If you are just graduated or are going to graduate from high school soon and aren’t sure what to do next, check out my previous posts: I’M GRADUATING HIGH SCHOOL…NOW WHAT; HOW TO FIND A JOB WITH LITTLE OR NO EXPERIENCE; and HOW TO CHOOSE A COLLEGE OR UNIVERSITY.
Once you have made your decision about attending a secondary school after high school, you need to start thinking about how you are going to pay for it. Any education you get past high school, at least currently in 2021, is going to come at a great expense. Usually, this expense is worth it because you will be able to use the credentials and education to get a better career that pays more money. At least, this is the goal. So, once you have looked into what you want to do for a living, which schools offer the best education for your choice, and which school you want to attend, it is time to start applying for financial aid.
Financial aid comes in many forms. Some financial aid is backed by the government, some are loans to be paid back, some are grants that are given to you to keep, and some is expected to be paid by you and your family. The first thing you need to do is talk to your family about how much they plan on contributing, if at all, to your secondary education. The second step is to fill out FAFSA form online.
FAFSA (Free Application for Federal Student Aid) is a form you and your family fill out online every year to determine your eligibility for federal financial aid. Filling out the FAFSA the first time will seem daunting at first, but it becomes easier each year when you renew it. The FAFSA will help find you money in terms of state and federal grants, student loans, parent loans, and work study. It will also make a determination on how much your family is expected to contribute. Once this application is filled out, it will send in your information to the school of your choice, making the process much easier for you. If you haven’t decided on one school, apply anyway and list all of your choices. Once your application has been processed, you will get award letters from each school, allowing you to compare and make the best financial decision for you.
The information the FAFSA will ask you for is your personal information, your high school information, and your parent’s financial information. If your parents are separated, you will only need to choose one to provide information.
WHAT KINDS OF AWARDS CAN I EXPECT FROM FAFSA?
- STATE AND FEDERAL GRANTS: Grants offer money to you based on your need, the number of children in your home and other statistical information that you provide. You can think of grants as FREE MONEY. The catch, however, is that you need to complete school in order to keep the money. If you drop out of college, you will be expected to pay back any grant money offered to you. Your school may also offer you a grant as an incentive to attend their school, but typically you must be able to maintain a certain GPA (grade point average) or attend a certain program or branch of their school.
- STUDENT LOANS: Loans, as you may be aware, are money that you need to pay back with interest. The advantage of taking out a student loan is that you do not have to repay until 6 months after you stop attending college. The drawbacks…are many. I am sure you have heard the recent debates about student loans and how easy it is to take out too much and not be able to pay it back. To learn more about student loan debt, check out my post DEBTS: AUTO LOANS AND STUDENT LOANS. Student loans come in many forms…federally backed student loans, private student loans, PLUS or parent loans, subsidized, unsubsidized…it can be very confusing. Federal student loans usually offer a lot more benefits, especially when it comes to repayment options in the future. Private loans may have higher interest rates, may require a cosigner or collateral, may expect payment during your enrollment, may not offer forgiveness or repayment options. Parent loans (PLUS) loans are for parents to take the money out in their name and be responsible for your education, but offer the same drawbacks as private loans. Subsidized loans are given to students who demonstrate financial need on their FAFSA, while unsubsidized is not based on financial need. There are limits to what can be borrowed each semester with each type of loan. (To learn more, please visit https://studentaid.gov/understand-aid/types/loans).
- WORK STUDY: Work study allows students who show financial need an opportunity to get a part time job while taking classes in order to help pay for college expenses. Usually, jobs are available on campus in your books store, library, cafeteria, offices, etc. and your work study acceptance will help you find one of these jobs. There are some job opportunities available off campus, but you need to check with your school to see if they are available to you. The drawback of work study is that you are only allowed to work a specific number of hours as determined by your FAFSA. This is beneficial, though, so that you can balance school and work.
WHAT OTHER TYPES OF FINANCIAL AID CAN I GET?
The FAFSA is a large part of your financial aid package, but there are other things that can help contribute to your education if you are unsure about going into student loan debt. (Remember, student loan debt is VERY hard to get out of, so please make wise choices and get help from a financial counselor if you can).
- SCHOLARSHIPS: Your high school guidance counselor probably talked to you about scholarships, and I am sure you have heard of scholarships before, but what do you really know about them? I know when I was in school, I thought scholarships were only based on academic or sports achievements. Well, there are plenty of those out there, but there are plenty of others as well. The first place to start looking for scholarships would be your high school. There are many ways to apply for different types based on your strengths. The next place to look is https://www.scholarships.com/. Scholarships.com will ask you a whole lot of questions about yourself and then look for scholarships that match things like your ethnicity, your interests, your goals, your community activities, your strengths, your grandfather’s involvement in Veteran’s programs…and so much more! There are scholarships out there for just about anything, and even if you have to write an essay or send a video for only $500…that is worth at least the cost of your books for a semester! This is FREE money!! My credit union offers scholarships, so look at places you are your parents frequent and see what they offer. Your future college may also offer you scholarships throughout your enrollment, so make sure you look for them every semester.
- 529 PLAN: Someone in your family may have opened up a 529 account for you at some point when you were a child. If so, CONGRATULATIONS! A 529 account is an investment plan that someone sets up for you and doesn’t have to pay taxes on, as long as you use it for college tuition and related expenses. Most states offer 529 plans now, and can be used at qualified colleges. If you do NOT use the money for college, you will have to pay the taxes and a penalty fee. If, however, you are offered a full scholarship to college AND you have a 529 available to you, the fees are waived for you.
- CASH: Some people choose to only go to college if they can afford to pay cash as they go. This is a great way to avoid any student loan debt. How is this possible, you may ask? First, you need to find the most affordable school you can attend. Look into the flexibility of taking part time classes while you work full time to pay for classes, make sure there is no time limit to graduation so that you can take as much time as you need to complete your degree. Only pay for what you need…live at home and commute or take online classes, don’t sign up for meal plans, borrow books or buy used as often as possible. Keeping college costs down IS possible and saving enough before you start attending and then really keeping track of budgeting and planning (Read more about BUDGETING here) will help you avoid the dreaded student loan debt. You may tire yourself out working and hustling while maintaining your classes, but the reward will be so much more worth it to you in the long run.
As you can see, there are many way to pay for college and financial aid is available to every one in some form or another. Before you tie yourself down to student loan debt, look into all of your options, apply for scholarships, look for that free money, and see what you are able to pay for on your own. Take out loans if you need to, but have a plan on how much you NEED to take out and how you are going to pay it back.
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