Students have a lot to deal with as they prepare for college and figure out how to pay for their education. But what about once they get to school? Financial aid can help pay for the cost of school, but covering that distance between direct costs (tuition and school fees) and indirect costs (food, books… and just about everything else) is often the first chance for students to explore what it’s like to live with the same financial pressures as an adult.
Having a good game plan is important either planning for college or dealing with creating a budget and financial goals during (and after) college. Here are some tips to help students develop positive habits with money both now and throughout their life:
- Make a budget. Commit to creating a monthly budget AND live within your budget each month.
- Utilize a calendar. A calendar is not just for plotting your class schedule, campus organizational meetings, and social events. A calendar can be an effective tool for managing the due dates for your monthly bills—rent, cell phone bill, car payment, utility bill, etc. Making note of due dates helps to ensure that you will not miss a payment and potentially harm your credit history.
- Shop around for text books. Many bookstores, as well as online retailers, offer used textbooks for much cheaper than buying a “new” textbook. If you won’t want to keep your textbook for future reference after a class has concluded, consider renting a textbook for the semester.
- File the FAFSA on-time, every year. If you plan on attending college in the upcoming school year, be sure to file your Free Application for Federal Student Aid (FAFSA) prior to your college’s priority deadline. Doing so will ensure you are considered for all financial aid opportunities the school has to offer.
- Get a part-time job. A part-time job can allow you to meet your basic needs, as well as reducing the amount of student loans you need to borrow. Working 15 hours per week at a part-time job can dramatically reduce your need for student loans to cover living expenses. Additionally, most colleges have numerous on-campus employment opportunities for students.
- Plan early for a summer internship. During the first week of the spring semester, visit your college’s career placement office and discuss your desire for an internship during the upcoming summer with a career advisor. Career advisors can provide information about companies looking for interns, as well as information regarding career fairs on campus. Many internships pay a stipend or salary which can help pay for expenses while you’re in college and can lead to a job after graduation.
- Know your financial aid options. Visit the Financial Aid office on your campus during the first three weeks of the spring semester to discuss your current year’s financial aid and to check into scholarships and grants available for next year.
- Be a savvy shopper. At the grocery store, opt for the store-brand product. It is often significantly cheaper than its name-brand counterpart, and the money you save can be used to pay interest on your student loans or keep you from having to borrow more loans next year.
- Protect your Personal Information. If you aren’t already, start safeguarding your Social Security Number, credit card and bank account numbers, along with any other non-public personal information. Shredding sensitive information will ensure it doesn’t fall into the wrong hands and can help protect you from identity theft.
- Separate Needs from Wants. Although it may seem like you need that morning latte from the local coffee house to start your day; at $3.50 per day, that adds up to $1,277.50 per year! Make your financial choices based on what is necessary to meet your basic needs, and avoid wasting money and borrowing more to satisfy your wants.
Keeping these 10 tips in mind can be difficult. But by doing even a few of these, students set themselves up for a financially fit future.
Video: Identify, Separate Loans From Grants on Award Letters to Better Understand Out-Of-Pocket Costs
Getting accepted into college is an exciting moment for students and families who are ready to embark on the next part of their educational journey, but can often be offset by concerns about just how much school will cost both now and after graduation.
Financial aid award letters help students and families get a better understanding of what to expect both in terms of money being provided by the school and state, through scholarships and grants, and costs of attendance (COA) at the school.
In part two of our “Understanding Your Financial Aid Award Letter” video series, we discuss how to best identify repayable financial aid options and separate them from scholarships and grants to get a better picture of the actual financial responsibility that will be required to attend a school.
More often than not, there is a gap between the “free” money being offered to a student and the COA, leaving families to determine the best way to meet the financial requirements.
On many letters, both federal and private loans are included as possible options to bridge that gap. However, as there is currently no standard format for schools to consistently show financial aid options, loan amounts are often included in the same area as scholarships or grants. At a quick glance, families might not realize that loans, which must be repaid after graduation, are being included with the “free” money of grants and scholarships.
For more tips, advice and information for preparing for college, check out Iowa College Aid’s “Your Course to College,” a free downloadable guide for students, families and schools available at https://www.iowacollegeaid.gov/YourCourse
Getting accepted to the college or university of their dreams is the culmination of a years-long effort. But receiving an acceptance letter isn’t the end of the journey, just the start of the next one.
