How to Fund College
Want to know ways to get college funding? Luckily, there are alternatives to walking the long and dusty road toward debt. Listed are few ways to get around the financial burden of higher education. We have included information on free federal aid, student loans, scholarships, tax credits, work programs, financial aid applications, deadlines, and much more! We encourage you to look at all of these options to find the ones that match your needs. This will allow you to reduce your out of pocket expenses and determine what funding you may be eligible for.
Apply for Need Based Financial Aid
Apply even if you don’t think you qualify for need based funds, there are a lot of factors that are taken into consideration and you may just qualify. Need based financial aid is determined based on your college financial need and other eligibility requirements (such as what your family can contribute) and the college’s Cost of Attendance (COA). Each school has fees associated with the cost of attendance. The COA takes into consideration how much need based financial aid you need by factoring in:
- College tuition and fees
- College room and board
- Costs of books and supplies
- Other: child care, study abroad programs, personal computer, loan fees, etc.
Apply for the FAFSA
To get need based financial aid from the US government, you must apply for the FAFSA (Free Application for Federal Student Aid). This is the application necessary to apply for aid including loans and pell grants.
The FAFSA is a free form online located at fafsa.ed.gov. Note the .gov at the end or the URL. Other sites are not the official U.S. government site and charge fees. You will need to have your taxes to apply for the FAFSA. If under the age of 23 you will also need your parents’ taxes (unless you are married, have a child, or are in the military).
Tip: Federal aid applications are free and if a fee is required it is not a government site.
Anyone under the age of 23 is considered a dependent and your family’s income is taken into consideration even if you live on your own or support yourself. In some circumstances (if you have a child or are in the military for example), a college can make a professional judgment as to whether to consider you independent — thus qualifying you for more aid.
When applying for the FAFSA, list all universities or colleges you are considering. The aid does not activate unless you attend one of the schools listed, so adding any potential school you may attend can save you time in the long run and start the paperwork process while you are still exploring your options.
Additionally, new users are required to create a login and pin when filling out the FAFSA. Write down this information as you will use it each time you renew your FAFSA. Your pin substitutes as an electronic signature.
Reapply for FAFSA Yearly
You must reapply for the FAFSA every year. A good rule of thumb is to reapply when you (or your parents) file taxes each year.Did you know? FAFSA results are leveraged by the educational institutions for which a student applies and up to ten colleges/universities can be listed on the application. Each school determines the amount of U.S. federal government student aid that will be received based on the FAFSA results.
Each state carries a different deadline, so you will want to check your states deadline! You can do that by reviewing the 2017-2018 FAFSA deadlines pdf.
Student Aid Report
After submitting the FAFSA to get college funding you will receive a Student Aid Report that summarizes the information you filled out on your application. Review that information and be sure it is accurate. You’ll receive your Student Aid Report through email if you provided one, or in the mail.
By the way, add FederalStudentAidFAFSA@cpsemail.ed.gov to your e-mail’s contact list so your Student Aid Report arrives in your inbox and not your spam folder.
If you made a mistake on your FAFSA Student Aid Report, visit studentaid.ed.gov/fafsa/next-steps/correct-update to receive information on how to correct it.
Need-based federal aid consists of the following aid you could qualify for:
- Federal Pell Grant
- Federal Supplemental Education Opportunity Grant (FSEOG)
- Direct Subsidized Loan
- Federal Perkins Loan
- Federal Work-Study
Federal Pell Grant (Free Money)
The Federal Pell Grant is financial aid money that is awarded to undergraduate students. For the 2016-2017 school year, the maximum amount that can be awarded annually was over $5800 (this amount can vary from year to year). If you qualify for the pell grant, you can be eligible to receive this funding for up to twelve semesters before it becomes unavailable. This grant is not on a first come first serve basis. As long as you are eligible, this money is yours whether you are the only one who applies for the grant or the millionth.
Note: There are provisions where teachers seeking to earn a degree after earning their bachelor’s can be eligible.
After filling out a FAFSA application for need based financial aid, students who receive Federal Pell Grants will have first priority to FSEOG (Federal Supplemental Educational Opportunity Grant) money (money that does not need to be repaid). The U.S. federal government divides this financial aid money differently for each school and once the money runs out and it’s gone.
