September 14, 2012 : Dominique Brown - Guest Contributor
5 Ways to Pay for a College Education When You Can’t Afford It
Ed Note: Financial Planner Dominique Brown of Your Finances Simplified joins us today to chat through a few creative ways to finance a college education — even if you think you can’t afford it. Enjoy!
With the total cost of going to college reaching $30,000 to $50,000 annually, more and more students and parents are burdened with the problem of how to pay for a college education.
Fortunately, there are ways to lower your personal financial contribution. Some of these options can even get you a free ride to college! But before you apply for any form of aid, do your research. Go over the pros and cons and pick the option that best fits your situation, and don’t ignore the fine print – many of these means come with conditions. Here’s a run-down on the some of your basic options.
Grants are small amounts of money that are considered gifts. Typically, they won’t cover all of your expenses, but they can contribute a few thousand to your college fund. Unlike the other forms of financial support, grants are completely free, which means there is no need to pay back grant money as long as it’s used for the specific purpose for which it was intended. In addition to your academic potential, grant bodies often take a look at your socio-economic background to determine whether you’re a good candidate.
While there are various types of grants available, they can typically be bucketed into two groups.
- Subject-specific grants offer money to students who are taking courses in priority fields or under-populated programs such as science and mathematics.
- You can also look into student-specific grants, which take into account the student’s profile and financial situation. Some grants give support to students who will be among their family’s first generation to go to college.
2. Financial Aid
Colleges and universities often have a division that takes care of financial aid. They look for contributions from alumni and corporate sponsorships, and they often have a budget from the school to be able to give support to low-income, deserving students. You normally apply for financial aid the moment you apply for admission to the school. Depending on the financial situation of your family, financial aid can be partial or cover full tuition and fees. In some cases, even a living allowance can be given to those who don’t have the financial means to pay for the miscellaneous expenses.
Often times, financial aid is given in exchange for part-time work in any of the school offices. These are typically called work-study programs. Many colleges reserve a number of paid positions for students who are participating in these programs, so this is definitely something you should discuss with your college’s administrative office, if you haven’t already.
3. Academic/Athletic Scholarships
Of course, colleges and universities want to recruit the best and the brightest young men and women. This often includes athletes and the top 5% of the graduating high school class. If you belong to this group, then you are in luck! Many colleges will offer you great scholarships just to enroll in their school. If you want to go to a certain school, yet your best offer came from another university, your preferred school may match the better offer.
The caveat: academic scholarships require you maintain good standing, and you will often lose scholarships if you commit an academic violation, such as cheating, or if you are arrested. You will also be required to maintain a certain grade point average.
4. Student Loans
As the name implies, in this case, the student will be borrowing money to pay for his or her college education. Student loans can be obtained from either the federal government or from private lending institutions. What most people fail to realize is that almost everyone can apply for some form of student loan.
Pay close attention to the interest rate of your loan. A high interest rate can actually increase the amount you owe over time. Also, check when the interest will start to accrue and when the payback period starts – all these can greatly affect your career choices upon graduation, so borrow carefully!
5. Corporate Sponsorship
Corporations often have sponsorship programs, aimed at developing young talent – some of them also have programs for the children of their employees. Most of the time, these companies give a school funds to be disbursed to deserving students at the school’s discretion
In some situations, in exchange for paying your college tuition, these companies will ask you to sign a contract of return service, meaning you will be required to work for the company for a certain number of years or meet some other requirements.
How I paid for college…
As a single parent, my mother didn’t have the means to save for my college education. Although I was smart and athletic, I was not able to land an academic or athletic scholarship. My family faced the same issue that many people face when it comes to getting a college education: we couldn’t afford it. So… we took out loans. My mother took out a parent plus loan for the bulk of my college education and I took out Stafford loans to cover the rest. Fortunately, my student loan interest rates are 3.25% instead of the prevailing 6.8%!
Have you tried any of these ways to pay your tuition? Tell us about your college experience!