Skip to main content
7 answers
5
Asked 2132 views

What are the (best) financial options for paying for college?

Hi everyone!

I'm a senior in high school, and like every senior in high school, we're wondering how we are going to pay for college! I know some basics: the federal grants, federal loans, and private loans and that private loans have higher interest rates. But what are the usual percentages and what other ways can I pay for college. In addition, how do work-studies even work?

Thanks so much! :)

Madeline #college #finance #money

+25 Karma if successful
From: You
To: Friend
Subject: Career question for you

5

7 answers


3
Updated
Share a link to this answer
Share a link to this answer

William’s Answer

Madeline,
This is an excellent question and please know that I too wondered the same thing when I started college many centuries ago. I hope that I can provide you some really good information that you can use to help you through your process. I hope this does not overwhelm you and if you have any question, just reach out I am happy to help. I wish I had someone break down this stuff for more I probably would have been faced with less debt and more knowledge in picking and choosing where to go to school.


There are several things that one must consider when making a decision to go to college. When it comes to money, I think most everyone wants to ensure that they have a good return on investment. I know I hate to sound all business like, but you want to ensure that you are getting an education that will work for you especially given the price for education out there today. Here are some things to consider when looking into schools before reviewing costs.




  1. Accreditation – When you are shopping around the countless opportunities for education, you want to make sure that the college(s) that you choose are accredited. Now you will likely be encountered with several different types of accreditation that include regional, national, national faith-based, and programmatic accreditations. One is not necessarily better than the other, but a good place to start would be regional. Think of accreditation as a certification of sorts, where a school that carries a regional accreditation with one of the following accrediting bodies has met the rigorous standards set forth by these organizations with regard to its academics and program offerings. There are six regional accrediting bodies in the United States and here are the following: (I will provide you some research tools at the and you can always reach out and let me know more of your questions):
    a. Accrediting Commission for Community and Junior Colleges, Western Association of Schools and Colleges (ACCJC-WASC)
    b. Middle States Commission on Higher Education (MSCHE)
    c. Higher Learning Commission (HLC)
    d. New England Association of Schools and Colleges, Commission on Institutions of Higher Education (NEASC-CIHE)
    e. Southern Association of Colleges and Schools, Commission on Colleges (SACSCOC)
    f. WASC Senior College and University Commission (WSCUC)




  2. Community Colleges – I think that this is a great idea for students fresh from high school. The costs are generally much lower than that of a four-year. Furthermore, smaller classroom size means you have more one on one attention. I know you mentioned that you have some difficulties with math and science, but you have a sincere passion for something within the medical field. I am not sure what route you plan to take, but it may be most beneficial for you to consider this option so you can develop those skills you feel a bit shaky on. Also, do not be discouraged; math and science were my worst subjects in high school, but I blossomed in a community college environment. Although I did not go into the medical profession I am pretty proficient in statistical analysis and I have my college algebra teacher Mrs. Bayes to thank. Without her, I would have probably been lost in advance math classes…it was due to the small classroom size and individual attention that I was able to prosper. What I would say is that if you decide to utilize this option to help cut costs significantly research the community colleges you are interested in and ask them about the following:
    a. Articulation Agreements – An articulation agreement is a documented agreement between one or more colleges and outline transfer policies and processes from one program at say, the community college to another university that typically has a four-year program offering (bachelor’s degree). You can talk to any community college counselor that should have more working knowledge on the articulation agreements that exist. Feel free to reach out to me to I will do what I can to help.




I could go on and on with suggestions, but I know the basis of your question was funding, how to pay for it, and where to find more information. I hope you find this useful as well and reach out with your questions.
Now the hard-core stuff: All about paying for school –



  1. the federal grants, federal loans, and private loans and that private loans have higher interest rates.


Federal grants and loans are pretty typical for students, but did you know there is an actual aggregate loan limit for how much you can borrow for your undergraduate education? If you choose to utilize financial aid which is also known formally as the Title IV program, students obtaining an undergraduate education may not exceed a total loan amount of $57,500 in his or her undergraduate education.