Tip: FSEOG financial aid is awarded on a first come first serve basis, so early filers of the FAFSA have the best chance of receiving this money.
Direct Subsidized Loan (AKA Stafford Loan)
Direct Subsidized Loans are low interest loans provided by the U.S. federal government for qualified undergraduate students based on financial need. Although this is a loan and you will have to repay it, the U.S. Department of Education pays on the interest of the loan while the student is in school. The amount you can borrow is set by the educational institution the student will be attending, but will never exceed the financial need amount of each student (determined by FAFSA).
Direct Subsidized Loan Details:
Direct Subsidized Loans are available to undergraduate students with financial need.You must be enrolled in either a trade/vocational/technical school, community college, and/or four year undergraduate college/university that participates in the Direct Loan program. You must be enrolled at least part-time or a minimum of 6 credit hours. Your school determines the amount you can borrow and the amount may not exceed your financial need.
The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
- while you’re in school at least half-time
- for the first six months after you leave school (referred to as a grace period*), and
- during a period of deferment (a postponement of loan payments)
Payment on a Direct Subsidized Loan begins after a 6 month grace period when a student is either no longer enrolled or graduates. This gives you time to become financially stable before you start getting the bill in the mail. However, if there are times during your repayment that you experience economic hardship or the loss of a job, payments can be deferred. Be aware, interest will still accrue during this deferment period.
Federal Perkins Loan
Federal Perkins Loan are low interest loans for undergraduates, graduates, and professional students. Federal Perkins Loan are U.S. federal government student loans with low interest rates provided undergraduate, graduate, and vocational students who demonstrate high financial need. Not all schools offer Federal Perkins Loan options. The U.S. federal government provides schools that offer these loans a set amount that is unique to each college/university.
Note: Students that have extraordinary financial need may want to consider identifying schools that offer Federal Perkins Loans. As the availability of funds is based on each school, getting the FAFSA completed quickly is a must due to the limited funding available.
The U.S. federal government work-student program is offered to both part and full-time undergraduate, graduate, and professional students that qualify for need based financial aid. Students are paid for part-time work on the campus they are currently enrolled in to help cover the costs associated with going to school.
Need Based Federal Aid Resources
- Direct Subsidized Loan
- EAC formula
- Federal Pell Grant
- Federal Perkins Loan
- Federal Supplemental Education Opportunity Grant (FSEOG)
- Federal Work-Study
2. Non-Need Based Financial Aid
Non-need based college financial aid provides other funding options for students who do not qualify for need-based financial aid. These funding options take into account all scholarship and aid provided both federally and privately to determine supplemental financing needed for education.
The following are non-need based federal student aid options:
- Direct Unsubsidized Loan
- Federal Plus Loan
- Teacher Education Access for College and Higher Education (TEACH) Grant
- Direct Unsubsidized Loan (AKA Unsubsidized Stafford Loan
Direct Unsubsidized Loans
Direct Unsubsidized Loans are available to undergraduate and graduate students and are provided by the U.S. Federal Government; there is no requirement to demonstrate financial need. Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive. You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods. If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan).
Federal Student Aid, U.S. Department of Education. studentaid.ed.gov/types/loans/subsidized-unsubsidized
Federal Plus Loan (AKA Direct Plus Loan)
The Federal Plus Loan is for graduates, professional students, students, and parents of dependent undergraduate students. These loans are provided by the U.S. Department of Education for students who are at least enrolled part-time. Adoptive and biological parents can apply for this loan on behalf of their dependent student as long as they are enrolled at an eligible school. This loan will require a credit check. If the borrowers credit is questionable, a endorser with good credit can co-sign for the amount.
Note: Anyone who endorses this loan is responsible for the payment should the holder of the loan default or miss payments.
CSS Financial Aid Profile
The College Board also offers a way to apply for non-federal financial grants and aid through their PROFILE program. The College Board’s PROFILE program allows you to fill out one form that goes to over 400 colleges. The College Board is a not-for-profit organization.
One benefit of the CSS Financial Aid Profile is the ability to add your own special circumstance of why you need money.
