If college is on the horizon for your child or a student you know, paying for it may cause heart palpitations when you consider the level of student loan debt that now exists for young people. Take heart though, educating yourself about payment options is key for figuring out the best game plan for achieving educational goals. The good news is you have options for paying for college, and in many instances, students can rely on a combination of sources to cover their college expenses.
The four basic types of financial aid are grants, scholarships, work-study, and loans. The first requirement for eligibility to receive most types of financial aid is completion of the FAFSA (Free Application for Federal Student Aid). A student’s FAFSA results typically determine eligibility for grants (i.e. Federal Pell Grant, state grants, institutional grants). A grant is free money in that it does not have to be repaid.
The other free money available to students is scholarship money, and there are thousands of scholarships available each year. The caveat for scholarships is that students must apply for scholarships, which takes time and energy. Scholarship applications typically include personal information (name, address, phone number, email address), information about high school performance (academic, athletic, club participation, service, work), and in some cases, other criteria, like artwork, an essay, or references.
Kelsey from Staunton figured out the benefits of scholarship searching early. “I started looking into scholarships at the beginning of my senior year of high school. By that time, I had already started looking into colleges and was deciding between two in-state schools to save money,” says Kelsey. “Because I knew the cost of the schools I wanted to attend, I knew how much scholarship money I needed, and I started planning from there.”
Because there are so many scholarship options, being organized like Kelsey is important. For example, in the early high school years, students can research scholarships and note the requirements for each. Later, students might create a senior year calendar to keep track of scholarship application due dates. Some colleges have unique college application deadlines for students who want to be considered for merit aid and academic scholarships. Resources for scholarship searching can include high school counseling offices, college websites, businesses, community organizations, as well as internet searches on a student’s unique traits (i.e., intended major, ethnicity, etc.). It’s also a good idea to talk about scholarship opportunities with graduates and family friends who have gone on to higher education, especially if these students have a profile – grades, achievements, activities – similar to your student’s.
“In order to find scholarships, I made sure to look at the local ones first because they were the least competitive,” says Kelsey. “In order to stay organized and make sure I wouldn’t miss any due dates, I created a spreadsheet.” Here, she included the name of the scholarship, the amount, the due date, the requirements, and the reasons she thought the scholarship was a good fit for her. “My reasons for qualification were things like being a woman, being from a single-parent house, being a merit student, living in the Blue Ridge region, and my family’s financial situation,” Kelsey says.
Other scholarship options include ROTC scholarships and military academies (be sure to check each branch of the military for all the options). Keep in mind that the competition for local scholarships is often less than national-level scholarships, but it makes sense for students to apply for all scholarships for which they qualify.
Kelsey emphasizes that incoming freshmen need to be aware that the scholarship search is not over once you get to college. “Most scholarships are just for the first year,” she says. “For students who need scholarship aid all four years like me, it is important to find scholarships that are renewable, but even those require you to reapply. It is very important to keep your head in the game to keep getting aid.”
Work-study is a category of financial aid in which a student is authorized a dollar amount per semester that he or she can earn by acquiring a work-study job. These funds are typically for miscellaneous student expenses, as the student receives a paycheck for each work period. Colleges have their own procedures for assigning work-study jobs; it is often important to lock in a job early to ensure you are able to earn the authorized amount of funding specified in the student’s financial aid award letter.
The last type of financial aid is the student loan. Students who complete the FAFSA are automatically authorized for Federal Student Loans. There are loan limits each year, and these loans may be subsidized and/or unsubsidized, as determined by the financial aid office and a student’s FAFSA results. If additional funds are needed, parents can apply for ParentPLUS loans. Additionally, private lending institutions offer students loans. However, the interest rates for private loans are generally higher than interest rates for Federal Student Loans. Of course, loans must be repaid. Students do not have to accept the loans offered in any college’s financial aid package.
Other payment options can include real funds from checking and savings accounts, payment plans through the college, and college investment funds, like the plans available through Virginia529. In many cases, a student will have a variety of funding sources to cover college costs. Understanding the financial aid process, researching college options and corresponding costs, and planning for post-secondary education early can help students achieve their educational goals while incurring the least amount of debt.
Photo: Brian Jackson