How To Pay For College

Aside from purchasing a house, a college education is one of the largest investments you’ll ever make. Your resulting career is certainly worth the time, effort and monetary investment of college. Paying for your degree requires some creative strategies. With one year of college costing more than $20,000, you need to have a clear plan to pay expenses.

First Course Of Action

Apply for the federal government’s financial aid packages. Although you may think you do not qualify, even a small monetary sum helps you pay for college. Fill out a FAFSA, or Free Application for Federal Student Aid, online. This application matches you with as much aid as possible, from free grants to loans.

Look Into Grants

A number of grants are given out through federal and local programs. Some money funds, like Pell Grants, are based on income whereas other grants take your expertise or vision into consideration. National SMART and Academic Competitiveness Grants are some of the other common funds given out based on career choices in math and sciences. The best part about grants is free money. You do not need to pay these funds back at any time.

Scholarship Time

If you are a musical savant or a sports natural, many colleges want your talent at their institution. For example, a college with a famous symphony orchestra wants to attract the best musicians. They will give out scholarships for free tuition to entice top musicians into the college. Similar to a grant, scholarships are not paid back. Find your true calling in life and excel at it for a chance at a scholarship. Even local businesses and organizations, such as churches, give out small scholarships to help you pay for college. Be active in your community and find out what the area offers for prospective college students.

Try A Community College

Two-year colleges allow you to take the same general education classes that a local college offers for a substantially low price. Stay at home for your first two years of college and complete your lower division classes at a discounted rate. You quickly transfer to a four-year college to complete your degree. Along with tuition savings, you also save on dorm and cafeteria fees that can be expensive.

Save Up

Ask your family to contribute to a Roth IRA or 529 plan. These specialized savings accounts are meant for college savings and allow you to withdraw funds for college related expenses at low tax rates. Alternatively, work a part time job to increase your income. Even if you are a waiter or waitress at a local restaurant, any extra income helps you pay for books and lab fees. Don’t let your part time job hinder your studies, however, because good grades will help you break into your dream career when you graduate.


The federal government offers Direct Stafford loans to both undergraduate and graduates. With low interest rates, these funds must be paid back after graduation, however. Look for subsidized Stafford loans. These loans do not have interest accrual during your school period, making the payoff amount significantly lower when you graduate college. Unsubsidized loans accrue interest while you are in school because they are not based on financial need. You can pay the interest while you’re in school to reduce the balance, however.

Service Programs

Enter the Peace Corp, AmeriCorps or ROTC before you go to college. These service programs give you real-life experiences while helping others through government funding. After completing your service, you are given a college scholarship fund to improve your career prospects.

Paying for college requires a mixture of different incomes, from grants to loans. Apply for as many programs as possible to find your key to a better life.

Financial Aid for Students

Paying for higher education is expensive, and the Federal Government has put in place several different types of aid programs under the umbrella of Federal Student Aid to help students with these costs. While all students may apply for aid, greater amounts of aid are typically given to undergraduate students as opposed to graduate students. Students must also be enrolled in a program at an institution that qualifies to receive federal aid. All student aid programs are need based, meaning that they take into account the student’s income compared to expenses when deciding how much money is awarded.


The Free Application for Federal Student Aid (FAFSA) is the cornerstone of all student aid from the government. A student must fill out a FAFSA annually and apply for student aid each year. The amount of student aid awarded usually varies year to year based on the government’s education budget and any changes in the student’s need.

A FAFSA will typically contain mostly income information. This will include the student’s income and the income of anyone who claims the student as a dependent on their income tax forms. The FAFSA may also contain expenses information to determine the student’s overall school costs as well as a code for each institution the student is planning to attend. These codes can usually be looked up through the FAFSA website or be provided by the school itself. Students will be issues a PIN number that they will use to electronically file their FAFSA each year. It typically takes about four weeks for a FAFSA to be processed and for any aid to be awarded.


Grants are essentially monetary gifts that the government provides to students who have especially high needs. Qualifying for a grant is income based or based on several distinct factors. Unlike loans, grants do not need to be repaid.

The Pell Grant

The Pell Grant is the most common type of grant. It is usually awarded to low and middle income undergraduate students. The amount awarded depends on need and varies each year. It is usually between $500 and $6,000.

TEACH Grants

This is a special type of grant only for those seeking an education diploma. To qualify for this grant, students must agree to teach for at least four academic years in a high-need school district. The grant money is awarded during the college years and does not need to be repaid so long as the student graduates and follows up with their teaching agreement after graduation. If they fail to follow the agreement, then the grant must be repaid.

Student Loans

The vast majority of student aid comes in the form of loans. Just like any loan, student aid loans must be repaid. The good news is that student loans come with very low, locked interest rates. They are considered one of the healthiest forms of debt available.

Federal Stafford Loans

This is the most common type of loan that students may borrow. These loans can be used to cover the total cost of attendance at a school. This includes tuition, room and board, and other education related expenses. Loan amounts are disbursed directly to the school each year.

The key aspect of a Stafford Loan is whether it is subsidized or unsubsidized. Most students have a combination of subsidized and unsubsidized loan amounts.


A subsidized loan is need based. The amount of the loan is determined by a student’s financial need according to the FAFSA. A subsidized loan does not begin to accrue interest until after the student graduates and begins making repayments.


Any student may apply for an unsubsidized loan. They are not need based. These loans, however, do begin to accrue interest as soon as the loan is disbursed. It is thus worthwhile to begin making repayments on the loan quickly to control the interest additions.

