Paying for College
Your Guide to Paying for College
Frequently Asked Questions
How do you pay for college if you can’t afford it?
The most common way to pay for college when you cannot afford to pay for the entire cost of it is to apply for financial aid. In the form of grants, work-study, loans, and scholarships, financial aid can help make college or career school more affordable. These funds come from both the federal government, as well as your state, school, and private sources like nonprofit organizations. Most people are eligible for some form of financial aid from their chosen school, so it is worth it to fill out the FAFSA upon applying for college. Aside from aid, you may want to consider making a budget when arriving at school, choose a school that is less expensive, or getting a part-time job while on campus to help pay for college.
Does the military pay for college?
There are many financial benefits that come from being a member of the military. The U.S. Department of Defense’s Military Tuition Assistance program specifically gives active-duty, National Guard, and Reserve Component service members the chance to pursue higher education in their off-duty time. Eligible individuals can receive funds up to 100% of tuition and college-related fees. There are also service academies, such as West Point or the Naval Academy, that allow free attendance in return for commitment to service. However, these institutions are incredibly difficult to get into. Another option is joining a Reserve Officers’ Training Corps (ROTC) program, available at most campuses across the country thanks to the Air Force, Army, and Navy. ROTC programs offer college scholarships to eligible students who apply in high school (or apply while enrolled in college) for up to four years.
What are student loans?
If you apply for financial aid, you may be offered loans as part of the college or university’s financial aid offer. A student loan is money you borrow that must be paid back with interest that helps you pay for the costs associated with college, including tuition and room and board. There are many types of loans that have varying terms and conditions. The two general categories of student loans are federal, which are paid by the federal government, and private, which are sourced from banks, financial institutions, or other organizations. Generally, loans made by the federal government are considered to have more benefits than loans from banks or other private sources.
How do you pay for college without taking out student loans?
If you do not wish to take out a student loan, there are several other financial aid options you can consider. The first step is to fill out the FAFSA, which will make you eligible for financial aid to cover school expenses. Applying to scholarships can be a great way to receive some merit-based funding that does not have to be repaid. In addition to regularly researching and applying for scholarships, consider asking your college or university’s financial aid office about school-specific or department scholarships. Other ideas that may help with the cost of college include finding part-time work while on campus or setting up a payment plan.
Financial aid provides funding to help college students pay for higher education expenses such as books, tuition, fees, room and board, and supplies. It often takes the form of scholarships, grants, loans, and work-study programs.
A 529 college savings plan is an investment account that allows you to invest money for education. These investing plans have federal tax savings and various tax benefits depending on the state you live in.
Education loans are a specific type of loan used to pay for the costs of an academic program. Also called student loans, education loans are offered by the Department of Education and by private lenders. Only students and their parents or guardians can qualify for education loans.
An unsubsidized loan is a type of federal student loan that requires the recipient to pay interest on the loan as soon as it is funded. The student receives no grace period in which they can accept funds without paying interest.
A subsidized loan is one where the lender subsidizes or pays the interest. Subsidized federal student loans are the most common type of these loans, but subsidized home loans are also available.
Student debt is money you borrow to pay for college education costs such as tuition, books, and living expenses. For many borrowers, student debt is a necessary way to deal with increasing college costs. Student debt includes any loans you take out to pay for your college education, which you’ll repay with interest at a later date.
Income Share Agreement
An income share agreement (ISA) is a way to pay for a college education post-graduation through a percentage of salary earned rather than by using a traditional student loan.
A college grant is a form of financial aid that you don’t have to repay (in most cases). The government and other organizations offer grants to in-need college students to help them pay for higher education. However, to qualify, you must meet certain eligibility requirements.
A for-profit college is an educational institution operating as a business that expects to turn a profit by generating more revenue than it spends. Growing that profit and passing it on to owners and shareholders who have invested in the school is a central business aim.
The FAFSA—or Free Application for Federal Student Aid—is a form that current and prospective college students in the U.S. must fill out to determine their eligibility for student financial aid. The FAFSA opens on Oct. 1 for the following school year, and it is best to fill it out as early as possible.
“No-loan colleges" are academic institutions for higher learning that offer financial aid to their students without the expectation of being reimbursed—supporting enrollment through grants and scholarships, and without federal student loans. Such colleges make graduating without student loans a guarantee, rather than a remote possibility.
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U.S. Army. "ROTC Scholarship Helps Students Pay for College."
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Internal Revenue Service. "Topic No. 313 Qualified Tuition Programs (QTPs)."
Federal Student Aid. "Unsubsidized Loan."
Federal Student Aid. "(GENERAL-22-12) Income Share Agreements and Private Education Loan Requirements."
Federal Student Aid. "What Are the Deadlines for Filling Out the FAFSA Form?"