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The Study Space

How to Effectively Pay for College

To state the obvious, college isn’t cheap. Depending on the college you attend, tuition alone can cost anywhere from $10,000 to $50,000, not to mention the cost of living on campus as well as dozens of “hidden fees”, such as parking and books. Luckily, there are many options out there for students to alleviate some of the costs of college, while still being able to get the education that they need.

Financial Aid

It is extremely easy for students to fill out the Free Application for Federal Student Aid, more commonly known as the FAFSA, in order to receive up to $6,195 every year in federal financial aid, which does not have to be repaid. The amount you actually receive is based on your household income, in addition to many other factors.

FAFSA form
Photo Courtesy of FAFSA

Many states also have their own form of financial aid in addition to that which is distributed by the government–in California, it is called the Cal Grant. There is no additional application required to get a California state grant since the amount you receive is mainly based on the FAFSA as well; however, there is an additional GPA element that can possibly reduce your aid if you have not performed well academically.

Unfortunately, if you choose to attend college out-of-state, like I have, you will not be eligible for a state grant, as it only applies to colleges in your home state.

College Grants, Scholarships, and Work-Study

Another relatively easy form of money to get is a college grant. This is the money that your college will give you to further satisfy your financial need. Many prestigious private colleges are extremely generous with these grants, meeting up to 100% of demonstrated financial need. Personally, I got around 85% of my college costs covered through such grants, and it is certainly a reason that compels people to apply to top schools.

Outdoor image of one of MIT's buildings
MIT is one of the aforementioned colleges that covers 100% of demonstrated financial need. Photo Courtesy of MIT

Colleges will also give merit-based scholarships to top applicants, but these can be quite difficult to obtain, especially at the most competitive schools. They are usually given based on academic performance as well as other factors, such as your major and how impressive your activities and essays were to the admissions committee. There is also a possibility that your college can have an internal scholarship board that will grant current students scholarships if they apply for them.

The final step that colleges will take to ensure that their students have the best financial aid package possible is by providing a work-study option. Usually, students have to opt-in to this program, but if they accept it, they can earn a few extra thousand dollars that will contribute directly to their college tuition fees. You will have to work around 10-15 hours a week to earn this money, but this type of work is often easy and allows students to make more social connections with co-workers. It is also worth noting that this money is untaxed, so it does not affect the amount of financial aid you receive.

Private Scholarships

Private scholarships are always an option for students whose household income is much too high for financial aid, but these scholarships do come with many challenges. The rate of success for private scholarships is extremely low, as many scholarships will have thousands of applicants and only a few recipients, making them extremely competitive.

Personally, I would recommend only applying to smaller scholarships that have many barriers to entry, or scholarships that are extremely generous in the number of recipients it has. These are less competitive, and while they do provide less amounts of money, a little can go a long way if you accumulate enough of them.

If you are more confident in your abilities and believe that your grades are sufficient enough to withstand the tough trials of a top scholarship review board, you can apply for a more prestigious scholarship such as the Questbridge or Gates Millenium Scholarships, which can often provide a full ride to the college of your choice.

Group photo of QuestBridge winners
These students were competitive enough to be matched with a QuestBridge Scholarship. Photo Courtesy of QuestBridge

Getting a Job/Internship

If you find yourself in a position where you are unable to obtain any of the aforementioned types of aid, it is very much possible to get a part-time job or internship. I always recommend the latter over the former, as it will give you relevant career experience in addition to a little extra cash. Also, part-time jobs can be less optimal for students, since it may cause you to lose focus in school.

I know an alumni from my high school who held a part-time job at a bank during his second year in college, and it brought down his grades so much that he had to overload on credits his senior year to make up for his lackluster GPA. Otherwise, it may have been impossible for him to get into medical school. Always be careful when pursuing a part-time job. Also note that any type of job outside of work-study will be taxed, meaning that it can reduce the amount of financial aid you receive.

Student Loans

In recent years, the word loan has gained much negative association because many people take decades to pay off their student loans. Loans should always be used as a last resort for students, as there are much better ways to pay for college. However, they are not all entirely bad–in reality, student loans can definitely be taken advantage of properly.

People around a table discussing student loan options

The first thing to take into account is that government loans are typically better than private loans. The interest rates on loans given by the government are usually lower, and they are much more forgiving than private loans, only accumulating interest after you graduate.

Something else that is important to notice is the type of federal loan that you are being granted. There are usually two options: an unsubsidized loan and a subsidized loan. Always go for the subsidized one first. As the name suggests, this type of loan is subsidized by taxpayers, meaning that it will be more forgiving towards the borrower, only making you pay off the loan after you have already graduated.

Finally, always remember that taking out a loan is a double-edged sword. College should be considered an investment towards your future, meaning that you should only take a loan out if you are confident that you can pay it off. You can actually build a credit history with a loan if it is in your name. Depending on whether or not you pay off these loans on time, your credit score can be higher or lower, making it easier or harder for you to take out bank loans in the future.

Credit cards in a stack

With a lucrative career, it may only take a few years to pay off your loans, but without one, it can take decades. Pick your college degree wisely, and most importantly, make sure you can use it to make money!

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