Helpful Student Loan Alternatives
If you are planning to head off to college soon, you have probably at least thought about ways to pay for your education. Student loans are one of the most commonly mentioned methods and many students do use them to fund their dream of going to college.
The biggest downside to student loans is that you have to pay them back and those payments start soon after you graduate or leave college. This means that you already enter into the working world with debt in your name that needs to be paid down. Oh, and the debt amount is usually something shocking like $30,000 or so.
Unless you come into a cash windfall, you will find that you are making student loan payments for the next 10, 15, 20, or even 25 years! Ah! You may just want to scream and rethink the idea of student loans at this point. Before you do, let’s take some time to talk about the student loan alternatives that are available for you to check out and apply for.
Scholarships are a free source of money for you to get for college. If you are awarded a scholarship, no matter the amount, you do not have to pay any of it back to the person or organization who awarded it to you.
Scholarships are not hard to come by as there are many out there, but it does take some research and time to find ones that you are qualified to apply for. One of the biggest mistakes you can make is applying for all scholarships without looking to see if you meet the requirements.
For example, if a scholarship is available for a minority student and you are not from a minority country or you do not fit into the minority group that the scholarship targets, you are wasting your time and the organization’s time.
Scholarships are awarded in different amounts and it is up to the scholarship’s grantor to decide how much money a student gets and the requirements that the student must meet. Often times, you will see scholarships divided into two categories – merit based and financial need based.
Financial need based scholarships will often require you to prove that you are in need of the money, whereas merit based scholarships will often require you to show that you have the grades, you have participated in being an excellent leader, etc.
If you want to apply for scholarships, you will first need to find them. You can talk to your school and find out what resources they offer and if they can point you in the right direction. Many schools have their own scholarships too. Also, you can perform a Google search to reveal available scholarships from major companies such as Coca-Cola and similar.
2. Federal Pell Grant
The Federal Pell Grant does not need to be paid back, but you must qualify to receive it before it is awarded to you. This grant is considered to be need based and you must be enrolled in an undergraduate degree program. In addition, you cannot hold a higher degree such as a professional or Bachelor’s degree.
The Federal Pell Grant is awarded to students based on their financial need, their student status, the cost of attendance, and the student’s plans to attend school either for a full academic year or less.
The amount you can receive for the 2016-2017 school year is $5,815. The amount you qualify for will be based on your need and calculated when you fill out your FAFSA.
There is a limit on the number of times you can receive the grant. This grant is limited to 12 semesters of school or approximately six years.
3. University Grants
University grants are often offered by the school you go to, but not all schools will participate in the program. Typically, universities will offer both need based and merit based grants and scholarships for you to take advantage of.
Often times, the student will automatically be awarded the grant if their FAFSA shows a financial need, but some students may be required to fill out applications and go through the formal steps.
The amount of money you receive from a university grant will depend on the university and how much they have allocated to each student. Often, if you have less of a need than another student, you will receive less per semester.
4. Federal Work Study
The Federal Work Study program is a financial aid program that allows students who have a financial need to work in a part-time position to earn funds to help pay for their college education. Students can be either undergraduate or graduate status.
The work study program will look at your financial need based on your FAFSA and then determine the amount of aid that you can receive. You do have to work to earn the money. Most of the positions that are offered pay the state’s minimum wage.
One of the benefits of this program is that the employer you work for must work around your schedule where as a traditional employer does not have to.
Most of the jobs are located right on your college campus and you can expect to hold a position in the administration office, library, bookstore, café, and similar. It is possible to receive a job off campus as well.
When you participate in the Federal Work Study program, you will receive hourly payments and you are paid via a check or direct deposit. You can use the money you earn to live off of while you are in college or you can apply the money directly to your tuition, books, meals, room and board, or any other college related expenses that you have.
If you plan to attend college, but you do not want to have to worry about student loans and debt, check out the above four alternatives to student loans. Each of these options provides you with a way to pay for college for free. The less money you have to borrow now, the better.