Options for When You Can’t Afford Your Child’s College

October 21, 2019 · 1

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Options for When You Can’t Afford Your Child’s College

Every parent wants to help their child succeed. But when it comes to paying for college, it’s not always possible. If you’ve ever worried that you can’t afford college for your child, you’re not alone.

The average annual cost of tuition and fees at a public four-year college for in-state students is $9,410, according to College Board —that’s not including room and board, textbooks, supplies, and other living expenses.

If your child chooses a private school or wants to attend a public university in another state, the annual cost can more than double or even triple .

Fortunately, depending on the circumstances, you and your child may have several options to help them pay for school. We will look at things to consider when looking for ways to help pay for a college degree.

Scholarships and Grants

Depending on the school your child is planning to attend and their grades and activities in high school, they may be able to qualify for an academic or merit-based scholarship .

Grants, on the other hand, are generally based on your child’s financial need. Students typically aren’t required to repay scholarships or grants, so they’re a great option if you can’t pay for college on your own and want to avoid debt as much as possible.

It’s also possible to get scholarships through private organizations. Websites like Scholarships.com and FastWeb allow you to search through thousands of scholarships, making it easier to find one for which your child might qualify.

There are also scholarships available for current college students, so your child can continue to apply for those options even after he or she is enrolled.

Part-Time Job

Attending classes, doing homework, and establishing a social life are all important elements of a college experience. But working a few hours a week can help relieve some of the stress of dealing with the expenses that come with that experience.

For example, let’s say your child gets a job working eight hours a week and earns $10 per hour. Over the course of four years, assuming they don’t change their schedule, they could earn around $16,640. Even after taxes, that might help reduce the amount they would need to borrow or spend for college by thousands of dollars.

Federal Student Loans

The U.S. Department of Education provides student loans to college students without requiring a credit check (except for PLUS loans). And federal loans come with relatively low fixed interest rates, plus access to some special benefits.

For example, your child may be able to receive forgiveness on their loans if they choose a certain career path, or they can get access to income-driven repayment plans if their monthly payments are too high relative to their discretionary income.

To qualify for federal student loans, your child must complete the Free Application for Federal Student Aid (FAFSAⓇ) form every year. This form helps the school’s financial aid office determine how much aid your child may need and whether they qualify to have some or all of the interest on their federal loans subsidized by the federal government while they’re in school and potentially at other times.

If you want to avoid saddling your child with student loan debt, you can apply for a federal Parent PLUS loan to help pay for school. Just keep in mind that the interest rates are a bit higher on PLUS loans than on other federal student loans, and a credit check is required.

Private Student Loans

If your child is ineligible for federal student loans or they’ve borrowed all they can, and they still need money to cover their cost of attendance, private student loans can help bridge the gap. Before you apply, though, it’s important to consider the differences between private and federal student loans.

For starters, private student loans typically require a credit check and a look into credit history, which means you may need to cosign the loan with your child or apply on your own. The terms of the loan are typically based on creditworthiness and other relevant financial factors.

And generally, private student loans don’t come with income-driven repayment plans, and loan forgiveness typically isn’t an option.

That said, if you have strong credit and financial profiles, you may be able to qualify for a competitive interest rate.

You can also consider private lenders when refinancing both private and federal loans. However, refinancing federal loans with a private lender can cause you to lose those federal benefits mentioned above.

Other Ways to Help Your Child

Cosigning a private student loan with your child or taking out Parent PLUS loans are great ways to give your child some extra help. Another way is to find other expenses you can cover. You may consider footing the bill for their textbooks every semester, or maybe you have enough income to help with their monthly rent or college-provided room and board fees.

If your child’s school is local, you can also offer to have them stay home, so room and board are covered. There’s more than one way to help, but take the time to consider what you can afford without sacrificing your own important goals, including retirement.

Don’t Fret If You Don’t Have Enough Saved

If you’re wondering, “How can I afford to send my child to college?” try not to worry too much. While it’s nice to have enough college savings to make it work, both you and your child have options at your disposal to help pay for their education.

First, consider the ones that your child won’t have to pay back, including scholarships and grants. Then you can look for other ways to avoid borrowing, including encouraging your child to get a part-time job.

In the spirit of complete transparency, if you do need to resort to student loans, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider SoFi as your private loan lender.

If you do decide a private student loan is the right fit for your education, know that SoFi’s private student loan process is trusted, easy, and fast. We offer flexible payment options and terms, and there are no hidden fees.

Learn more about SoFi’s private student loans; get a rate quote to see what kind of terms you might qualify for.


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