Paying for College

College has always been pricey, but these days tuition and other college-related expenses are rising much faster than general cost of living. That is why it's important to know how you will pay for college, what options are available to help you do so and how to develop a sound financial plan.

If you're independently wealthy, you can probably afford to stop reading now. For everyone else, there are a variety of options to help you pay for college.

Almost all college students have access to one form of financial aid or another. This can include scholarships, grants, work-study and student loans. Most student loans come from the federal government, while scholarships and grants are funded by a wide variety of sponsors. Major colleges and universities usually offer scholarships, grants, work-study programs and campus employment.

Financial planning should start in high school and be a factor throughout your college selection process. Start by talking with your guidance counselor and familiarizing yourself the basics of college financing. It's also vital that you talk to your parents and keep them in the loop.

As you research individual schools, find out what financial aid packages will be available to you. It's good to have an idea of how you'll pay for college before you commit to a school.

Know What Your College Offers

Once you've selected a college, one of the first things you should do is contact their financial aid office. Before you select classes, before you find a place to live, you need to develop a financial plan for college. The financial aid office will provide information about what specific financial aid packages your school provides.

The range of options can vary considerably from school to school and student to student. Make sure you understand what is offered and what you qualify for.

Federal Aid

The United States government offers several financial aid options, including student loans, grants and work-study programs. In order to qualify for any of these, you are required to fill out the Free Application for Federal Student Aid, commonly known as FAFSA.

The application is due the January before you attend college. You can find it, along with plenty of information about federal aid, at

Scholarships and Grants

Scholarships and grants are the most desirable form of aid because they do not have to be paid back. They are essentially free money. Scholarships tend to be awarded for academic or athletic performance, while grants are most often based on financial need.

Scholarships come from a variety of sources, but most commonly from colleges and many of their individual schools and departments. You can also apply for scholarships from the state and federal government, as well as the private sector, which can include businesses, special interest groups and private scholarship funds.

When you contact the financial aid office, also ask about scholarships from outside groups, including businesses, private scholarship funds and social, ethnic and religious organizations. You may qualify for a scholarship based on any number of factors, including income level, military service, gender, race, age, religion and field of study.

Grants are typically based on financial need. Undergraduate students can apply for the Federal Supplemental Educational Opportunity Grant and the Federal Pell Grant. Many states award need-based grants, as well grant funding for graduate research projects.

Some students actually choose which college to attend based on the availability of scholarships and grants. One school may have a dozen such awards that you could apply for, while another may only have a few. There are a number of websites that allow you to focus your college search based on scholarship and grant criteria.

Veterans' Aid

If you have served or are currently serving in the United States Armed Forces, you most likely qualify for financial assistance from the Department of Veterans Affairs. The VA also has programs for military families, including spouses and children of soldiers who have been killed or wounded in military service.

Work-Study Programs

Federal Work-Study (FWS) programs are funded by the federal government, but operated through individual colleges. FWS programs are only available to students who demonstrate a financial need and are enrolled at least half-time at a participating college or university.

Currently there are over 3,000 educational institutions that receive FWS funds. Most schools that do not participate still operate student employment programs geared to help low-income students pay for college.

In either of these programs, the job opportunities are typically limited to part-time, lower level positions on campus. These may include jobs like department clerk, parking attendant, cashier, cafeteria cook and campus/building maintenance.

Student Loans

The United States government offer two different need-based loans: the Federal Perkins Loan and the Federal Subsidized Stafford Loan. They also sponsor the Federal Parent Loan for Undergraduate Students and the Federal Unsubsidized Stafford Loan, which are available regardless of financial need.

Student loans are typically very low interest (anywhere between 2% and 8%), but even so, students often accumulate tens of thousands of dollars in debt and spend decades paying off loans. This is because college is so expensive in general. That is why you want to exhaust all the options described above before you apply for a loan.

Despite the promise of debt, most students rely on loans for at least part of their college education. If you plan on getting student loans, make sure you have a long-term employment plan so you will have the means to begin repaying the loans after you graduate.

Have a Financial Plan

When approaching college, many students only think of finances as an afterthought. But just like the rest of your college experience, you should have a long-term plan. If a more expensive college will lead to higher paying employment, such as doctors or lawyers, the investment may be worth it.

If you can incorporate your college finances into a big-picture plan, you will not only know where you're gong in life, but how you'll pay for it.

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