For many families, the excitement of being accepted into a school is often soon replaced by concerns of how to pay for that education. Even those families who have put together a strong financial plan for college may not have a clear picture of what school will cost when their student leaves home.
The financial aid award letter is a document sent to families by the school shortly after the acceptance letter, if not included as part of the acceptance package. The award letter includes cost of attendance and other estimated costs, as well as any scholarships, grants and other funds to help pay for a student’s education.
As there is no standard format for presenting information on the financial aid award letter, families might have a difficult time comparing the actual costs of one school versus another, let alone clearly understand their financial responsibility to their student’s education.
In our new two-part video, we look at the elements of a financial aid award letter and offer tips to families for understanding the true cost of a college education. By following these tips, families can better compare schools and ask the questions of financial aid officers to make the best financial decision for their student’s education.
It’s that time of year when mailboxes fill up for high school seniors anxious to start their college careers. College acceptance letters are a fantastic reward and validation for years of focus and hard work for students ready to move on to the next phase of their life. But what about those other moments when a student must deal with not being accepted to the school of their dreams? Here are some tips to dealing with what could otherwise be a real downer:
It is okay to be disappointed, but don’t blame yourself. If a student doesn’t get into their first-choice school, it might hurt. Take the time to let feel disappointed, be it an hour, a day or a week. But don’t let the negative feelings linger. Often, not getting an offer to enroll at a school has little to do with an individual student. While their GPA and test scores may have been good enough, the increasing numbers of changing factors that admissions officers have to consider (from an increased number of early decision and early action applications, geographical balance issues and more) can put applicants unfairly in the crosshairs. Add in the ever-growing importance of college rankings that reward schools for the number of students they reject, while punishing the same schools for students that turn down acceptance offers, and a student might feel that schools are looking for reasons to say “no.”
Focus on what’s to come, not what might’ve been. If a student has applied to more than one school, it’s likely they will receive an acceptance offer from another school. Instead of dwelling on the schools that didn’t feel they were the right fit, students should focus on, and get excited about, those schools that see them as a great partner in learning.
Know that college is more about what one does than where one goes. While there are schools with names that will open doors after graduation on reputation alone, no school defines a student. More than just attending a school, college is about what a student does once they get there. Regardless of the school they attend, students should keep an eye on using the opportunity to discover their strengths, passions and develop the skills that will give them a rewarding, life-long career.
The college admissions process is technical, complicated and ever-changing. No matter where the college decision process takes a student, they should always remember that the opportunity to continue and develop their education is a rare and unique opportunity, no matter where they go to school.
As students start to think about the next step in their education, they might hear the phrase “college fit” when exploring schools. College fit is the idea that students do better at schools that are best in tune with their academic, philosophical and personal needs.
While the idea of college fit might sound like it comes with a number of things to consider, one of the easiest ways to start tackling the idea of finding a school that works for you is to ask a simple question: What IS college?
While it might seem basic, taking the time to get to know the difference between different schools, including their affiliations, missions and more can help students make subtle, and often important, decisions in choosing the school that fits them best.
When students are deciding on a college or university, the school’s mission might not be the first consideration, but it is something to consider. It can impact a school’s size, cost of tuition, campus climate and more. In short, it can influence the entire student experience.
Here are some categories of schools and what to expect when attending:
Community colleges are usually publicly-funded, two-year institutions with mission statements reflecting their service to the needs of surrounding region. As a result, access is important to community colleges, welcoming all students and offering low-cost tuition. While community college students can graduate with a technical or vocational associate’s degrees, many students use the two years of community college as a starting point before transferring to a four-year institution to complete a bachelor’s degree. Because of that, most community colleges have “articulation agreements” with colleges and universities that guarantee a student’s community college coursework will be accepted for credit at the four-year institution.
Major research universities
Large institutions (either private or public) where research comes first will be called universities. As a result of the interest in research, these schools often have a portion of their faculty members ho are purely “research faculty,” meaning that they teach minimally (and then only advanced graduate students) or not at all. Their work is focused on the generation of new knowledge, often in conjunction with lucrative grants from external sources.
