A college education is an expensive business these days, with tuition costs often soaring way above inflation. Anyone considering pursuing a degree course should plan ahead as early as possible to take advantage of any scholarships which may be available as the preferred method of financing college. Scholarships are available for a myriad of things, some even bizarre, and it pays to start searching early to be in with a chance of obtaining one. Many are academically based but some are given for many different reasons. You may even find a scholarship available from the school you plan to attend.
When you are searching for scholarship details never fall for a scam which involves sending money; there are plenty of legitimate scholarships available without cost. Another excellent form of financing college is to search for grants which you may qualify for. Some are state based, college based or again available through searches.
If you plan college early enough you should concentrate on opening a bank account and establishing a credit history, perhaps through using a secured credit card with a parent as co-signer. If you work in the holidays start to save up for college days so that you will be less reliant on loans. Depending on your family circumstances your parents may be able to help with student finances though if their income is above a certain level they will be expected to contribute anyway. If you have any rich relatives now is the time to be nice to them.
The first step to applying for any student loans is to submit an FAFSA application which will give you access to Stafford loans and, if you are from a low income background, a federal Pell grant. Federal loans are the least expensive way of borrowing for college, and are not repayable until six months after graduation.
If you don’t qualify for a subsidized federal loan on which the government assumes the interest, you may still be eligible for funding through the unsubsidized Stafford loan, on which interest will accrue on a monthly basis unless you elect to pay it whilst at college. This is feasible if you can find a place on a work study federal program, which will bring you in an income as you study.
Your parents may choose to take out a federal PLUS loan to help with your education costs, if their credit rating qualifies them to obtain a loan. The loan would be your parents responsibility rather than your own, but PLUS loans are available at preferential fixed interest rates and work out cheaper than private student loans.
Private loans should only be considered as a last resort, when all over avenues of finance have been exhausted. They are more costly to service than federal loans, and are subject to the vagaries of a variable interest rate. If you have established your credit history in advance as suggested earlier, you may well qualify for a loan in your own right, but without a credit history no financial institution will advance a private loan without a co-signer.
Whichever route you take to obtain finance for college you should consider it a great responsibility and always be aware that whatever you borrow will need repaying with interest. If you plan ahead wisely you may well not need to borrow as much as you think.