If you know one thing about college in 2022, it’s probably that it’s pricey. Believe it or not, the higher education industry in the US is projected to double to nearly $170 billion by 2028, and you’re fronting the bill!
Well, college is still necessary for most of us seeking lucrative and fulfilling careers, but it still leaves its mark on our finances. Luckily, that doesn’t have to be the case. Let’s talk about paying for college and how you can make it easier for yourself!
Why Is Paying for College so Hard?
Since student loans became widely available, the cost of college has skyrocketed. College debt is now the second-largest form of debt in the US after mortgages. Currently, the average student debt in the US is around $30,000, and numbers are only increasing.
Conversely, student loan debt is financially crippling for many graduates, and it’s not like other debts. Unlike credit card debt, you can’t file for bankruptcy to alleviate student debt, meaning that it will be with you until it is paid off.
While the debt may not seem like much when entering school, graduates quickly learn the reality of their situations and often struggle to keep up with payments. In many cases, students of private schools who didn’t receive many scholarships or grants may pay more in student debt than they do in rent or mortgage payments, even with a 15-year loan.
While $30,000 is the average, some students owe well into the 6-figures and are forced to pay upwards of $1,000 a month throughout their loans’ durations. Fortunately, with the proper planning in advance, you can alleviate this debt or prevent it in the first place. Believe it or not, there are still plenty of students graduating with no debt.
With a little groundwork, you could save thousands of dollars and still position yourself for a bright career in the future.
Choose the Right Loans
Without a doubt, FAFSA is the best loan program in the country, as it’s run through the federal government to allow people of all financial backgrounds to afford school. Interest rates are the lowest you will find and fees are very minimal.
FAFSA has made it possible for thousands of Americans to afford college that otherwise couldn’t, and almost everybody is eligible.
However, not everybody qualifies for FAFSA, unfortunately. If you’re one of those people, then it’s best to shop around and find the right student loan programs. Choosing the right lender could save you a small fortune, so do your research.
Private Loans
For example, let’s say you go to a private school and you plan to pursue a master’s degree or another graduate program. After your 4-year degree, it’s not unheard of to spend $200,000 total. Let’s cut that in half to be more applicable to the average private school student.
Either way, college is probably going to be the second-largest purchase of your life, so we have to consider interest rates. On a $100,000 loan, an interest rate of 3% and 6% has a difference of $3,000. Would you spend an extra $3,000 on a car?
Not to mention, private lending companies hold their own policies for coverage and fees. Late payment fees, offset fees, and plenty of others could cost you another small fortune.
Let’s say you find two lenders and one offers you an interest rate of 3% and the other at 4%. Well, if the one offering a 3% interest rate has a 1.5% fee and high fees for the requested duration of the loan, the 4% is the better option, assuming they don’t have those fees.
Think of it this way, if you spend two hours reading the fine print before making your decision and you save $1,000, then you earned $500 an hour to read. Most people would take that offer in any other context!
Apply for Scholarships
Grants and scholarships are excellent ways to help alleviate some of the burden that comes with college expenses. Essentially, this is the time-tested way to help pay for college, you just need to find the ones that work for you.
Remember, even small scholarships and grants add up, so applying to as many as possible is a great idea. Using the same logic as shopping for loans, spending an hour to write a letter for a $400 grant means you earned $400 an hour.
Sure, in the context of thirty, fifty, or a hundred thousand, that doesn’t seem like a lot. However, for a 15-year loan paid monthly, every $400 could eliminate an entire month of payments or lower your monthly payments by more than two dollars. Apply for enough of them and it adds up!
Now, if you manage to score a much larger scholarship or grant in the range of $10,000, that could easily eliminate a year or two of payments or save you over $55 a month. Take your time and look for these opportunities because they exist!
Even if you didn’t have excellent grades, there are still plenty of scholarships available for people of different races and ethnicities, military backgrounds, test scores, volunteer work, and so much more. Check out this great post to read for more information about applying for scholarships so that you can see how to get started. You’ll be glad you did later on.
Choose an Apartment
If it is possible with your busy school schedule, paying for an apartment as you go could save you a lot of money on your student loans. Very few college students have the money to pay for an apartment upfront, but if you get a job and choose to pay for housing as you go, it will save money on the final debt.
Also, you likely won’t be spending more on the apartment than you would on the dorm. Instead, you will only be paying monthly for a larger space with more freedom.
