How to Pay for College
Wednesday, December 2nd, 2009Although it may seem like after January 1st, all you have to do is sit back and wait for your acceptance letters, there’s a long way to go before you move into your college dorm.
Applying to college is only the first step. If you hope to enter the hallowed halls of your first-choice, you need to find a way to pay for college, and fast.
Calm down, applying for financial aid is all about the basics: loans and scholarships.
Loans:
Alright, here’s is the catch: you might get some cash for your college education, but it won’t be there for long, so you can’t treat it as a windfall and go on a major shopping spree. That’s the thing about loans-you have to actually pay them back.
So they are more like “temporarily free money.” But that’s still a huge help for the students relying on a loan as part of their financial aid package. In fact, college loans are the largest form of student aid, making up 54% of the total aid awarded each year.
There are basically two broad categories of loans: loans based on financial need and loans not based on financial need. Either way, you must fill out the FAFSA (Free Application for Federal Student Aid) as a first step. (By the way, these are long and complicated, and there are some cool companies like fafsa.com who can make this a breeze).
If your FAFSA application does demonstrate need, a need-based loan will be less expensive than a non-need loan (need-based loans usually have better payback terms). As mentioned above, to be eligible for any loan, you have to fill out the FAFSA first. Below are some of the different kinds of loans:
Need Based Loans
- Subsidized Direct Loans
- Subsidized Stafford FFEL Program Loan
- Perkins Loan
Non-Need Based Loans
- Subsidized Direct Loans
- Subsidized Stafford FFEL Program Loan
- Perkins Loan
- Private Loans
Scholarships:
The great thing about scholarships is they don’t need to be paid back. Scholarships are generally offered through colleges, businesses, private individuals and outside sponsors. There are no standardized scholarships, meaning they vary from college to college. Those awarded by the college itself are often called merit aid. For some scholarships you need to be nominated. For most of them, you apply directly to a sponsor (the person or institution who is issuing the scholarship). So, check with your college to see what types of scholarships are available. Or, go online to scholarships.com to search thousands of scholarships for the ones that perfectly match you.
Some students are very successful at getting many little scholarships or occasionally landing a substantial award. These scholarships are awarded on a broad-base of criteria, the most common being academic merit. However, others are based on conditions such as financial need, affiliation with a church or community group, demonstrated leadership, athletic talent, artistic or musical ability so don’t rule them out. Think of your skills and your community and get creative! Apply for as many as you can, as a bunch of little awards can add up to one big scholarship.
Beyond the Basics
Okay, so now you know the basics of applying for financial aid. But what’s next? How do you find these mythical “scholarships” and how do you know which loans to apply for? Well that’s where the “Pay For College” page comes in. CampusCompare has just launched a new page to deal with all your financial-aid worries. You can search and compare scholarships and loans to find the right combo for you! And as the dollars add up, you’ll be that much closer to the college of your dreams.
Still don’t understand the ins-and-outs of financial aid? Check out our Financial Aid FAQ’s, glossary, and more expert advice on the “Pay For College” page. It has everything you need to go from $0 to your full college tuition.
