Boston-based nonprofit American Student Assistance has 13 tips for students and their families planning out how to pay for college.
Living at home instead of on campus
While you might miss out on some of the undergraduate ‘college experience’ by commuting, you improve your chances to live independently instead of living at home after graduation because of your student debt. Consider it a small sacrifice for greater financial freedom and independence in your 20s.
For parents: Don’t forget about your other children
Keep in mind younger children and their potential college choices when reviewing the current year’s financial aid award. Don’t blow the budget on one child if you anticipate paying college costs for multiple children.
Consider a gap year
Students who complete a term of national service in an approved AmeriCorps program can earn the equivalent of the maximum Pell Grant – regardless of their income level. An additional bonus: many colleges match the award.
Maybe you’ll even get your picture taken with Jason Bateman like this AmeriCorps member did.
Remember college is multi-year commitment
Remember to multiply your award by four (or sometimes more) years as an estimate for your full undergraduate education cost. If you are receiving $5,000 in loans in your first year, you will likely need to borrow at least $20,000 or more by the time you graduate.
Estimate monthly student loan payments
Now that you have an estimated total debt at college graduation, you can get an idea of what your monthly payments will be. Use online tools (free registration required) to compare various repayment plans, and consider the salary required to make your payments consistently.
Federal before private
Federal direct education loans have repayment options and other rights for borrowers that private loans may not have. Explore all federal loan options before taking out private loans, and if you co-sign for a private loan, find out the necessary repayment requirements to remove yourself as a co-signer.
Be open to transferring schools
Assess your ability to pay for a particular school every summer. If the numbers don’t add up, don’t be afraid to shift course and transfer to a less-expensive school.
Understand how federal work study works
This isn’t free money, and it won’t come off your tuition bill; it’s like an offer to apply for a job on campus. You will need to put the leg work in to make the money, so it may be helpful to ask what the job search is like on-campus.
Know merit aid requirements
Many merit scholarships will require you to meet certain academic standards to continue to receive funding each year. Make sure you understand what these requirements are, whether it’s maintaining a minimum GPA, staying enrolled at least half-time, or sticking with a particular academic program.
One-time vs. recurring awards
Some schools will offer what seem to be large scholarships, but check to see if they are for each year or will be disbursed over the course of four years. There is a big difference between a $40,000 scholarship each year and a $40,000 scholarship where you receive $10,000 each year.
Renewable vs. front-loaded awards
Not all financial aid is for all four years; some schools will award freshmen more merit aid, but then decrease it in subsequent years. Make sure you know what aid is available annually to you and which isn’t.
Don’t be afraid to appeal
You can request more money if the financial aid award just isn’t enough but be prepared to show documentation of why, such as job loss or high medical expenses. An appeal won’t always award more money, but it doesn’t hurt to try and you won’t lose any aid by doing so.
Chat with a professional
Stop by any of the American Student Assistance College Planning Centers for free help reading your financial aid award.
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