You've done it. You finished high school and decided to pursue higher education (a wise move, given stringent requirements for good jobs and the sore lack of them these days). But there's still a monkey on your back, and you wonder how to pay for college. True, education is a HUGE investment, but there are lots of ways to pay for it. Take a look.
1. Out of pocket (or your parents')
While there's a very good chance that you will not have to absorb all college costs yourself, few students go without having to pay anything (i.e. full-ride scholarships, "free tuition babies" of those working at universities, etc.). If you don't fall into the free categories, you will have an EFC (Expected Family Contribution) which the federal government expects your family to put forth toward educational costs (amount determined by family income). And indeed, some students are well-off enough to pay for school without any assistance and thus pay all expenses.
This second "How-to" covers any sort of money borrowing you may do to fund your education. Loan money falls into two prominent categories: federal and private. Private loans are those obtained via your bank or other financial organization, requiring an institution-specific application and other materials. They typically have higher interest rates than their federal counterparts but are nonetheless valuable to those needing them.In mentioning federal loans, one term springs to mind: FAFSA. Ok, it's an acronym, and it stands for Free Application for Federal Student Aid. The FIRST thing you want to do if you are considering any sort of government educational assistance is submit this (application period: January 1st-June 30th of every year). Commonly-awarded federal loans include the Stafford and Parent Plus Loans (for more information on these and more, check out education loans). Remember that any borrowed money must be repaid upon graduation.
3. Education Tax Benefits
Certain tax benefits help students offset educational costs, and include tax credits, tax deductions and exclusions from gross income. Technically it is not money you’re getting for school, but you can think of it the same way because it is money you’re saving. For example, the Lifetime Learning credit gives students up to $2000 in income tax credit based on the first $10,000 spent on tuition each year. Additionally, college students who took out loans can get the Student Loan Interest Deduction. Student loan borrowers can nix up to $2,500 in interest as an income exclusion.
While you ponder how to pay for college, consider pursuing some free money. Scholarships may be obtained in a variety of ways. Writing an essay, demonstrating exceptional skill in some area, filling out an entry form for a contest-like award and earning spectacular grades are all ways to become eligible for various awards (sometimes totaling in the thousands). Check out some useful sites for scholarship ideas.
This is another fairly easy financial aid option for students. Again, be mindful that FAFSA completion is necessary for this aid form, but workstudy doesn't require much paperwork itself. The FAFSA comes into play here to determine your eligibility to participate in a workstudy program at your school. If your family income is too high, you will most likely be ineligible to obtain government money for working at your school. Participating, however, creates wonderful opportunities to build work or field experience and save up to repay loans. Positions are limited and HIGHLY sought-after, so move your tail and apply at school ASAP.Still need help? Contact a Financial Aid Consultant for more solutions, and never wonder how to pay for college!