, or grace periods. You can either pay interest as you go or let it accumulate on top of the principal amount of the loan, which will increase your total repayment amount.

Looking at thousands of dollars borrowed over a typical four-year enrollment, this interest deferral can make a substantial difference in the amount you’ll need to repay.

How does interest work on student loans?

As with any loan, your student loan will charge interest. Understanding how the interest process works is key to ensuring you know how much you’ll be expected to repay on either a federal or a private student loan.
Interest on a student loan will vary depending on whether you have a private or federal loan as well as whether it’s a subsidized or unsubsidized loan. With federal loans, Congress determines the interest rate, while for private loans, the lender sets the rate. Most loans won’t require payments while you are enrolled, but they may still be accruing interest during that period.
Federal loans can be subsidized or unsubsidized. A subsidized loan is offered to student who demonstrated financial need, and it provides interest advantages. An unsubsidized loan does not make these allowances for financial need. If you have a subsidized loan, the government pays any interest that accrues while you are enrolled, for six months after graduation, and during periods of half-time or lower employment.
With an unsubsidized federal loan or a private loan, however, you’ll be responsible for the interest that accrues during those periods. Considering that you’ll likely be borrowing tens of thousands of dollars, compounding interest over a 4-year degree program can substantially increase your loan balance, which makes a subsidized federal loan a significantly more attraction option if you qualify.

How much money is safe to borrow for school? Does it depend on my major?

Undergraduates starting their path through higher education must make educated judgments concerning student loans. The key to a successful financial future is finding a happy medium between the borrowing you do today and the money you make with your degree after graduation.

If you need to borrow money for college, use these tips to stay in the safe zone:

  • The amount of money you borrow should be less than the amount of money you expect to make during your first year after graduation.
  • Avoid taking out loans that will require more than 10% of your annual gross income after graduation.
  • Borrow no more than 125% of the gap between your net education expenses and the amount of money you can put toward those expenditures from income and savings.
  • Keep your entire loan debt below fifteen percent of your projected wage after graduation.

The amount of money you’ll need to borrow is highly dependent on the field of study you choose. To help you save money regardless of your major, use these tips:

  • Research the need for people with your skill set in the job market. Jobs in lucrative fields tend to provide more stability.
  • Enroll in undergraduate programs that prepare students for occupations that pay more than others to alleviate the burden of college debt.
  • Consider enrolling at community colleges and vocational schools to learn skills and earn certifications at a lesser cost than four-year universities.
  • Earn money and gain work experience via internships and cooperative education programs that are available through certain academic programs.
When will I have to pay back my loans and how much will it be?

Generally speaking, you’ll have to start paying back your student loans six months after you graduate
or leave school. There is an exception for Perkins Loans, but it only grants you an additional three months before payments become due. Be aware that if you drop below half-time enrollment, you’ll also have to begin making payments in six months.
To find out how much you’ll owe, you’ll need to factor in the following:

  • Your loan amount
  • Your interest rate
  • Who provided your loan

An easy way to find out approximately how much your loan payments will be is to use a loan simulator or loan calculator.
For example, if you have $28,400 left, your loans will likely run you around $297 a month for the next 10 years. This amount includes an interest rate of 4.66 percent. Over the course of 10 years, you’ll end up paying $35,583 to pay off what was originally a $28,400 loan. This means you’ll pay almost $7,000 in interest.
Another scenario shows you paying for your entire education with a loan. Since the average four-year college costs approximately $104,000, you’ll need to extend your payments by at least 30 years. Doing this with 4.66 percent interest will require you to make payments of $537 every month for 30 years. It’s worth noting that taking out a loan of this size will force you to accrue more than $89,000 in interest.
As you can see, taking longer to pay back your loan will make you pay more interest. Therefore, it’s always in your best interests to minimize how much you borrow and how long you have to pay it back.

How does student loan forgiveness work? Will I qualify?

There are a number of different ways to become eligible for student loan forgiveness. The most common method requires you to have made 120 months worth of payments, or 10 years, before you’re eligible.
Public Service Loan Forgiveness (PSLF) requires you to have direct loans, pay off 120 months’ worth of your loan and work full-time for a qualifying employer. Professions that may qualify for PSLF include:

  • Teacher
  • Government Employee
  • Nonprofit Worker
  • Medical Professional

Teacher Loan Forgiveness is another program, which allows up to $17,500 to be forgiven as long as you’ve spent the last five years working for a low-income school. Additionally, if you have a Federal Perkins Loan, you can get it partially or fully discharged if you’ve completed volunteer service or work for an eligible employer.
Military service members may be eligible for loan forgiveness if they have federal student loan debt. Military members may also qualify under PSLF.
Individuals who become disabled may be eligible if they become permanently and totally disabled. Other qualifications include having a Perkins Loan, a Federal Family Education Loan or a direct loan.
Those who pay their loans through an income-driven repayment plan (IDR) may be eligible if they’ve made either 20 or 25 years’ worth of payments. Be sure you have an updated application on file.
Finally, people who are affected by the following may also be eligible for student loan forgiveness:

  • Your school closed
  • Your school misled you
  • You’re a parent who borrowed money for your child
  • You’ve declared bankruptcy
  • You’ve become a victim of forgery
  • You’ve died

After College

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What if I can’t afford my student loan payments?

It’s not uncommon for student loan payments to range from $500 to $1,000 a month. This can be an extreme burden whether you have any other debts or not, but there are ways that you can make your payments easier to deal with until your financial circumstances change.
Get on an Income-Based Repayment Plan
An income-based repayment plan may allow you to reduce your payment to $0 a month depending on how much you earn in a given year. Any student loan balance that is not repaid within 20 or 25 years will be forgiven, but you may owe federal income tax on that balance unless certain criteria are met.
Seek a Deferral or Forbearance
A deferral and forbearance both allow you to pause your student loan payments for a period of several months. However, the key difference is that interest typically ceases to accrue on your outstanding balance during a deferral period. However, depending on the type of loan you have and who your loan servicer is, it may be easier to get a forbearance as opposed to a deferral.
Refinance Your Loans
Consolidating your federal loans may allow you to reduce your interest rate without losing key protections offered by the government. However, if you want, you can refinance federal or private loans with a private lender to reduce your interest rate and your monthly payment at the same time.

Is graduate school more expensive than college?

Graduate school can be a great way to enhance your academic credentials, but after paying for years of college, it can sound stressful to pay for even more classes. Fortunately, graduate school isn’t always as pricey as college. Here’s what you need to know about the price of graduate school versus college.

On average, college costs $36,436 per student per year. Prices are significantly lower for in-state students, who pay about $10,000 less per year, and costs are also lower for those who attend public school instead of private school. Meanwhile, graduate school costs an average of $19,792 per year.
Not only is graduate school cheaper to pay for each year, it’s also cheaper overall. While a college degree is typically four years of school, a graduate degree is typically two years of school.

Another great thing about graduate school is that you don’t necessarily have to pay all the expenses yourself. Compared to the number of interested students, there are more scholarships and grants available to graduate-level students. Many employers are willing to provide tuition assistance for employees who get graduate degrees in their field, and many schools offer paid teacher’s assistant positions to grad students. All of this tuition assistance reduces the amount of money graduate students have to pay for their training.

Have a question you don’t see answered here? Send it to us on our contact page and maybe we’ll add it to the list!