Tuition and fees alone cost nearly $9,000 per year at a public four-year university. Add room and board and the price tag jumps to $18,000-plus. Out-of-state students should expect to budget significantly more; nearer $31,000 is realistic. To attend one of the many private schools across the country the average cost for tuition, room and board ranges in the heady neighborhood of $41,000 per year, usually much more. None of these amounts include books, school supplies, transportation, clothing, minimal entertainment or any other incidental expense.
For many families, covering expenses of such magnitude with out-of-pocket resources is simply not an option – nor should it be. There are a number of ways to fund a post-secondary education even while minimizing – or eliminating – dependence on borrowed cash. Families and students need only be diligent, persistent and creative.
If you expect to attend college in the fall of 2015 (or you are the parent of a high school junior), now is the time to begin your research if you haven't already begun.
Philosophy (not price tag)
First, know what fits your values and goals. Identify schools and programs that share your philosophy. Are you an activist? An artist? Do you love helping people? Passionate about business? Are you conservative? Liberal? There are schools that you will love . . . and others you will loath. You don't have to choose a major just yet. Colleges don't expect incoming freshmen to have their life's path planned out at the tender age of 17 or 18. But the more closely aligned the school and its programs are with your beliefs and personality, the greater the odds of obtaining a favorable response from the Admissions Office and offers of grants and scholarships.
CNN just this week reported that Harvard and other Ivy League schools are stepping up efforts to reach out to and enroll more low-income students, noting that "students don't even realize some colleges are an option."
Jason Lum, J.D., M.P.P. of Walden University concurs. He warns applicants not to select schools because they appear to fit the budget, nor scratch off schools that are too expensive. "Don't put the cart before the horse," he cautions. "The worst way to pick a school is based on its advertised price tag. Instead, find the schools that best fit what you're looking for. Then figure out how to pay for it." (Walden University has particularly comprehensive and easy-to-navigate information about all things financial aid at http://www.waldenu.edu/financial-aid.)
It's FAFSA time
Fill out the FAFSA – the Free Application for Federal Student Aid. Even if you think your family earns too much to qualify for aid or you don't plan to take out student loans, fill out the form anyway. Many scholarship and grant programs require it. Neglect to complete the form and you take yourself out of the running for free money. A new, complete FAFSA is required for every year.
"The worst that can happen," says Jason Lum, "is a financial aid award with nothing in it. That's rare. At the very least, the student will be eligible for work-study or student loans. And if you must take a loan, it's almost always better to take a federal loan rather than a private one. But that's not possible without a FAFSA."
Don't dodge the FAFSA in order to hide the fact that you qualify for aid. Self-consciousness about modest household income is needless. An applicant’s financial situation has no bearing on the admissions process. The school will not rule out anyone because they need aid. In fact, the school won't consider your finances until an offer has been made and accepted. And then, financial aid awards are based on need and are doled out in one form or another to the vast majority of students.
In a related task, find out what your Expected Family Contribution (EFC) will be. Students and their families are expected to make a contribution towards higher education costs. EFC is determined by calculations found in the EFC Formula Guide for 2014-15. EFC Formula Guide for 2014-2015. Note that the EFC can be as little as zero.
Free money for college? Really?
A finite amount of available money for college is there for enterprising students who seek it out. Jason Lum explains, "it's a myth that millions of dollars in free money goes unclaimed every year. But the truth is still quite good." Scholarship and grant money is there for the taking. The problem is that most students never try. Perhaps because young people don't fully grasp the concepts of debt and budgeting and don't place enough importance on ferreting out free money. Parents generally can't or won't force teens to perform research or complete the admittedly laborious application process. The relatively few who actually toss a hat into the ring end up winning a disproportionally greater share of the pot. That is, a small percentage of students receive the lion's share of the money.
"It may sound counterintuitive," says Lum, "but for the vast majority of students, the number one source of money is the college itself." Don't shy away from expensive schools. Indeed, private colleges often offer better financial aid packages than public schools. In other words, it may often be cheaper to attend a private school.
Alternatives to student loans
No matter where you choose to pursue an education, don't depend on student loans to get you through. Do everything possible to avoid borrowing money unless it's absolutely necessary. And then only in the smallest amounts to cover specific, critical expenses.
Check out the seven Work Colleges. Qualified students (for some schools that means all students) are guaranteed "adequate financial assistance" or "100% of the cost of education." The seven colleges are Alice Lloyd, Berea, Sterling, Blackburn, Ecclesia, Warren Wilson and College of the Ozarks.
Among other resources (the list is not exhaustive):
- Curtis Institute of Music maintains an all-scholarship policy
- Deep Springs College, a two-year liberal arts college, offers a full scholarship to every student accepted
- Military service academies are free. In exchange for a fully-funded, four-year undergraduate education qualified students serve at least five years of active duty following graduation.
