28 Jan How Are Today’s Students Paying for College? Let’s Break It Down
Every so often you will hear something in the media about how expensive the cost of attending college has gotten. Yet every year, right about this time, tens of thousands of high school students across the country are anxiously awaiting notice of whether they have been accepted into the college of their dreams. While the cost of college might rise, just as the cost of everything else does, parents and students are being just as determined in their search to find ways to pay for it.
The number one way to pay for college is through financial aid. Each year, the U.S. Department of Education awards about $150 billion a year in grants, work-study funds, and low-interest loans to more than 14 million students. This aid can help cover the costs of tuition, fees, room, board, books and supplies. In addition to the federal government, aid can come from your home state, the college you plan on attending, or an outside organization.
There are also many great grants and scholarships which can help cover your college costs. These are often considered “free” money because they do not have to be repaid. Some are based on need and some are based on merit, while others have unique factors which apply. It is well worth the time to research the types of grants and scholarships which are available because they can go a long way towards helping you pay for college.
About one-third of today’s costs are being met through scholarships and grants. Another third or so is covered by parent and student savings. After that it comes down to student and parent borrowing through federal and private student loans. An August Discover student loans poll of 1000 parents of college-bound students revealed that twenty-nine percent of parents said that most of the money to pay for college will come from student loans. Half of the parents said that their children plan to use student loans, with 54 percent planning to use a combination of both federal and private student loans, 32 percent just using federal, 4 percent just using private, and 10 percent not sure.
Knowledge Can be Powerful
The poll also revealed that understanding the differences between federal and private student loans can help families determine what suits them best. While 68 percent of parents said they were very or somewhat knowledgeable about the differences, and 30 percent were either not very, or not at all knowledgeable. If you don’t understand the differences between these types of loans it is best to talk to the financial aid office at your college or talk to a trusted private college financial aid advisor who can help you make informed choices about the best choices for you.
Set up an appointment now for a free financial aid strategy session with College Financial Aid Advisors (CFAA). Also be sure to request your free copy of The Twelve Most helpful College Financial Aid Tips.