According to The College Board, it takes most people 45 minutes to 2 hours to complete your profile and as soon as you register. You will need your current and previous year’s W-2 Forms (or your parents), and any bank statements and investment information you may have (stocks, bonds, savings etc).
The College Board also provides an easy walk-through interactive that will help you accurately complete the application. You can start your CSS Financial Aid Profile at: student.collegeboard.org.
Teacher Education Access for College and Higher Education (TEACH) Grant
The U.S. federal government offers TEACH grants to undergraduate, postgraduate, and graduate students who will take certain classes, graduate, and teach in high-need demographic areas for four years upon graduating. The amount available annually to each student can vary year to year, but is generally around the $3500 – $4000 range.
Let’s look at the terms and conditions of the TEACH Grant:
- A student must be enrolled at an eligible school
- The field of study must be in a high-need teaching field
- Must gain employment for four years at an elementary, secondary, or educational service agency that focuses on low-income families
- Completion of four years of service must be within eight years of graduating or completing your course of study
- Maintain certain academic requirements while enrolled in school such as classes enrolled, GPA, and assessment examinations
Understand the terms. Should the terms of the grant not be kept, the recipient will have to repay the U.S. Department of Education with interest.
Non-Need Based Financial Aid Resources
- Direct Unsubsidized Loan
- Federal Plus Loan
- Teacher Education Access for College and Higher Education (TEACH) Grant
Write it Off (Tax Credits)
American Opportunity Tax Credit (AOTC)
The American Opportunity Tax Credit lets you claim $2,500 towards the cost of tuition, fees, and course materials paid during the taxable year. Also, 40% of the credit (up to $1,000) is refundable, so you can get it even if you don’t owe taxes. Even better news, this tax credit was recently increased to include the first 4 years of post-secondary education (it used to cover only the first 2 years) and was extended through 2017. You must be a degree-seeking student enrolled at least half-time to receive this credit.
Lifetime Learning Credit
The Lifetime Learning Credit differs slightly from the AOTC. It offers up to $2,000 in credit per return toward the cost of tuition and fees, but no portion of that is refundable. That means you will not receive the remainder if the amount exceeds what you owe on your taxes. This credit is also aimed at those with lower incomes, so you may or may not qualify depending on your earnings. However, there is no limit to the number of years you can use this credit, and you don’t need to be degree-seeking or full-time to claim it.
It’s important to note that you are not eligible to obtain the American Opportunity Tax Credit and the Lifetime Learning Credit at the same time. However, when a person no longer qualifies for one tax credit (say you already have your 4-year degree and no longer qualify for the American Opportunity Tax Credit), you can still qualify for the Lifetime Learning Credit because this credit does not require you to have less than a 4-year degree to qualify.
Learn more about the Opportunity Tax Credit and Lifetime Learning Credit on irs.gov.
Get a Job
To get the reimbursement from tax credits, you have to have paid taxes! You can cut down on the amount you pay for college by working your way through school. If you are going to work, you might as well do a job you love. Take the free job quiz to explore your job interests.
Join the Military
The military offers a number of educational options from providing college credit for time served, to tuition waivers and financial assistance for active members, veterans, and their families. The educational benefits can also pay you while you attend college classes. Visit the military or college article for more information. Scholarships are also available through the Army, Air Force, and Navy ROTC.
If you are considering the military or college, did you know you can do both? If you are not sure whether you want to join the military or go to college, the good news is you have options. You can join the military part-time (reserves) and get money while you go to college.
You can also join the military full-time and take online college courses or attend the college near your duty station. There are many colleges that cater to the military.
You can also go to college full-time and join the ROTC program. This option will allow you to serve after you obtain your college degree and enter as an officer. Of course, you can just go to college and not even join. The option really is up to you!
Read our article about military tuition assistance programs.
Join the AmeriCorp or Peace Corp
You only get what you give, and sometimes that’s a lot. A number of volunteer organizations offer special educational awards in return for good service. AmeriCorps, Peace Corps, and National Health Services all offer financial assistance for qualified participants.
The AmeriCorps and Peace Corps may not pay much but each covers living expenses and can be very rewarding career opportunities. They also provide college scholarships and tuition assistance along with invaluable experience.
