The Complete Reference Guide on How to Pay for College FAFSA, Financial Aid, Scholarships, Student Loans and More

How to pay for college Do you know how to pay for college? Are you fully prepared to cover the substantial expense of college?Do you want a better understanding of FAFSA, financial aid, scholarships, student loansand all those key terms for paying for college?And for those with students already in college, are you paying for college in the most effective way (i.e. zero interest!)?There are many things to consider when deciding how to pay for college but the most important thing is that you know all your options and exhaust every single one BEFORE taking out student loans (yes, there are other ways to pay than student loans, I promise!).In this complete reference guide on how to pay for college, I will cover all your options so that you know you are helping your child make the right decision (or as a student, helping yourself).WARNING: This is a comprehensive guide that will give you exactly what you need to know. Be prepared to bookmark and share this so you can come back to it in the future!Contents0.0.1 What will you learn from this post?0.0.2 How much does college truly cost?0.0.2.0.1 Share this Image on How to Pay for College On Your Site1 How to pay for college1.0.1 Step 1: Influence your bill amount.1.0.2 Step 2: Understand that there are alternatives to student loan debt.1.0.3 Step 3: Find that free money!1.0.4 Step 4 (If you must): Borrow student loans as a last-case scenario1.0.5 Summary1.0.5.1 Share our College Cost Infographic On Your Site1.0.5.2 If you want to join us for the live webinar we mentioned earlier on scholarships and college funding, grab your spot at thescholarshipsystem.com/freewebinar.1.1 Want help finding scholarships?Sign up for our Free webinar here.What will you learn from this post?The true cost of college (and how to reduce it)Free money available through FAFSA or other sources how to get itNot-so-free money available through FAFSA or other sources (and how to limit the amount of interest you have to pay)How much does college truly cost?For most pare nts, sending a child off to college is an enormous investment, second only to your mortgage. For students, this is most likely the largest expense you have yet to take on.So how can you pay for it without tapping into a retirement account or signing up for a life of student loan payments?First, lets just address the elephant in the room. College is freaking expensive. And it isnt going to get any cheaper. Banks are basically giving out mortgages to 18 year olds so why would any university lower their prices?Yes, this reality stinks.Fortunately, while it may not be at the same rate as college costs, the amount of scholarships and other forms of financial aid are increasing as well. But I am getting ahead of myself.Lets take a look at just how expensive college is. Here is an infographic we created at The Scholarship System on it.Share this Image on How to Pay for College On Your Site/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pstrongThank you to thescholarshipsystem.com for sharing this graphic./strong/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pa href=https://thescholarshipsystem.com/blog-for-students-families/2016/1/14/the-complete-reference-guide-to-paying-for-college-fafsa-financial-aid-scholarships-student-loans-and-moreimg src=https://thescholarshipsystem.com/wp-content/uploads/2016/01/Cost-of-College-Paying-for-it-Infographhic-1.png alt=The Average Cost of College How to Pay for It width=540px border=0 //a/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pThe dollar values are based on the average cost of ONE YEAR at a public 4-year university (which means 4 years = $94,996). If your child goes private or needs to stay around for an extra semester or year, you will most likely be in the 6-figures.And because of these enormous costs, students are graduating with more debt than ever, as you can see by this WSJ chart below:My goal is to help you keep your child out of the chart I just showed.How to pay for collegeIn the rest of this post, I am going to cover exactly where you can find money to pay for college.Step 1: Influence your bill amount.The first step to paying for college is actually cutting the amount you have to pay in the first place. I always tell my students to come up with a plan, some sort of budget, and stick to it. Then they can find different ways to reduce spending.We decided to make it easy on you and share some of our tips on how to reduce these costs. They are conveniently placed in the infographic above for you (I know, pretty easy, right?). Feel free to pin it by clicking here so you dont forget these tips.We actually created a Paying for College series to help you reduce the college bill.Related posts on how to reduce your childs college bill:PAYING FOR COLLEGE PART 1: REDUCING YOUR TUITION BILLPAYING FOR COLLEGE PART 2: REDUCING YOUR TUITION BILL (CONTINUED)Step 2: Understand that there are alternatives to student loan debt.The next step to paying for college is understanding that there ARE alternatives to student loans. Before I get into them, here are some quick stats on it.Free money is actually not that rare. The majority of full-time students receive some sort of financial aid (whether scholarships, grants, cash