That amount alone won’t pay for four years of college. According to the College Board , the average tuition, fees, room and board in 2018-2019 for a four-year private college is $48,510, $37.430 for a public four-year college (out-of-state) and $21,370 for a public four-year college (in-state).
Don’t despair. Here are six ways to pay for college that may help you avoid breaking the bank. (Note: This is a VERY high-level overview of some common ways to pay for college. We always recommend you speak with a guidance counselor and to do your own research when seeking out ways to finance your education that work best for you.)
Applying for Scholarships
Many colleges and private organizations offer merit-based scholarships. This means money is awarded based on academic or athletic ability, not financial need. The College Board maintains a database of scholarships from more than 2,200 programs, totaling nearly $6 billion of potential scholarship funding.
However, many of these opportunities have very specific requirements. For instance, you might need to live in a certain state or major in a particular subject to qualify for the scholarship, so it’s important to read the requirements carefully. If you’re unsure whether you qualify, contact the scholarship sponsor.
Start researching scholarships early, because gathering the required documents and information to apply could take time. Many scholarships require you to submit a high school transcript, your standardized test scores, a financial aid form, and information about your family’s finances, including your parent’s tax returns from the previous year.
Many scholarships also require you to write an essay or two and provide at least one letter of recommendation. Be sure to follow all the directions carefully and to keep copies of your application.
Applying for a Grant
Unlike scholarships, most grants are based on financial need, not academic achievement. The largest source of need-based grants is the federal government’s Pell Grant program .
To qualify, you must be a U.S. citizen attending either a two- or four-year undergraduate program. If you have already earned a baccalaureate or professional degree, you won’t be eligible for a federal grant, so this link has four simple steps if you’re looking for ways to pay for graduate school.
Grant amounts are based on financial need, the cost to attend your college, and your enrollment status. The amount awarded will vary based on those factors, but the current maximum award is $6,195 for the 2019-2020 school year. To apply, you will need to complete the Free Application for Federal Student Aid (FAFSA®) .
Many states also distribute grants. The National Association of Student Financial Aid Administrators maintains a database of state financial aid programs to help you pay for college.
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Asking the College for More Money
While it may seem like a bold move, more students are asking colleges to provide a larger financial aid package. Appealing a financial aid decision is a possibility but there are no guarantees. Financial aid awards are usually based on information provided on the FAFSA, and in some cases changes in financial circumstances can lead to an amended financial aid award. Some colleges and universities might also be willing to match a more competitive financial aid offer from a comparable school.
The appeals process might vary based on the school’s policies, so check in with the financial aid office or review the school’s website to determine the appeals process.
Many schools will require a letter of explanation. Depending on the circumstances documentation might be necessary to supplement the information detailed in the appeals letter.
Getting a Part-Time Job
Another way to pay for college is to apply for an on-campus work-study job or look for a part-time, off-campus job. Websites popular with college students looking for work during the academic year include QuadJobs , WayUp , Snag , and Upwork .
Applying for a Tax Credit
Your parents may qualify for the American Opportunity Tax Credit (AOTC) of up to $2,500 for each eligible child attending college. To be eligible, you must:
• be enrolled in a degree program at least half time
• have not finished the first four years of higher education at the beginning of the tax year
• have not claimed the AOTC for more than four tax years
• have not had a felony drug conviction at the end of the tax year
Check out the IRS website for all the latest requirements, as they may change from year-to-year.
Looking at Student Loans
If you aren’t awarded a scholarship or grant, there are a variety of student loans you can apply for to help pay for college, including federal and private loans.
The Federal Direct Loan program offers both subsidized and unsubsidized loans. Subsidized loans are awarded based on financial need. The interest accrued on a subsidized loan is covered by the Department of Education while the borrower is enrolled in school, during the grace period, and during periods of deferment. Unsubsidized loans don’t have a financial need requirement, and borrowers are responsible for paying the interest on an unsubsidized loan once it’s disbursed.
If you’ve already exhausted your federal aid options, you may also want to consider a private student loan, which is not subsidized or need-based and may require a cosigner. Banks and financial institutions, private organizations, and even some colleges offer student loans with varying interest rates and loan terms.
SoFi for instance is helping students pay for school with no-fee private student loans. The application process can be completed easily online and you can find out if you pre-qualify (and at what rates) in just a few minutes. There are flexible repayment plans so borrowers to select the option that best suits their budget.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.