How To Pay For College Besides Taking Out Student Loans
This week, on the Money Circle podcast, I interviewed Pam Andrews, college admissions consultant and the founder of The Scholarship Shark. I met Pam at FinCon last year and was thrilled to learn about the work that she does. Anyone who is out there helping people get into college and find ways to afford it is doing important work! In the United States, there are 45 million borrowers who collectively owe nearly $1.6 trillion in student loan debt. It’s a crisis and it is harming people and affecting what they can and cannot do with their lives. Of course, the ultimate solution is is to control the cost of higher education or make it free for all. But until we get there, we have to take advantage of other resources and strategies. Here are just a few:
Talk To The Guidance Counselor
If you’re like me, you might not have spent much time talking to your high school guidance counselor. But the truth is, you don’t have to only talk to them just to make your course schedule or deal with a problem at school. Guidance counselors are often the ones who have access to local scholarships and grants. If you’re still in school (or if your kids are), ask your guidance counselor where they keep records about local scholarships. Are they maintained online or on a bulletin board at school? Is there a binder that you can look at whenever you want? You should ask these questions during your freshman year of high school, if you can, so that you can turn to your counselor every year to find out what your options are for scholarships and grants.
Talk To Your Financial Aid Officer
If you already know what college you’re going to, find the financial aid office and develop a relationship with someone who works there. This person can tell you which grants and scholarships are available locally and within the university itself. You might be surprised to find out about opportunities that you wouldn’t have otherwise known about. You might also want to talk to your academic advisor or other professors. One of my professors had a scholarship in his own name and he told me to apply for it when I wanted to enroll in a summer learning program at Georgetown University. The amount didn’t completely cover the cost of the program, but it certainly helped me to afford it. I wouldn’t have known about it if that professor hadn’t told me.
Apply For Grants
Grants are free money that you get if you qualify or are chosen through an application process. Contrary to scholarships, you don’t have to do anything to keep the money, like maintain certain grades. Once you get the money, it’s yours as a gift. To find out about specific grant opportunities, talk to your guidance counselor or financial aid officer.
Apply For Scholarships
One important thing to know about scholarships is that you should start early and apply often. You can apply for college scholarships as early as 13 years old and have the money released to you once you graduate. Plus, you can apply for scholarships throughout your college career. Just because you’re already in school doesn’t mean you can’t still apply for more. Talk to your high school guidance counselor or college advisor to find out what scholarships come around each year. It’s possible to find out ahead of time and take your time to prepare to answer the questions
One thing to understand about scholarships is that they aren’t necessarily free money. You typically have to earn the scholarships by doing something, like maintaining certain grades. That’s just something to keep in mind!
National scholarship databases:
Note: once you make an account with these databases, you will get marketed to by colleges.
Hire A College Admissions Consultant
In the United States, we have this idea that we have to do everything on our own. Every man for himself. But it doesn’t have to be that way! There are people out there who can help you and guide you so that you or your child can get into the college you love AND get grants and scholarships that help you to afford it. That person might look like a college admissions consultant, like Pam Andrews of The Scholarship Shark. This consultant will work directly with the student and their family to help apply to colleges and for scholarships and grants. You can start working with them as early as sophomore year in high school and as late as fall of the senior year.
Take Advantage of 529 Accounts
A great way to pay for college is to save up for it ahead of time. One way that parents or other family members can do that is to take advantage of 529 accounts. A 529 plan, also known as a qualified tuition plan, is a tax-advantaged savings account designed to encourage saving for future education costs. Contributions, which can be made by anyone, to a 529 are tax deductible and will not be taxed when withdrawn to pay for education costs. All fifty states and the District of Columbia sponsor 529 accounts, so you will be able to open one in your state. However, you don’t have to open an account in your own state - you can open one in any state. Plus, if your child decides not to go to college, the account can be transferred to another person who might use it instead.
Pay As You Go
I had a couple of jobs while I was in college. I sat at the front desk overnight in my freshman dorm, I made sandwiches in the dining hall, and I worked at the movie theater over breaks. But it never even occurred to me to use the money I earned to help pay for my tuition. I always thought I could just rely on my student loans, and I did. The money I earned throughout the years just went right in my pocket or was used on other, more fun things. But the truth is, paying towards your tuition as you go can be helpful in lowering the amount you might owe later. Alternately, if you do take out loans, you can pay towards them while you’re still in school to keep the interest fees down.
To learn more, listen to this week’s Money Circle podcast with Pam Andrews!