The AmeriCorps is funded by the U.S. Federal Government and focuses on education and public service. At the end of your service, you can receive either an education award or a end-of-service stipend. They accept over 70,000 individuals annually to serve with local and national nonprofit groups.
The Peace Corps is an American volunteer program but has a more global reach. The type of work volunteers do is based on the needs of their host country. Volunteers serve in over 70 countries and their term of service is 27 months. Upon completion volunteers receive $7,425 pre-tax. Travel to and from the country you will be serving is paid for and you will receive a monthly stipend to cover your living expenses. PeaceCorps.gov offers more information.
Many overseas institutions are considerably cheaper than those in the U.S. If you speak German, you might consider getting your degree in Germany (where Universities are free, even to foreigners). Or, thanks to a surge in online degree programs and telecommuting jobs, it is now possible to get your degree and work from just about anywhere in the world with a stable internet connection. Online programs are sometimes (though not always) cheaper, and the cost of living in certain other countries can be quite low.
With a part or full-time job that allows you to earn a high-value currency such as the Euro, English Pound, or US Dollar, you could potentially live where your money goes further, cutting your daily expenses drastically and leaving you with a surplus to pay for school.
While this option may sound great, the reality of living abroad can be trickier than it seems. It is imperative to choose a stable environment with reliable internet connection where you are confident you can devote the proper energy and time to your degree and your work. Also consider the complications of being so far from home and family, and the possible complications of learning another language.
Compare College Tuitions
Finally, more expensive is not always better. Pick your school with care. Tuition is cheaper for in-state residents, for example, and employers often prefer experience and know-how over an impressive-sounding name. You might consider attending a community college your first two years and transfer credits later to the university of your choice. Or look into one of the many “tuition-free” schools available around the country. (Yes, they do exist. You may have to become a resident in a different state or work on campus for a certain amount of hours).
Learn how to research colleges to get the information you need to make an informed decision.
Source: The College Board, Annual Survey of Colleges
Apply for Scholarships
We know that funding your higher education is important and scholarships can help. Who offers these financial rewards? So how do you get scholarships? You can find scholarships offered by individuals, alumni, nonprofit/professional/religious organizations, private companies, social clubs, schools, and even employers. Nearly everyone is eligible for college scholarships. Scholarships vary in their amounts, ranging from tens of thousands of dollars to a hundred dollars. Students can receive multiple scholarships so apply for as many as possible.
When to Apply for Scholarships
Many local scholarship funds simply go untouched because students did not take the time to inquire or apply. If you spend time and effort on applying for scholarships, start by inquiring and applying for local scholarships.
Begin researching scholarships during the summer going into your Junior year. Each scholarship opportunity will have a specific deadline, requirements for eligibility, and application process. Identifying those scholarships you want to target, tracking their due dates, and gathering your application materials puts you one step ahead of the game.
Types of College Scholarships
Scholarships come in all sizes, terms, and conditions. Some scholarships cover all tuition, room, and board. Others can be a one time $100 reward. They can be annual or last throughout enrollment and graduation.
Three broad types of scholarships are:
- Academic Scholarships
- Characteristic Scholarships
- Odd Scholarships.
Academic Scholarships (AKA Merit Scholarships)
Academic scholarships, also known as merit scholarships, reward students based on their level of talent in one or more disciplines. Grades and academic standing are important. Because these scholarships are based on talent, financial need is not necessarily taken into consideration. Whether you are ready for college now, or preparing for the future, here are some key areas to focus on:
- Target to rank within the top 5% – 10% of your graduating class.
- Participate in honor or accelerated classes. Tip: Did you know there are community colleges that co-op with local high schools? You could graduate from high school and earn an Associates Degree at the same time.
- Attain a high score on PSAT, SAT, ACT
- Gain academic recognitions (i.e. essay contests, science fairs, spelling bees, honor roll)
Contact coaches of colleges you are interested in being a student athlete for well before your Junior or Senior year to being the recruitment process and increase your chances of receiving scholarship money.
Tip: College recruiters cannot officially contact students before July 1st going into their senior year!
As soon as you know the college and program you want to participate in, you can contact them as early as your 8th and 9th grade year. Your first contact should focus on introducing yourself to the coach and not inquiring about scholarship money.