awards, etc.). In the image below that College Board published here, it shows that 57% of students receive scholarships and grants.DID YOU KNOW? Students received a total of $122.7 billion in scholarships and grants in 2013-14. About 40% of this free money comes from the fede ral government and, to qualify, you need to fill out the FAFSA. Heres a breakdown of where grant money comes from:40% Federal39% College13% Private8% State College BoardSource: https://bigfuture.collegeboard.org/pay-for-college/grants-and-scholarships/the-basics-on-grants-and-scholarshipsIn fact, heres a great stat shared by College Raptor, showing that millions of students receive some sort of financial aid.So no matter what doom and gloom story you are told, there is money out there.Step 3: Find that free money!Now lets take a look at these crazy terms: Grants, FAFSA, Financial Aid, Scholarships, Cash Awards, Student loans and other forms of funding so that you can help your student work their way to a debt-free degree.1. GrantsGrants provide free money that never has to be paid back. Most grants can be accessed by submitting FAFSA and are first-come, first-serve so make sure you submit your FAFSA as soon as possible (Ill tell you how to do that in just a moment).The U.S. Departme nt of Education offers a variety of federal grants to students attending four-year colleges or universities, community colleges, and career schools.Here are the official pages of each one:Federal Pell GrantsFederal Supplemental Educational Opportunity Grants (FSEOG)Teacher Education Assistance for College and Higher Education (TEACH) GrantsIraq and Afghanistan Service GrantsSpeaking of FAFSA, here are the details you need to know.Now I mentioned FAFSA quite a few times so lets talk about why its so important and what you need to know in order to complete it.FAFSA stand for Free Application for Federal Student Aid and can be submitted at https://fafsa.ed.gov/.The reason this is so important is because it gives students access to grants as well as lower-interest student loans. All families should submit FAFSA no matter what. It will never harm you if you do submit one but not submitting it could mean your family misses out on thousands of dollars!The deadline to submit your FAFSA is J une 30, 2016 although you want to submit it as soon as possible (as in the next couple months at most). Like I said, the funding is first-come, first-serve so the sooner the better.So how do we submit the FAFSA?Below is a great list shared by Bankrate on what you need in order to complete the FAFSA.Once you go through the process the first time (about 30 minutes if you have all your materials ready), it will be faster and faster each year.Did I just say each year?Yep.FAFSA has to be resubmitted every single year.Starting October 2016, you can submit it as early as October the year before and you get to use the previous years tax return so this should get even easier on families. You can read more about the changes for 2017-2018 and beyond here.As I mentioned before, FAFSA doesnt only help secure students grants. There are other forms of funding that can come from it which I will share with you in just a moment.2. Scholarships Cash AwardsMany people think these things are mystical c reatures that dont really exist.I have great news: scholarships are very real, and they are here to help you!Scholarships and Cash Awards are also forms of free money that do not have to be paid back. The difference is that these come from all over the place your university, associations, organizations, your state government, your childs favorite restaurant, you name it.While only 13% of financial aid given comes from private scholarships, that still equates to over $9.8 BILLION. Thats a lot of money, and it is increasing every year.The best part is that nearly any student can find scholarships they are eligible for, including yours, even if you arent low income, your student doesnt have a perfect GPA, and they are the furthest thing from a superstar athlete (ask my mom how athletic I was and youll understand).And I can speak from experience, especially on this one. I was able to secure a completely free ride through scholarships and funding, completely paying for my college educat ion including studying abroad for 6 months. I say that not to brag but to show you that ITS POSSIBLE!If youre unsure of how to start the scholarship process, check out our free webinar at thescholarshipsystem.com/freewebinarpstYou may have also noticed I said Cash Awards.These are the same exact process as scholarships except that the money goes directly to your student immediately upon winning rather than to the Bursars Office for the following semester. These are more common for upperclassmen in college because they are more based on achievements in college. I also cover these in the webinar if you want to join us.Related posts on how to secure scholarships for college4 SCHOLARSHIP MYTHS THAT LEAD TO STUDENT LOANS (AND HOW TO OVERCOME THEM)WHEN YOUR CHILD SHOULD START APPLYING FOR SCHOLARSHIPSMAKE SCHOLARSHIP ESSAYS STAND OUT BY AVOIDING THESE 4 CLICHS3. WorkingWhile this isnt free money, hard-earned money is better than money that charges you interest.Having your student work par t-time has tons of benefits including better time management, greater appreciation for money, increased