PLUS Loans

These are loans taken out by parents of dependent students on the student’s behalf. It is important to note that a PLUS loan is the parent’s loan, and they, not the student, are required to repay the loan, regardless of the student’s status.

Stafford Loan Grace Period Changes

Stafford loans are a type of low interest federal student loan for students enrolled at least half time in college. These loans are known to be quite affordable and students can borrow up to $20,500 per school year. Certain types of enrollment may accrue interest on the loan, such as no longer being eligible for direct subsidized loans such as the Stafford. Stafford loans are not based on credit, and both subsidized and unsubsidized loans are available.

The Stafford student loan has a grace period of six months. If the six month grace period passes after the student has left school, they will not be eligible for a new grace period in the future. If, however, during the six month grace period the student goes back to school, they will receive another six month grace period. They must enroll at least half time, though, and fill out the proper paperwork and forms. Once the grace period is expired, they will not be issued another one.

Stafford student loans are billed monthly. After the six month grace period has ended, the first payment will be due starting the next month. There are a few different options for paying a Stafford loan back. With a standard repayment plan, the term is ten years or less and a minimum of $50 per month. Less interest is accrued but there is a higher monthly payment than other plans. With graduated repayment, the term is also ten years, and the payment is low for the first two years but is increased in the years thereafter. This type of repayment plan accrues more interest. Neither the standard nor the graduated repayment plan is compatible with loan forgiveness (cancellation on all or part of the loan due to circumstances).

The responsibility of a Stafford Loan borrower is that they must notify the loan servicer and school financial aid office if they have a change of address, fall under half time status enrollment, enroll at a different school than the one that certified the loan, transfer, or graduate.

An extended repayment option has a 25 year or less term. There is some type of fixed or graduated monthly payment, and though it is lower than a standard and graduated repayment, this plan accrues more interest. It is also eligible for forgiveness programs. There is also a variety of other repayment plans available.

If a student has trouble repaying the loan, deferment (temporary postponement without interest) of payments may be available based on eligibility. Economic hardship, disability, and unemployment are all considered options for loan deferment. If loan deferment is not available, forbearance (temporary postponement with interest) may be an option.

The loan becomes delinquent the first day after a payment is missed. Consequences of loan default may be wage garnishment, having state or federal taxes withheld, late fees may accrue and additional interest may be added on. Collection action may also seriously harm creditworthiness.

Think College Is Unaffordable?

The thought of going back to college can bring about a lot of different emotions. You may be excited to start this next part of your life journey. At the same time, feelings of nervousness about leaving home are also pretty common. One of the biggest fears that people have about going to college is that they will not be able to afford it. As you know, college courses can be expensive. The good news is that there are many programs available to help you make the financial transition to college a breeze. The Stafford Loan program can help you take the worry out of the financial aspect of going to college.

So what exactly are Stafford Loans? Stafford Loans is a government-based student loan program. It is one of the most commonly used programs of its kind. The loan comes in two different forms – subsidized and unsubsidized. Choosing the right one depends on your needs while you are in school.

If you get a subsidized loan, you can borrow up to $8,500 per year, and the government pays the interest that occurs while you are in school. With the unsubsidized loan, you would be responsible for the interest while you were in school. However, you could get more up to $12,000 per year. I would talk with a trusted advisor to see which type of loan is the right fit for you.

Most students wanting to enter a higher education school are able to receive a loan through the Stafford Loan program. Below are the qualifications that must be met.

* You must complete and turn in the Free Application for Federal Student Aid (FAFSA).
* You must be a permanent resident of the U.S., a U.S. citizen or an eligible non-citizen.
* You must plan to be enrolled at least part-time in a higher education setting.
* You must be accepted to a Title-IV eligible school.
* You may not be in default on a previous education loan.

The big question is how you go about getting accepted for a Stafford Loan. The first step is to fill out a Free Application for Federal Student Aid (FAFSA). The school will then determine if you meet the qualifications to apply to a Stafford Loan. You will know that your application has gone through by receipt of a letter in the mail. The applications for the FAFSA and Stafford Loans are typically accepted January through June. Check with your local college to confirm the dates as they can differ from state to state.

Once your FAFSA has been approved, you can then apply for the Stafford Loan through their website. It is imperative that you remember to renew each year you wish to continue your education.

Education is a big part of your journey through life. As scary as the financial piece can seem, Stafford Loans help make going from home to college a smooth transition. I hope this article helped you to discover ways to make getting a college education more affordable.

New Rules for Student Loans

stafford loan applicationThe Department of Education recently overhauled its loan program with help from Congress. In 2012, the rates on subsidized Stafford loans were scheduled to nearly double in some cases. However, President Obama successfully brought the loan situation to a platform of national debate and this year will see loan interest rates become based on the market. The bill in question links interest rates on both PLUS loans for parents and graduates and Stafford loans to the 10 year Treasury note. The rates will be determined every first of June and then locked in for the life of the loan. At current rates, students for the upcoming fall sessions will be locked in at 3.8 percent for subsidized Stafford loans and 5.4 percent for unsubsidized loans. The compromise has both good and bad qualities for students, according to education experts.

The good news is that this bill lends stability to a process that has led to political showdowns in the past. This fact keeps students from being surprised on rate hikes or changes due to waiting for Congress to act. The bill also does not have an expiration date. The rates are locked in every year. It also has universal effect. All federal loans are eligible for rate reduction and locks. Repayment plans are becoming more generous to help alleviate the likely higher interest rates. Continue reading “New Rules for Student Loans” »