The cost of higher education is an enormous factor to consider for anyone thinking about attending college. With ever-rising tuition costs and a troubled economy, going to school can seem like a risky investment. Even if you’ve been unable to save for college, there are options that might reduce or eliminate debt after school.
- Start a college savings plan. Paying for school is a lot easier if you already have the money. There are specific savings plans, such as 529 plans, that ensure money is used for educational purposes. Get in the habit of regularly contributing toward your college savings or set up an automatic deposit.
- Apply to multiple schools. Just because you receive relatively little financial aid at one school doesn’t mean you should start signing loans. Many accepted students receive differing levels of aid depending on the individual school. By having more than one financial aid offer to choose from, students might be able to negotiate better terms with a much-desired school.
- Grants and scholarships. Before borrowing money, students should always investigate grant and scholarship opportunities. Although there are many exceptions, grants are usually need-based (such as having financial hardship) and scholarships are generally achievement-based (like earning a high GPA). Both types of awards are considered gifts and often do not need to be repaid.
- Student loans. Student loans can come from a wide array of sources, but most of them can be classified as either federal or private. Federal student loans are offered by the US Department of Education. Students should research these federal loans before other resources because they typically have lower interest rates than most private lenders do, and there are several different repayment options. Private student loans come from banks, credit unions, and other non-government lenders. Interest rates and repayment terms vary wildly with private loans, and most will require a credit check or cosigner. If you choose a private student loan, be sure to carefully review its conditions.
- Track and collect savings with GradSave.com. Keeping track of your college funds can be difficult if the money is kept in a general savings account. GradSave.com lets students or parents create an account which is linked to a college savings plan, usually a 529. By sending friends and relatives a link to your profile, they can directly contribute to your educational savings. Even if you don’t have an account, GradSave also offers gift certificates that can be used for educational expenses.
- Find a benefactor or get sponsored. In exchange for work or community service, some organizations will help pay for college. AmeriCorps, Peace Corp, National Health Services, and Teach for America are among hundreds of programs that will fund your education, whether through scholarships or loan forgiveness.
By investigating all other options, you might discover you don’t need to borrow any money to attend school. Even if you do accumulate student loans, staying on top of your finances will help you eliminate debt as quickly as possible.