Take a moment and review your school’s room and board costs. Now, compare them with apartment prices in your area by checking out Craigslist or Zillow. You’ll notice the prices are very similar for nine months, and apartments are even cheaper in most cases.
For example, if you pay $12,000 for a form for the year, you’re only living in it for eight or nine months. That means that you’re likely paying between $1,300 and $1,500 a month for your room.
Well, if you find an apartment for $1,500 and get a roommate, you’ll save 50% on housing, have more room, less debt, and not be subjected to campus rules for your stay. Also, most landlords around schools will offer school year leases to students, meaning you won’t have to pay in the summer if you won’t be living there.
Even better, if you can find the right program near home and live there, that will save you plenty of money. You can then put money from your part-time job, summer job, or another income source into paying off tuition.
Choose the Right Job
Don’t skip over this section, even if you don’t plan to work while in school. Of course, if you are paying for an apartment, then finding a decent job that fits your schedule is important.
What’s more important is finding jobs that pay for college, whether you’re in school or already graduated. Depending on your field, this is very feasible as tuition reimbursement is a common benefit these days.
Now, it’s important to remember that tuition isn’t all that much if you live on campus. Although, if you live in an apartment and receive full tuition reimbursement from your job, then you could get through college by simply paying for textbooks.
Of course, full tuition reimbursement is difficult to come by. Look for companies offering tuition reimbursement that have jobs specific to your field of study. This will help you find the right jobs after college.
However, you can start now. Some companies don’t require a college degree that will help you pay for school. Some benefits are specific to certain colleges or programs, but some are not, including:
- UPS
- Starbucks
- Chipotle
- Taco Bell
- Home Depot
- Walmart
- Amazon
- FedEx
- AT&T
Also, these companies (and other companies) offer tuition reimbursement even for part-time workers. Work one of these jobs while in school, use your paychecks to fund your apartment, and pay off your tuition. From there, you’ll graduate with virtually no debt!
Although, you should look into the company policies before starting, as they all differ greatly. Some will require you to work for a year, study a specific field, or something else.
Work-Study Program
Another excellent option in terms of paying for college and seeking work opportunities is a work-study program. Many fields offer these programs as they seek a new, skilled workforce to join their teams after graduating.
These programs are designed to allow students to earn money either on-campus or off to help fund their schooling, and they are often relevant to your field of study.
For example, a marketing student may help with the school’s marketing department in exchange for reduced tuition and/or a paycheck. Conversely, a computer science student may help with the school’s IT department and any major could help as a teacher’s assistant or research assistant later on in their studies.
Every school has tutoring positions, library jobs, and others. There could also be jobs in the fitness center, facilities department, or anywhere else on campus.
Moreover, there are benefits to these programs. If you manage to find a program that’s relevant to your field of study, you could earn income, pay down your debt, and gain relevant experience before entering the workforce.
Also, this is all without having to leave campus, which eliminates the need for transportation expenses you’d likely have with other jobs.
Pay as You Go
Assuming your part-time job can’t cover tens of thousands of dollars each year, especially if you’re paying for rent, making small payments is still a good idea. If you stumble upon some extra money from a stimulus bill, tax return, or an odd job you did, it doesn’t hurt to lower your bill.
Remember, every little bit counts. If you put an average of $50 a month into your loans throughout a 4-year program, that’s $2,400 off your bill. Also, that’s the average, so most of that can come from your summer job!
Consequently, if you’re able to pay $1,000 a year in one lump sum, that’s $4,000 off your total loan. Remember that you will have to pay this money at some point, so any amount that you can get off your back now should be welcomed.
We understand that this is difficult for most college students. There’s a reason “broke college student” is a term. However, if you can manage to make small payments early on with the right scholarships and off-campus housing, you could graduate with significantly less debt than your peers.
Also, if you start school and you have some money saved up or parental assistance, try putting some money down to fund your initial studies. The sooner you take the stress off, the better.
Fund Your Future
We know how challenging paying for college is these days, which is why we hope you will use these tips to help fund your studies. Remember, these tips are used best in tandem, so the more strategies you use, the better.
College is still necessary for the most fulfilling jobs on the market, so choose the major that excites you most and avoid setting yourself up for crippling debt. Get started right away and keep reading our blog for the latest helpful tips!