Comb through scholarship possibilities online via a reputable, legitimate, free site like Fastweb or Sallie Mae. "Register with a user account so you'll be notified of good matches," recommends Lum. "Let the website do the work."
High school students who know now what field they want to specialize in should foster a relationship early with a college that fits their aims. In some cases, a preparatory school connected with the college is available.
Men and women in pursuit of a religious education will find vast funding resources in their denominational community. Many local church parishes offer scholarships to Christian colleges. The same is true of local synagogues that support study at the Chicago Center for Jewish Studies or similar programs at other colleges.
Creighton University, a Catholic school in Omaha, offers several attractive scholarships. For example, post-graduate students who demonstrate both a financial need and potential for excellence and who are engaged in full- or part-time ministry, are eligible to receive a 50% tuition discount in addition to a 10%-25% price reduction.
In sync with the 21st century, online schools tout many benefits including affordability. Several major news outlets have written about Western Governors University, a nonprofit online institution whose price tag is significantly lower than that of traditional bricks-and-mortar schools. Moreover, WGU offers a competency–based degree program (as opposed to credit hours) that might be especially appropriate for adults with workforce experience.
Community colleges generally offer coursework that is fully transferable to major universities, but at discount pricing. Students who wish to enter a specialized field of study at an out-of-state public school are excellent candidates for community colleges where they can complete prerequisites for a fraction of the cost before entering a four-year university at non-resident prices.
Employer tuition assistance
Anyone with a full time job should ask if their employer offers tuition assistance. Many employers provide 100% tuition reimbursement, subject to a maximum amount, so long as the student maintains a minimum grade point average and a full time position with the company.
Vocational rehabilitation funds. All states offer vocational rehabilitation services. In many cases, the opportunity extends to adults on parole or probation. Adults who receive Social Security benefits (SSI or disability) are generally presumed to be eligible for services.
Charity Reedy, Chief Enrollment Management Officer at Gallaudet University explains that “Vocational Rehabilitation, or VR, is a federally-funded state program that helps state residents who meet specific requirements and have disabilities get the training and education necessary to secure employment. We advise prospective students to meet with their VR counselors as early as their junior year in high school to establish a strong relationship and to openly discuss their goals, expectations, and budgeting for their college education and beyond."
Disabled students should check with their vocational rehab counselor or the local Department of Rehabilitation office. Additional information about financial aid (and free money) for students with disabilities is available on FinAid.org. Ex-offenders should start with their parole or probation officer.
Loan forgiveness. Students who go into certain fields of work and borrow money for school are eligible to have all or a portion of their student loans forgiven. Teachers are eligible to receive up to $17,500 in loan forgiveness. Adults employed in public service (public safety, law enforcement, public health, education, social work, and many other fields) can see the balance of their loans forgiven after ten years of payments.
Loan repayment assistance programs. Many law schools have long offered student loan repayment assistance in order to allow graduates to take on low-paying jobs that benefit the community. Private colleges are now following suit, offering loan repayment assistance on a sliding scale.
Key steps to take
Start early. Think seriously about colleges as early as the 10th grade, and definitely by the 11th grade. Remember: look at schools, not price tags. And unless you are one of the few who are blessed with knowing what professional road to take, don't focus on choosing a major.
Complete the FAFSA. If you haven't done so for 2014, do it at once. Many grants and awards are given out on a first-come, first-served basis. That makes the date stamp on your FAFSA very important. The FAFSA is the basis for awarding Pell Grants which range from a few hundred to a few thousand dollars, as well as many other federal grant, work study and loan programs. You can correct FAFSA details after you file your tax return.
Get organized. Create a spreadsheet listing programs you want to apply for, contact information and due dates. Get in the habit of checking your email. Stay ahead of the game. Order transcripts and ask for letters of recommendation far in advance of when you'll need them. Remember, a small number of highly organized students receive the majority of financial awards.
Be timely. Organization is critical. You'll have to juggle different due dates for nearly every application you submit. Submit each application as early as possible, and always before the deadline. If you submit your paperwork even one day late you could be out of the running for that program until the following year. Or the school might run out of funds before they reach your application. "Scholarship application committees are extremely strict about deadlines. A B-average student who is well organized is more likely to win than the A student who waits until the last minute," notes Lum.
Scout options all year round. Don’t think college applications go out in the fall and scholarship requests are slated for the spring. Those are old myths. "Deadlines are all over the map and occur every month of the year," says Lum.
Do your part. Don't forget – attending college is about more than money. Eligibility for admission and funding also depends on grades and accomplishments. If you don't win a scholarship, contact the committee and ask (nicely) what you could have done differently in order to win. Then apply the feedback on your next round of applications.
Colleges and universities post excellent financial aid information on their websites. Read them.
SourcesCredit Card Insider's Student Hub.