There are lots of reasons to pursue a college education, but perhaps none more important than the fact that a degree gives you an exceptional return on your investment. Not only do college graduates make significantly more money over the course of their lifetimes, they also are more likely to find and hold onto jobs during difficult economic times.
Want proof? Take a look at these numbers from the National Center for Education Statistics and the U.S. Department of Labor, Bureau of Labor Statistics.
Most people fund their educations with a combination of personal savings and the following types of financial aid:
Grants and scholarships are gifts of money that don’t have to be repaid, and you don’t have to work to earn them. Grants come from federal and state government as well as from individual colleges, while scholarships can be awarded by groups as diverse as corporations, industry associations, non-profit organizations, churches and synagogues, and the U.S. Military. You can search for available scholarships on www.fastweb.com, www.finaid.org and www.collegeboard.com. Contact your local community foundations and chambers of commerce, and ask your high school guidance counselor for other area resources.
REMEMBER: You should never have to pay to apply for grants or scholarships.
Work Study is a federal program that provides students with part-time employment to help meet their financial needs and give them work experience.
54% of financial aid comes in the form of loans, which must be repaid.
Many high school students have the opportunity to take AP (Advanced Placement)courses. In these courses, students learn college-level material in subjects such as English, United States history and biology. Upon completion of the AP course, students are able to take a standardized AP exam that evaluates their college-level proficiency. Depending on how a student scores on the exam, colleges will grant credit for that course, which in most cases will apply towards core requirements, saving time and money.
The College Level Examination Program (CLEP) also helps provide students with a way to save time and money. Unlike AP exams, which require the student to have completed the AP course prior to taking the exam, CLEP exams do not have any prerequisite requirements such as completion of a specific course. CLEP exams evaluate students’ college-level proficiency of material in subjects such as history, science, English and business. The CLEP gives students the opportunity to receive college credit for what they already know by earning qualifying scores on any of 33 examinations. You can earn credit for knowledge you’ve acquired through independent study, prior course work, on-the-job training, professional development, cultural pursuits, or internships.
Find out more at www.collegeboard.com/student/testing/clep/about.html
Earning credits through AP and CLEP exams allows students to save time and money, lighten college semester course loads, take more interesting courses, and even graduate sooner.
A great place to start your search for financial aid is with the FAFSA, which should be completed soon after the first of January of your senior year. Check with your chosen institution to determine financial aid application procedures and deadlines. The FAFSA provides information to schools that determines the amount of federal, state and university grants allocated. It also allows you to borrow federal student loans, and may show that you qualify for Federal Work Study.
Federal loans allow you and your parents to borrow money to help pay for college through programs supported by the federal government — in many cases regardless of income level. Federal loans have a number of advantages over private loans, including:
When you fill out the FAFSA, you’ll list the schools you’re interested in attending. Then, once it’s submitted, the form will be used to determine the aid package you’ll be offered by each of the schools you’re considering. Please note, there are limits as to the amount a dependent student can borrow per year with a federal Stafford Loan:
File your FAFSA online at www.fafsa.ed.gov every year prior to the following academic year. Once your application is processed, you will receive a Student Aid Report (SAR), which will list your Expected Family Contribution (EFC).
You will also receive an award letter from each of the schools listed on your FAFSA to which you have been accepted. Those letters will outline your total cost of attendance and a financial aid package for that particular school. It’s important to note that if you are applying to private schools with higher costs of attendance, you may be eligible for additional aid. You should always look at the cost remaining after aid, rather than the published cost or amount of aid alone.
Once you’ve received your federal student loans, grants and scholarships, you may find that you need additional money to cover all of your expenses. At this point, you and your parents may want to consider other sources of funding.
Parents of dependent students can take out loans to supplement their children’s aid packages. The Federal Parent Loan for Undergraduate Students (PLUS) allows parents to borrow money to cover expenses not covered by the student’s financial aid package. Parent PLUS loans are the financial responsibility of the parents, not the student. Repayment begins during the academic year, but can be deferred until the student graduates or ceases to attend school. The interest rate on PLUS loans is fixed; income is not a factor in the credit decision.
These non-federal loans are issued by lenders like banks or credit unions, and often have variable interest rates and fairly long repayment terms. To qualify for a private loan, you are required to pass a credit check and usually need a creditworthy co-signer, who will be obligated to repay your loan in the event that you fail to make payments. If you decide to take out a private loan, the quality of your credit will play an important role in determining both your interest rate and your fees, so it’s important to make sure your credit rating is as good as possible. (See Good Credit Counts)
Many times, close family members, like grandparents, are both interested in helping fund a student’s education and in the position to be able to help. Be sure to check with all interested others about assisting with education costs.
Many students find that holding a part time job not only assists them with their college expenses, but also teaches them both work and time-management skills that serve them well upon graduation.
Loan fees should always be published up front for families to research ahead of time. Interest rates for private loans will vary between lenders and be contingent upon the creditworthiness of the borrowers, but will be disclosed upon actual application with a lender. Please consult with a certified financial planner or your tax preparer for larger implications on your finances. The website www.finaid.org/savings is also a great resource.
We’ve talked a lot about borrowing money. Now, let’s talk about repaying it.
When you take out a loan or a credit card, the world is watching. Banks, insurance providers, car dealerships, and other businesses are all interested in how you handle your money and pay your bills. How else would they know if you’re someone they can trust to pay them back?
If your credit is good, you’re a lot more likely to get the things you want – things like an apartment, a car, a credit card, and someday even a house. You’ll also get lower interest rates, which will save you a lot of money over time.
Whether you’re paying off your student loans or making payments on your credit cards, the keys to good credit are the same.
In order to make it easy for lenders to determine whether or not you’re trustworthy, the credit bureaus use the information on your credit reports to calculate a number that identifies your level of financial responsibility. Scores range from 300 (worst) to 850 (best).
Think bad credit isn’t a big deal? Think again. If you need to take out a Private Loan to help pay for your education (or buy a new car), and your credit is less than stellar, you’ll pay a higher interest rate and a whole lot more at the end of the day!
On a 10-year loan, the person with the 9% interest rate will have paid nearly $13,000 more in interest than the person with the 5% interest rate! Moral of the story? Think ahead and pay your bills on time!
Although on the face of it, it seems that college is expensive, we hope we’ve shown you that it’s worth every penny and then some. At Ashland University, we’re committed to helping you turn your dreams of an outstanding education into reality. Our Financial Aid Office is here to answer any questions you may still have about financial aid, scholarship opportunities, federal grants, and tuition payment plans.