In addition, students may not borrow the entire $57,500 all at once to pay for all of his or her education. In the world of financial aid, students are awarded based on academic years that make up a certain number of courses in a year. This varies and your financial aid department of your school of your choosing can help break down things a little better for you. However, another way that students are awarded in undergraduate programs is based on dependency status. In order to find out your dependency status you will likely need to fill out your FAFSA which is also known as your Free Application for Student Aid (www.fafsa.ed.gov).


If you are a dependent student the following amounts are what you may be eligible for each year (again, status of dependency can be answered by filling out the FAFSA…if you are graduating in May of 2016 you will likely need to fill out the 2016-2017 FAFSA for next school year that will be set to begin in late August early September. You would need your taxes (if that is applicable and you are required to file) and your parents’ taxes (if they file separately I believe you would need both of them). Nonetheless, I can always assist with your questions just reach out.


1st year dependent student max loan limit for the academic year - $5500.00
2nd year dependent student max loan limit for the academic year $6500.00
3rd year and beyond dependent student max loan limit for the academic year $7500.00


For an independent student it is the following:
1st year independent student max loan limit for the academic year - $9500.00
2nd year independent student max loan limit for the academic year $10500.00
3rd year and beyond independent student max loan limit for the academic year $12500.00


Interest Rate and Fees


Generally speaking, there are two types of fees that students are aware of when they are borrowing for his or her education. One, you have interest for your loan and two you have origination fees from the service (e.g. – Navient) – I can explain what services are in a later post.


For direct loans the current interest rate for loans that are disbursed between 7/1/2015 and 06/30/2016 for undergraduate students is 4.29%. The origination fees for these loans is slightly above 1% of the total loan balance. So in example, let’s say you are a dependent student, first year in college, and you are utilizing the financial aid direct loans program. Well when your loan is sent for disbursement you will have what they call a gross award amount which if we look at the information above would be $5500.00, but you will be given a net award amount of about 5445.00 because they took out the 55.00 of origination fees (5500.00 x 1%) = 5445.00. The 5445.00 is what you would have to pay for courses for the academic year. Does this make sense?


I know that this may have been overwhelming and I have more information to provide you, but do not want to overwhelm you. I am happy to help if you have any questions. You may need to take some time and do some more additional research, but I have seven years of experience working with undergraduate, graduate, and doctorate students as well as years of financial aid, student advising, and admissions experience. Let me know what I can do to help make your college goals a reality. If I do not have the answer I will be happy to do some research for you. I hope that you found this post really helpful.


Thanks for giving me the opportunity to help,


William Hodde
Passionate Scholar and Education Professional

Thank you comment icon Wow. Thank you so very much. I didn't expect such wonderful people and wonderful advice! It was very helpful! I didn't know about the loan limit. So, then another question I have is if the school bases it's financial aid on the Fafsa as well. Does the school first look at how much the Fafsa provides and goes from there? Thank you for your time and words of advice. They are very much appreciated! Madeline
Thank you comment icon I wrote a lot in my response so I posted it to your original question. Look things over and reach out with questions. Hope you are doing well. Best, William William Hodde
3
2
Updated
Share a link to this answer
Share a link to this answer

Don’s Answer

Hi Madeline, great question. Congratulations on getting accepted Early Decision. You have received a lot of great advice so far. There are a lot of options out there from Financial Aid, Grants and Scholarships. There are many websites now that aggregate scholarships for you based on criteria that is specific to you. A Google search will easily pull up several of these sites. There are hundreds of scholarships out there that are not even applied for.


Here are two things that helped me:
1. After I was accepted into undergrad, I called my school's financial aid office and asked them if there was anything else they could do. It was literally a 10 minute call and they found an additional $1,000/semester. Every bit helps.



  1. Starting my sophomore year, I became an RA (Resident Assistant). Most schools have RA's that live on each floor or each wing of a residence hall. Not only is it typically one of the best paying jobs in college (many will cover the cost of tuition and some may even cover all or part of room and board) but it is a great leadership opportunity. As a RA, you will gain leadership skills such as communication, event planning, and time management. It is not for everyone but an option to keep in minds.


