Although the new school year has only just started, especially for those that are going off to college … the thought of how to pay for school is probably already top of mind for many. And with the standard open enrollment period for the Free Application for Federal Student Aid (FAFSA®) just around the corner, now is a great time to begin your research and become familiar with your college financing options.
Depending on where you’re at on your college journey, you’ve most likely already realized that it’s not just college tuition that you have to worry about. There are living costs, books and supplies, ongoing food costs and so much more! So, one of the first steps that we encourage you to start with is considering where and perhaps which type of college you will choose. Costs vary drastically between private and public schools, in-state vs. out-of-state, and four (4) year universities versus two (2) year colleges, so it’s important to know the costs ahead of time to determine how much you might need.
Once you’ve identified what the cost of college is going to be (or at least have a good estimate), that’s when you’re going to want to research and leverage as many financial resources as possible. That’s where FAFSA comes in. FAFSA is an application for federal student aid which is required to be completed annually while enrolled in college. The U.S Department of Education starts to accept applications on October 1st, so the earlier you submit your application, the better! This application will determine what financial aid(s) you may be approved for. Financial aid can come in the form of a federal student loan (which must be repaid once you graduate or are no longer enrolled in college), or in the form of a grant (which does not have to be repaid). Every university requires students requesting aid to complete the FAFSA application, as each university has different guidelines and processes in place. You can visit FAFSA for more information and to submit your application.
Once you’ve completed your FAFSA application and you’re presented with financial aid offers, the next step will be to take some time to review and determine what type of aid(s) you’ve been awarded (grants or loans). If you qualify for a grant, the great news is you do not have to pay it back. Grants are, in essence, a cash award as needed (not sure what this part meant). If you qualify for loans, it’s important to determine how much you need or want to accept. If approved for federal student loans, make sure you know which type of loan you’re being presented with. Federal Stafford loans will come in the form of subsidized or direct unsubsidized loans. Subsidized loans are loans where that the U.S. Department of Education will pay the interest that accrues on your loan while you are actively in school, while unsubsidized loans immediately accrue interest, but unfortunately you will be responsible for paying once you begin to pay your loans (traditionally within six months of graduating or no longer enrolled in college).
The good news is, in addition to FAFSA provided aid, there are additional options for you to consider to assist with paying for college. From work study programs, employer assistance programs, military GI bills, and of course, scholarships. Scholarships are similar to grants in that they don’t have to be repaid. They can come in a variety of increments, have different requirements, and are awarded by a variety of different corporate to non-profit organizations! There are a variety of resources available, the key is to look for them. One tool we like to recommend is FastWeb. Here, you can find scholarships based on academic performance, gender, race, and even area of study.
To take a deeper dive into all college financing options, we invite you to join us for a College Financing Solutions education session this month.