- Create an online profile! Highlight your achievements, post pictures, and provide updates. This can provide a great resource for recruiters to find you and get to know you a little better.
- Keep up your grades. Try and shoot for at least a 3.0 GPA. Not only do you demonstrate you are a stellar athlete, but academic as well.
There is a wide variety of scholarships for those going into the arts. You may find scholarships for: painting, drawing, sculpture, photography, design, music, literature, and even the culinary arts (yummy!).
- Leadership: Are you a team captain or member of student council? Maybe you are the lead editor for the school paper or main student organizer for prom? Demonstrated leadership skills are a great way to reveal your character and drive to a review board.
- Community Service: From Big Brother Big Sister, to the local human society or soup kitchen, there are a wide variety of volunteer services that are in need of help. Yes, this is a great area to highlight on a scholarship application, but you never know, you just might find your niche and become a lifelong volunteer!
- Extra Curricular: This section combines anything from choir, sports, community service, church activities, and even part-time employment. Extra curricular activities allow for more of your personality to shine on paper while communicating to review boards you will probably contribute in many unique ways to your community upon college graduation.
- Ethnicity: These scholarships typically focus on minority students. Certain scholarships may also be categorized for women and LGBTQ students as well.
- Belief:A Faith-based scholarships are available for students who are members of a religious organization. Eligibility can be as simple as being a member to specifically pursuing a religious-based career or ministry.Â If you do not identify with a particular organized religious organization, there are scholarships for atheists, agnostics, and non-religious as well.
- Physical Attributes: There are scholarships tailored just for you for just being you! From height, sex, eye and hair color, there are scholarships whose eligibility are based on those physical attributes you were born with. Let’s not forget those scholarships for those of you left-handers or who are a twin/triplet. As unique as people are, there are unique scholarship opportunities that cover a wide variety of characteristics.
- Medical Related: Current medical conditions or survivors can be eligible for specific scholarships geared toward those who have experienced illness themselves or through a close family member as well.
Tips to get Scholarships
- Start early – at least six months prior to your start semester. You can even start the summer between your Junior and Senior year.
- Ask your local college about local scholarships.
- You only receive about 10% of scholarships you apply for — don’t get discouraged.
- Use the U.S. Department of Labor’s Free Scholarship Search Tool (link opens in a new browser window).
- View more scholarship opportunities at FastWeb.com (link opens in a new browser window).
Note: You should not have to pay to submit an application for a scholarship. If you come across a scholarship that includes an application fee it may be a scam.
Also, it is best to organize the college scholarships you are applying for. Make sure you note the deadlines for your scholarship application and read the directions carefully. Most require essays. Read the essay instructions particularly well. Since many scholarships require essays, you may find that submitting your first few scholarship applications take more time. As you apply for scholarships, you may have essays already written that you can modify for the next scholarships application.
You can start applying for scholarships during the summer between your junior and senior year. Also, ask the college you want to attend if they have scholarship opportunities, these may be easier to get.
Ask your Company for Tuition Reimbursement
Most major education institutions offer free tuition to full-time employees and their children, and some even offer reduced tuition for part-time employees. If you are an organized person capable of balancing school and work responsibilities, you could potentially earn an income, build your resume and bypass tuition costs all at the same time.
Additionally, if you are solid in your career choice, look for a job with a company that offers tuition benefits to its employees. Want to be a nurse? Hospitals will often pay your way. Looking for a career in finance? A job with that investment firm may just cover your tuition. Companies receive tax deductions for offering tuition programs for employees, so it’s inexpensive for them and a huge benefit for you both.
Typically, employees have to have been employed for a minimum length of time, be of full-time status, chose a major within an approved category, and maintain a certain GPA. Check with your employer’s HR department for eligibility, terms, and conditions.
Look for Loan Assistance upon Graduation
The following information does not help you go to college for free, but does help you reduce your cost to replay loans once your college education is complete. There are multiple student loan repayment options that came into effect during the Obama administration.
The Public Service Loan Forgiveness (PSLF) Program: If you work full-time for the government (this can be federal, state, local, or tribal) and make 120 payments, the rest of your loan can be forgiven.
There are also income-driven repayment plans. There are a number of income-driven repayment options, so visit the federal government site studentaid.ed.gov to learn more.