Student Loans and Other Options for College
Borrowing money for College
When considering going to college or not, the idea of borrowing money should be a last resort. People may not realize all the options available to them, and ought to try to find out all they can before taking out a loan to pay for college. For instance in the United States, its going to cost a student less to go to a a university in the state they have residence in. A lot of states have both need based and merit based scholarship programs for qualifying students. Do not assume these will not apply to you. They may be perfect for your situation. The sooner you find out what the possible requirements are, the higher the likelihood is that you will qualify. That said, even if you think its too late, don't assume that either. The goal is to avoid gathering a lot of debt to have to pay off later.
Some schools ask that you maintain a certain grade level in high school or have certain scores on you ACT or SAT exams. Some require that a certain number of community hours, where you have given of your time and services. Checking with the students high school counselor can be a great resource and first step. Check also with the local school districts. Asking questions never hurt anyone and has helped many to become educated in what is available for students out there. Ask what you need to do to qualify. Sometimes, a private college will give out grants or scholarships that help to pay for tuition, books and even room and board.
Princeton University initiated a no loan movement back in 1998. The goal was to eliminate loans altogether from the financial aid packages, and especially for low income students. I think this is just wonderful for students and gives everyone more of a chance at furthering their education. Imagine how far that idea has come now, as other schools follow suit. Now we have at least two fifths of all colleges with endowments that exceed one billion dollars that have also adopted no loan policies. The key is to finding out which ones those are. Getting on the phone and asking questions can do wonders to find out things, as does taking time to fill out paperwork. You have to put a little work in for this, but it will be so worth it.
What most schools offer to students
Its good to know what most schools offer so you can try to get in on the programs available. For instance, many schools offer a combination of things, like work study, federally insured loans, and both need based and merit based scholarships.
Work study is a federally subsidized program. Students are paid for working at least 12 hours per week in a job at their college or university. This is great because transportation is usually taken care of as you can walk to work if you live on or near the campus.
The scholarships given out based on need will require some documentation of the student's financial situation. This is often done through the Free Application for Federal Student Aid, or FAFSA. It will show the tax forms from previous years for both a student and his or her parents.
Scholarships given for merit based reasons are based not just on test scores and grades, but sometimes on a student's field of study or for any community service they have participated in. Each school has limited funds to give out to students for grants and scholarships. They are trying to judge the best way to give out the funds.
If you get accepted by a college or university, they often will send an award letter as well stating what financial package may be offered to you by the school. If making a decision, go with the school that offers the most for grants and scholarships. Those do not need to be paid back, will help you stay out of debt, or at least get out of debt more quickly. Keep in mind that you need to plan on finishing what you started, or that offer is off the table very often. Then you will owe money on a grant or scholarship. They want to give them to people that will appreciate them and use them to get the best education possible. A couple of good loans out there are Subsidized Stafford Loans, and Perkins. These tend to have the lower interest rates which you will want, and the best options in regards to payments and forgiveness.
Ask about a schools other options, like being a Resident Assistant or Advisor to on campus housing. This helps to supervise the younger students and it often can help to subsidize your school costs. It is right there on campus as well, so it is a win win situation that gives you a lot of valuable experience as well. Ask about possible stipends available if you were to serve in the Student Government or in some other capacity on the campus. Look into college savings plans and employers that may offer grants or scholarships to you or to your college age children. Ask your parents if they can find out about whether or not their employer offers education benefits.
Sometimes parents choose this time in life to cash in on bonds, sell stocks or selling some other asset to help with costs. These ideas are all preferable to taking out huge loans that will keep you in debt for a long time to come.