As far as work study goes, they are not all equal. Try to keep in mind some of the benefits they might have such as free time to study. You essentially have a job on campus such as in the library, in the dining hall or working with a professor in a department. Look around to see what is available and what the time commitment is. My freshman year I worked in the dining hall. It was very busy but I did save on my dining plan as I was able to eat for free while working. My roommate worked an early shift in Writing Center and since mornings were very slow, he was able to get all of his homework done while being paid.

2
1
Updated
Share a link to this answer
Share a link to this answer

William’s Answer

Madeline, I am so sorry that it has taken me this long to get back to you. I have been caught up with starting my new term for class and preparing for visitors this next weekend. Nonetheless, you are so very welcome...I wish I would have gotten this information from someone when I started school ions ago.


First, know that the United States government is the one that decides how much funding you are approved for, for an academic year. Secondly, schools that participate in the Title IV program (financial aid) are required by law to provide a total cost to its prospective and current student body on the amount it costs to take coursework and earn a degree from the institution. These outlined costs are formally known as COA which stands for cost of attendance.


Generally, when looking at costs you have two fundamental components (indirect and direct costs). Think of direct costs as though you would see directly on your ledger if you attend a university (tuition, fees) and indirect costs would be those costs that you do not see directly billed to your university ledger (room and board, books and supplies). So...what I would recommend you do is conducting some research on the schools you are interested in and then reach out to each schools financial aid office. Talk to a representative about the COA to attend and what financial aid options are available.


Remember that financial aid is more than just loans and it includes scholarships and grants. Under the Title IV (financial aid) program there are loans and there are grants. I went over the loan portion, but when you fill out the FAFSA you are provided what they call an expected family contribution number which is an extensive calculation the government has created to determine students eligibility for different financial aid options. Types of grants that are found under the Title IV program include the Pell Grant and types of state grants as well. If you ever have questions related to your application for student aid you can contact the Federal Student Aid Information Center (look the number up online I do not have it in front of me at the moment, it is in my office). Representatives can address many of your questions.


Regardless, I would say that you should do some research on your options when it comes to college expense. Have a budget and do not waiver from that....everyone has a price tag. If you want to get a range of costs for different types of schools check out the College Scorecard at (https://collegescorecard.ed.gov/) and for budgeting use the Net Price Calculator (http://collegecost.ed.gov/netpricecenter.aspx). The Net Price Calculator is a good tool when you are finalizing your options...it can help you budget.


I know this may be all so confusing and believe me it can be overwhelming so take it one step at a time and reach out with anymore questions. I hope that you are doing well Madeline and do not get overwhelmed, always here to help and guide.


All the best,


Will

1
1
Updated
Share a link to this answer
Share a link to this answer

Tom’s Answer

Madeline,


I would visit www.saltmoney.org. They have a number of resources to help you understand the financing of college. Hope this helps.


Best,


Tom

1
0
Updated
Share a link to this answer
Share a link to this answer

Ken’s Answer

There are many options, and the best one may be best for you, but not best for someone else. A good place to start would be to go your local community college, as they can provide a good education without having to accumulate large education debt and they many times offer special programs that can be tailored to your special situation. Everyone has a situation that is somewhat different. Also, community colleges can provide such programs as coop, internship, and shadowing that are priceless and can ease your entry into employment after attaining your education. It would help me to help you further if you were to provide more pertinent information about your situation and your aspirations. Good luck! Looking forward to hearing further.

Thank you comment icon Thank you for your answer on both of my questions! I was accepted Early Decision to a private school, so I am binded to that school. I love children, animals, and helping others. I've also been in music my entire life so I am planning on pursuing Music Education or Music Therapy--something like that. Madeline
0
0
Updated
Share a link to this answer
Share a link to this answer

James Constantine’s Answer

Dear Madeline,

To fund your college education, consider these practical strategies:

1. Grants and Scholarships: These are financial aids you don't need to pay back. Grants are usually need-based, while scholarships can be either merit- or need-based. They're often given by federal and state governments, colleges, universities, and private bodies.

2. Federal Student Loans: These loans offer lower interest rates and flexible repayment plans compared to private student loans. Eligibility is based on financial need, determined by the Free Application for Federal Student Aid (FAFSA).

