College can be expensive. And prices keep rising. You might even wonder if it’s really worth the financial investment.
It definitely is, according to the U.S. Bureau of Labor Statistics. A worker with a bachelor’s degree earns about $2,000 more per month than a high school graduate, and someone with a master’s earns $3,000 more.
Degree holders also experience much lower rates of unemployment. Those with associate degrees have about half the unemployment rate of high school dropouts, and those with doctorates have half the unemployment rates of associate degree holders.
Whether you’re applying to college for the first time or returning to school after a break, you’ll want to minimize your expenses. Use this guide to learn tips for finding financial aid and managing costs.
Students interested in determining their eligibility for student financial aid should complete the Free Application for Federal Student Aid (FAFSA), a resource provided by the Department of Education. It’s also helpful to understand the various types and sources of financial aid.
Scholarships and grants
Scholarships and grants are financial gifts given to all kinds of students, meaning you don’t have to belong to a certain group or repay the funds. There are a variety of sources for this type of financial aid, including businesses, civic organizations and community groups, the government, nonprofit organizations, and schools.
When you apply, keep in mind that some grants do have a service component. School counselors, financial aid advisors, and government programs such as StudentAid.gov can help you explore application resources.
Available through universities, businesses, and private programs, fellowships are highly competitive merit-based monetary awards usually given to graduate or postgraduate students. Graduate fellowships cover tuition, living, and even health care expenses. Medical fellowships cover tuition and living expenses for doctors studying specialties. Postdoctoral fellowships cover tuition, living expenses, and research costs for holders of a doctorate conducting specialized research or studying niche subjects.
Work-study is a need-based federal jobs program available to undergraduate, graduate, and career-program students. Since you’ll be working for the funds, there’s no nothing to repay. Jobs are limited to public service or those related to the student’s field of study. Apply using FAFSA or check with a school’s financial aid advisor.
Financial aid through loan programs usually must be repaid. There are two types of loans used to pay for college: federal and private.
The U.S. government grants federal loans and defers repayment until after graduation. Students or their parents can apply for these low-interest, fixed-rate loans, and there are forgiveness options. Need-based loans are available, and no credit checks are required for students.
Private loans are available from banks, credit unions, schools, and state governments. They aren’t based on need, anyone can apply, and credit checks are required. Interest rates vary and repayment usually begins immediately.
Other financial aid
Other ways to reduce the cost of college include tax credits such as the American opportunity credit and the lifetime learning credit, which pay for books, supplies, and equipment. Aid is often available for military families and students studying abroad, as well as for students entering high-demand fields such as health care. Some employers offer tuition reimbursement for employees.
Scholarships, loans, and other financial programs can help you pay for college, but you can also reduce costs by carefully assessing program options and potential expenses.
When comparing tuition, check to see if you can test out of courses or receive credit for work experience. Ask about tuition discounts for children of alumni, veterans, older students, family members of current students, or school employees, if applicable. If your school charges by the semester or term, take as many courses as you can to reduce the overall cost. Pay attention to in-state versus out-of-state tuition rates, even if attending college online. When changing schools, shop around for one that accepts as many transfer credits as possible. Finally, remember that cheaper isn’t always better. Make sure the schools you’re comparing are reputable, accredited institutions.
Look beyond tuition
Tuition is only one aspect of paying for college. Look closer at these costs to find additional ways to reduce the cost of college. Graduate and postgraduate programs may include travel expenses. Specific degrees sometimes have additional charges, and lab, technology, or other fees may apply to specific programs.
Save where you can
Sure, you could stay at home and eat packaged ramen every night. But there are other ways to save money and stay on top of your finances.
You could rent textbooks or buy them used. Take advantage of student discounts, and use budgeting and financial literacy tools to help you stay on track. The Federal Deposit Insurance Corporation’s Money Smart for Adults is one such program, but many banks and credit unions also offer a variety of consumer education tools to help customers learn to manage their finances.
Attending classes online can be the simplest way for many students to reduce the cost of college. There are several potential cost benefits of online programs compared with on-campus programs.
You can reduce living expenses by living at home instead of in student housing. You can also save on parking and transportation costs, as well as dining expenses. Online schools may offer lower per-credit rates for students who take more hours, encouraging students to complete programs faster, which reduces overall costs. Studying online also helps some students maintain a work schedule so they can earn income to pay college expenses.
Just be sure to consider total costs, including school fees and possible personal expenses such as technology upgrades, when looking at the potential benefits of online programs.
The benefits of a college education are clear. Individuals with education beyond high school not only earn more and experience less unemployment over their lifetimes but also live longer, according to a study published in the American Journal of Public Health. Armed with strategies for accessing financial assistance, saving money, and comparing college options, you can find a certificate or degree program that matches your life and career goals.
- American Journal of Public Health, “Education, Race/Ethnicity, and Causes of Premature Mortality Among Middle-Aged Adults in 4 US Urban Communities”
- BestColleges, FAQ About Online Colleges
- CollegeBoard Newsroom, “A College Education Pays Off”
- CollegeBoard, “Trends in College Pricing and Student Aid 2020”
- College Scholarships, 101 Grants
- Consumer Financial Protection Bureau, Choosing a Student Loan That's Right for You
- Forbes, “7 Ways to Reduce College Costs”
- Internal Revenue Service, Tax Benefits for Higher Education
- Nerdwallet, “How to Save Money While You're in College”
- Pearson Pathways, “Scholarships and Financial Aid for Online Graduate School”
- StudentRate Student Discounts
- StudentAid.gov, Avoiding Student Aid Scams
- StudentAid.gov, Choosing a School
- StudentAid.gov, FAFSA Application
- StudentAid.gov, Tax Benefits for Higher Education
- StudentAid.gov, Types of Financial Aid
- StudentAid.gov, Types of Loans
- StudentAid.gov, Types of Scholarships
- StudentAid.gov, Types of Work-Study
- StudentAid.gov, Understanding College Costs
- U.S. Department of Education, College Navigator
- U.S. Department of Education, Grants Overview
- U.S. Department of Education, Net Price Calculator Center
- University Federal Credit Union, Financial Tools & Advice
- University of Southern California, Work-Study/Non-Work-Study
- U.S. Bureau of Labor Statistics, Education Pays
- U.S. News, “10 Things to Consider Before Paying for an Online Degree”
- U.S. News, “Current Trends in Online Education”
- U.S. News, “Financial Aid for Online Programs”
- U.S. News, “What a Fellowship Is”
- YaleNews, “Want to Live Longer? Stay in School, Study Suggests”
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