How do I pay for college???
College is expensive! Let’s talk about different ways to reduce that cost.
Every high school senior (and, ahem, me as a doctoral student) dreams of winning a full ride scholarship. A commonly referenced scholarship is the Coca Cola scholars where winners receive $20,000. In North Carolina, NC State provides a full-ride through the Park Scholars and UNC Chapel Hill provides a full-ride through the Morehead Cain Scholarship (and there are many more at other colleges and universities). Full-rides are a fantastic resource and I encourage every student to apply for them! But the reality is that those scholarship opportunities are highly competitive, and only a small percentage of the students that apply actually receive those scholarships.
So, short of taking out a bunch of loans, how can I afford to pay for college!?
Outside of scholarships, the second most discussed way to pay for college focuses on taking out federal student loans. I’ll be honest - a lot of students do have to take out loans to pay for their college education. But loans don’t have to be the only way you pay for college! Most students pay for college through a combination of four types of funding: financial aid, scholarships, loans, and private pay. Let’s discuss them in more detail below.
Financial aid is the umbrella term for any funding that is provided to you through the federal or state government. This often looks like federal and state grants and work study jobs. Grants are very similar to scholarships - they are funding provided to you that you aren’t required to pay back. The main difference is that grants are usually tied to financial need. You have to demonstrate financial need to qualify for grants.
Work study is also dependent on financial need, but that funding is provided in exchange for you working an on-campus job. Work study may not be as appealing as grants or scholarships, but one significant perk is that you gain job experience while going to school. Instead of having to find a job when you come to campus, you have an automatic opportunity to build career skills while being paid to go to school!
Scholarships are what students are most familiar with. This funding is provided by your college or university, non-profits, religious and community organizations, and other private groups. You usually have to apply for this funding and submit essays, resumes, recommendation letters This funding type usually has no requirements to accept it, other than apply. (Related: check out my previous post about looking out for scam scholarships)
Loans are the funds you will take out to pay for college that you’ll eventually have to pay pack. Most students receive loan funding from the federal government, but you can also take out loans through private organizations (tip: make sure you pay attention to the loan agreement so you know your interest rates!). There’s been a lot of discussion regarding student loans recently, and there are pros and cons to using loans as an option. They are the more accessible funding option for most students, but they can be costly and you can end up owing much more than your original loan if you don’t pay them off in a timely manner. Most loans do not require payment while you are enrolled in school. There are two types of federal loans: subsidized and unsubsidized loans.
Subsidized loans are for undergraduate students who demonstrate financial need. They do not generate interest while you are enrolled in school at least half-time (6 or more credit hours), so your total amount owed will not increase due to interest. However, they will start generating interest once you graduate and your grace period has expired.
Unsubsidized loans are for graduate students and undergraduate students that don’t demonstrate financial need. These loan types do generate interest while you are in school. Like subsidized loans, you have to begin payment once you’re no longer enrolled in school.
Private pay is the last type of funding. This is the money you, your family, or your community are paying out-of-pocket for school. Most students have to do some form of private pay while they are in school. This can be for things like tuition, meal plans, or on-campus housing. But it can more commonly be for things like books, off-campus apartments, transportation, or other school supplies.
There are benefits and drawbacks to each type of funding source. Some are too expensive, not manageable, or too competitive to receive help through. But most students use a combination of all four funding types to pay for their schooling. Paying for college is about math - you need to see how much you owe, subtract how much you have to pay, and then determine where you’re going to find funding to pay for the difference. It can be overwhelming, but tens of thousands of students do this every year, and you can too! I tell students to take it step by step, application by application, and build your funding pile through perseverance and creativity.
Check back for the next post where we discuss how to find these funding sources!
Need help with the college process? Simpson Education Consulting can help you navigate the college process, find your dream school, and make college affordable! Reach out to our team if you need help!
Have a question you’d like answered on the blog? Send me an email at coleman@simpsoneducationconsulting.com and I’ll get back to you!