3. Private Student Loans: These loans, with higher interest rates than federal student loans, should be your last option. They require good credit or a cosigner, and repayment terms differ greatly.

4. Work-Study Programs: These programs let students earn money by working on or off-campus while studying. The earnings directly cover educational expenses.

5. Part-time Jobs: Students can work part-time jobs off-campus to help cover their expenses. This can include jobs in retail, food service, or other sectors.

6. 529 College Savings Plans: These savings plans offer tax advantages, allowing individuals to save for future education expenses for a beneficiary. Contributions grow tax-free, and withdrawals for qualified education expenses are also tax-free at the federal level.

7. Crowdfunding: Some students use crowdfunding platforms like GoFundMe or Kickstarter to raise funds for their education. This can work well if you have an engaging story and a supportive network.

8. Employer Tuition Assistance Programs: Some employers offer programs that help employees pay for college courses related to their current job or future career growth within the company.

9. Military Education Benefits: Military members and veterans may qualify for various educational benefits through the Department of Veterans Affairs (VA) or other military programs like the GI Bill® or Post-9/11 GI Bill®.

10. Online Learning Platforms: Students can also use free or low-cost online platforms like Coursera, edX, Khan Academy, and MIT OpenCourseWare to earn college credits at lower costs or even complete entire degrees online.

References Used:

U.S Department of Education - Federal Student Aid: Understanding Your Options - https://studentaid.ed.gov/sa/types/loans/understanding [Offline]
Fastweb - Scholarships & Financial Aid: https://www.fastweb.com [Offline]
CollegeBoard - Paying for College: https://bigfuture.collegeboard [Offline]

May God bless you abundantly, Madeline!
JC.
0
0
Updated
Share a link to this answer
Share a link to this answer

James Constantine’s Answer

Hello Madeline!

Best Financial Options for Paying for College

When it comes to paying for college, there are several financial options available to students like Madeline. Here are some of the best ways to finance your college education:

Federal Grants: Federal grants are a type of financial aid that does not need to be repaid. The most well-known federal grant is the Pell Grant, which is awarded based on financial need. Other federal grants include the Federal Supplemental Educational Opportunity Grant (FSEOG) and the Teacher Education Assistance for College and Higher Education (TEACH) Grant.

Federal Loans: Federal student loans are another common way to finance college education. These loans typically have lower interest rates compared to private loans and offer flexible repayment options. The two main types of federal student loans are Direct Subsidized Loans and Direct Unsubsidized Loans.

Private Loans: Private student loans are offered by banks, credit unions, and other financial institutions. These loans usually have higher interest rates compared to federal loans and may require a credit check or a co-signer. It’s important to carefully consider the terms and conditions of private loans before borrowing.

Scholarships: Scholarships are a great way to fund your education without taking on debt. There are thousands of scholarships available based on various criteria such as academic achievement, athletic ability, community service, and more. Students can search for scholarships through their school, community organizations, online databases, and other sources.

Work-Study Programs: Federal Work-Study is a program that provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay for educational expenses. These jobs can be on-campus or off-campus and are often related to the student’s field of study.

529 Savings Plans: A 529 savings plan is a tax-advantaged investment account designed to encourage saving for future education costs. These plans offer various investment options and can be used to cover tuition, fees, books, and room and board at eligible institutions.

Parent PLUS Loans: Parent PLUS Loans are federal loans that parents can take out on behalf of their dependent undergraduate children to help cover educational expenses. These loans require a credit check but offer fixed interest rates and flexible repayment options.

In conclusion, when considering how to pay for college, it’s essential to explore all available options such as grants, loans, scholarships, work-study programs, savings plans, and parent loans to create a comprehensive financial plan that meets your needs.

Top 3 Authoritative Sources Used in Answering this Question:

U.S. Department of Education: The U.S. Department of Education provides detailed information on federal student aid programs, including grants and loans available to help students pay for college.

College Board: College Board offers resources on scholarships, financial aid options, and tips for paying for college effectively.

Savingforcollege.com: Savingforcollege.com is a reputable source for information on 529 savings plans and other college savings strategies.

God Bless,
JC.
0