9 Ways to Help Your Family Figure Out How to Pay for College

 

Figuring out how to pay for your child’s college education can feel overwhelming.  Between savings, financial aid, scholarships, loans, and more…it can feel confusing to understand how it all works.

So today, I’m here to share 9 different ways to help you afford to send your child to college…even if he or she doesn’t qualify for an academic or athletic scholarship 🙂

And make sure to read all the way down to the end…#9 is my personal favorite, and can be one of the most helpful ways to pay for college (if done correctly!).


#1: GRANTS – FEDERAL FINANCIAL AID

  • What it is: Federal financial aid is money provided by the government (from The U.S. Department of Education), given to students in need to cover the costs of college tuition, room and board, books and supplies and transportation.
  • How to get it: Families can apply for this financial aid by submitting a form called the FAFSA (i.e. the Free Application for Federal Student Aid). On this form, you are required to submit financial information (such as family income, assets, and investments), which then determines how much financial aid your child qualifies for each year that they are in college.
  • When to apply: The FAFSA is released each year on October 1st. You do not need to fill this form out until your child’s Senior year of high school. While you technically have over a year to submit the FAFSA once it is released, it’s best to submit this form for the first time as close as possible to October 1st during your child’s Senior year of high school.
  • Does it need to be repaid? NO! Financial aid in the form of grants given by The U.S. Department of Education do NOT need to be repaid.

#2: GRANTS – STATE FINANCIAL AID

  • What it is: Financial aid money (grants) provided by the local STATE government, for the state in which you reside (i.e. if you live in Arizona, your child would only qualify for state funding from Arizona). This money is given to students to cover the costs of college tuition, room and board, books and supplies and transportation. It’s important to note that state financial aid is usally only given to students if they attend a school in the state which they currently reside.
  • How to get it: Just like federal aid, families also apply for this money by submitting the FAFSA.
  • When to apply: The deadline to submit the FAFSA varies state by state so make sure to get familiar with the deadline for the state that you live in. You can find more information about the deadlines for each state here. But just like with federal aid, it’s best to submit the FAFSA as close as possible to October 1st when the form is released, as some states award financial aid on somewhat of a first-come-first-serve type of basis.
  • Does it need to be repaid? No, grants given by state governments do NOT need to be repaid.

#3: NEGOTIATE FINANCIAL AWARD PACKAGES

  • What it is: Once your child has been accepted to a school, that school will send an “award package.” An award package tells you know how much financial aid your child will receive if they attend that particular school. But just like you might try to negotiate a salary when accepting a new job, you can make an appeal to receive more financial aid as well.
  • How to get it: Go to the school website and read about the financial aid appeal process for the individual school in question. For need based aid, give a detailed explanation of how your financial situation has changed since submitting the FAFSA (such as unreimbursed medical expenses, loss or change in a job, catastrophic loss, or death of a spouse). For merit aid, it’s best to show that another similarly ranked school has offered your child a stronger financial aid package, and ask if the school in question can match this funding.
  • When to apply: Submit the appeal as soon as you receive the initial award package or when financial circumstances have changed.
  • Does it need to be repaid? No, grants and scholarships do not need to be repaid. 

#4: WORK-STUDY JOBS

  • What it is: Work-study jobs are jobs which your child applies for once they get to college. The government subsidizes the paychecks for college students who work at these specific part-time jobs, which are jobs usually offered on campus (for ex: working at the school library, the school recreation centers, research labs, etc). Students can use the money earned from these jobs to pay for college expenses.
  • How to get it: Students can become eligible for work-study jobs when they submit the FAFSA.
  • When to apply: Students who file the FAFSA early have a better chance to qualify for work-study jobs, as some schools may award aid on somewhat of a first-come-first-serve type of basis. So submit the FAFSA as close as possible to October 1st when the form becomes available. Once your child gets to college, they will apply for the specific work-study opportunities.
  • Does it need to be repaid? No, wages earned from work-study jobs do not need to be repaid.

#5: FEDERAL LOANS

  • What it is: Federal loans are loans (i.e. money) given by the federal government to families who ned to borrow money. These loans typically have a lower interest rate and more flexible pay-back schedules compared to loans given by banks or other private institutions. A huge advantage with these loans is that, oftentimes, the interest only begins accruing after your child graduates (rather than the moment they receive the loan).
  • How to get it: You guessed it…it all begins with submitting the FAFSA (are you starting to see how important this form is?). If your family does not receive enough financial aid from other sources to cover tuition, the government may offer to loan enough money to make up the difference. If you decide to use this loan, contact the college’s financial aid office to accept the terms of the loan.
  • When to apply: As mentioned previously, submit the FAFSA as close as possible to October 1st of your child’s Senior year of high school.
  • Does it need to be repaid? YES. These loans must be repaid!

#6: PRIVATE LOANS

  • What it is: These are loans given by private institutions (such as a bank). These loans have higher interest rates than federal loans, and interest beings to collect immediately upon receiving the loan (rather than after your child graduates).
  • How to get it: Apply for the loan at your bank of choice, or see if the college your child plans to attend works with specific lenders.
  • When to apply: After your child has received their financial award letters and decides to commit to a particular college or university, you’ll then begin applying for any private loans if necessary.
  • Does it need to be repaid? YES. These loans must be repaid!

#7: CLAIM TAX CREDITS

  • What it is: When you file your taxes, the American Opportunity Tax Credit allows families to reduce their annual tax bill by as much as $2,500 per student for the first four years of college. 40% of this money may be refunded to you, and the remaining 60% is applied as a credit if you owe federal income taxes. This only applies for families with income under a specific limit.
  • How to get it: Families receive this benefit when they file their taxes each year.
  • When to apply: In April each year, by the deadline to file taxes.
  • Does it need to be repaid? No, this money does NOT need to be repaid.

#8: START A 529 PLAN

  • What it is: A 529 Plan is a tax-advantaged savings plan offered by state governments, which encourages families to save for future college costs. In short, putting money into the 529 plan each year can reduce the amount of annual income tax you are required to pay.
  • How to get it: By putting aside savings each year into this account. I recommend speaking with a tax adviser to make sure you understand the full implications of these actions.
  • When to apply: It’s never too early to start adding funds to a 529 plan!
  • Does it need to be repaid? No, these savings do not need to be repaid.

#9: “OUTSIDE SCHOLARSHIPS”

  • What it is: These are scholarships given by private companies or organizations (such as a local company, religious organization, community organization, etc). Each scholarship varies in “prize money,” ranging anywhere from a few hundred dollars to a few thousand dollars. These scholarships are not solely based on academic or athletic abilities…so these scholarships are perfect if your child might not get a “full ride” to the school of their choice.
  • How to get it: Any high school student can seek these scholarships, but the trick is finding the right opportunities to apply for. Your child will need to search for these outside scholarship opportunities, and follow the instructions for each individual application when applying.
  • When to apply: I recommend starting as early as Freshman year of high school.
  • Does it need to be repaid? No! Money received from these scholarships does NOT need to be repaid.

**EXTRA TIP: Outside scholarships are my personal favorite way for your child to receive additional funds to cover the costs of college! But the trick is to find the right scholarships to apply for. Click here to get my FREE guide on outside scholarships: 5 WAYS TO FIND SCHOLARSHIP MONEY FOR YOUR CHILD   Click here to subscribe


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