awareness of finances and a stronger resume for post-graduation jobs, but of course one of the biggest benefits is that a part-time job can largely decrease the amount your student needs to borrow.Want some ideas? Keep reading. You can also check out this quick post:Related post on making money in college:PAYING FOR COLLEGE PART 5: MAKING MONEY WITH FLEXIBLE JOBSThe National Center for Education Statistics (NCES), which is run by the U.S. Department of Education, found that students working 1-15 hours weekly have a significantly higher GPA than both students working 16 or more hours and students who dont work at all. Source: BYU StudyHere are some common and some not-so-common, creative ways your student can bring in money:Work study An option to work for reduced tuition or hourly pay. Offered via FAFSA, this is actually relatively rare to receive and you should always make sure the hourly payout is equal to or higher than any other job option.Hourly job Does your student want flexible hours? Have them try serving. Want time to do homework? Try a front desk position.TutoringSelling notes*Please confirm it is not against your University policy before doing so. This varies school to school.Babysitting or Dog/Pet-sittingSelling old stuff (and this means cleaning their closet back home!)Uber/Lyft driver (if they have their car on campus though I dont recommend that to freshman)Editor for friendsFreelance work onlineWrite articles for online publicationStep 4 (If you must): Borrow student loans as a last-case scenarioOne last tip on how to pay for college is regarding student loans. As a parent, it can be very difficult to pay for all of college. This may mean your student has to take out some student loans.If they do, the best thing you can do is to make sure they are taking out the right loans, that is, the loans that will cost them the least.There are two ma in categories of student loans:Subsidized loans This is where the government pays the interest while your student is in college which means your child can save tens of thousands of dollars over their 4 years in school. Subsidized loans are offered through the FAFSA (I told you the FAFSA is important!)Unsubsidized loans Interest starts accruing as soon as the money is borrowed. This means that your child will start building up interest in their freshman year. It is then rolled into the final loan amount once they graduate and they are then charged interest ON THEIR INTEREST. Crazy. These can be found via FAFSA as well as typical lending institutions. Nearly always, federal loans (FAFSA) will have lower interest rates than private loans.As mentioned, FAFSA offers many different avenues for funding, one of which is loans. Below is a table from http://www.fafsa.ed.gov describing borrowing limits of the loans they offer.Student Loan Limits via FAFSAOverall, the best thing to do with lo ans is calculate what the total life of the loan will cost your student and to only borrow what is truly needed.Its easy to take out $5,000 here, $10,000 there but have your student calculate the amount they will actually have to pay back (including interest) before they sign anything. It can be eye-opening.SummaryUnderstanding all your options for paying for college can change your childs future. By knowing all your options, you can limit (or completely eliminate) the amount of student loans your child will have to borrow, saving you (and them) tens of thousands of dollars.Which college funding methods do you use, or plan to use, after reading this post?What have I missed in this post?Id love to hear from you.If you want to embed our infographic on your website then use the code below.Share our College Cost Infographic On Your Site/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pstrongInfographic created by thescholarshipsystem.com./strong/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pa href=https://thescholarshipsystem.com/blog-for-students-families/2016/1/14/the-complete-reference-guide-to-paying-for-college-fafsa-financial-aid-scholarships-student-loans-and-moreimg src=https://thescholarshipsystem.com/wp-content/uploads/2016/01/Cost-of-College-Paying-for-it-Infographhic-1.png alt=The Average Cost of College How to Pay for It width=540px border=0 //a/pbr /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br /br / pIf you want to join us for the live webinar we mentioned earlier on scholarships and college funding, grab your spot at thescholarshipsystem.com/freewebinar.Sources:Image of percentage that receive financial aid breakdown of financial aid sources by percentage: https://bigfuture.collegeboard.org/pay-for-college/grants-and-scholarships/the-basics-on-grants-and-scholarshipsChart showing debt per student:http://blogs.wsj.com/economics/2015/05/08/congratulations-class-of-2015-youre-the-most-indebted-ever-for-now/Graphic on number of students with financial aid: https://thescholarshipsystem.com/wp-content/uploads/2016/01/scholarship-graphic.jpgFAFSA Grants: https://studentaid.ed.gov/sa/types/grants-scholarshipsFAFSA list of documents: http://www.bankrate.com/finance/college-finance/make-most-of-fafsa-application.aspxBYU Study on working in college: https://thescholarshipsystem.com/wp-content/uploads/2016/01/effects_of_student_employment.pdfWant help finding scholarships?Sign up for our Free webinar here.