Putting research first doesn’t leave undergraduates at a disadvantage, though. Large institutions may have larger classes, but typically break into small discussion groups to help personalize learning. Academic departments will work closely to reach out to their undergraduate students and communities form in residence halls and through campus clubs to create a breadth of opportunities to students.
Liberal arts colleges
Often promoted as an alternative to large research universities, liberal arts colleges are usually private institutions that focus on a more individualized approach to learning and building relationships in smaller-sized classes. As a result of this focus on the personal experience, these schools tend to prioritize teaching over research. Students are likely to find smaller classes taught by full-time faculty and not graduate assistants.
The focus away from research doesn’t mean that faculty at these types of schools are any less well-qualified than those at larger institutions. Rather, it is more of a philosophical reflection of the teaching vs. research divide between the two types of schools.
As the name would suggest, these institutions (virtually all privately-held) emphasize faith development in addition to educational achievement. These types of institutions range from small Bible colleges to nationally known Jesuit institutions like Georgetown University. For those students who are looking for an education that develops them both academically and spiritually, these types of colleges and universities offer an experience often specifically tailored to their religion.
While the national conversation around the importance of continuing education past high school gains much attention, so to does the issues surrounding paying for it. Regardless of politics, the fact remains that paying for college stands as one of the biggest challenges for students and their families.
Getting a head-start on putting together a financial plan is always a good idea for any prospective student. Here are some tips for families to consider now to ensure that they limit the amount of student loan debt accrued while still in school:
Borrow only the amount you need
Many borrowers make the mistake of taking out more loans than necessary. To avoid doing this, create a budget to determine how much loan money will be needed and avoid using loan money to pay for unnecessary expenses, such as trips to the movie theater or expensive dinners.
Consider a part-time job
If a student’s academic schedule allows, they should consider finding a part-time job on campus to help supplement the cost of unexpected expenses. Be sure to check with the financial aid office to see if students qualify for work study, which gives the opportunity to work on campus.
Compare award letters
Once a student receives their financial aid award letter, compare loan offers by reading the fine print. If federal loans are not enough to cover the cost of education and a student is considering private loan offers, be sure to shop around for the best interest rates and repayment options.
Take college credit while in high school
Taking AP, dual credit or college credit courses while in high school can give students a head start on achieving your intended major. Find out the general education requirements at the college a student plans to attend and take courses that will fulfill those requirements. Doing this can help students graduate from college early, which means borrowing less in student loans.
Consider paying loan interest while still in school
Students who start making interest payments on their student loans while still in college will reduce the total amount they have to repay after graduation. Interest payments are usually manageable. By paying off interest as they go, students can keep outstanding interest from capitalizing on any balances. Allowing interest to capitalize increases loan balances essentially requiring students to pay interest on the interest that has been accrued!
Apply for scholarships
Scholarships can pay for portions or all of a student’s education during an academic year. But students can’t earn scholarships if they don’t apply! Find scholarships specific to a school or department by talking to a representative from the school’s financial aid office or department chair. In addition, the following sites are just a few places to check for scholarships:
- Fast Web – www.FastWeb.com
- Big Future by the College Board – https://bigfuture.collegeboard.org
- Sallie Mae Scholarship Search – www.salliemae.com/scholarships
- Scholarship America – https://scholarshipamerica.org/
Choose a school that fits into the family budget
Review the financial aid packages from the colleges where students applied and consider how much needs to be borrowed in order to attend each. Keep the goal in mind and select a college where loan debt can be kept at a reasonable level against future income potential.
Get more tips in Iowa College Aid’s “Path to College.”
They’ve waited. They’ve watched the mail for weeks. Finally, the letter arrived: Students are getting notice that they’ve been accepted to the school of their dreams! But after the moment of excitement and congratulations wears off , the realization sets in: it’s going to cost money to go to school.
Even if a family has prepared for years, saving money, investing in 529 plans and being on top of completing their student’s FAFSA, now is a crucial time to pay attention to information from schools and have a clear understanding of the financial aid award letter.
Financial aid award letters are sent to students in the weeks after receiving their acceptance letter to a school and reflects the cost of attendance as well as the financial options available to families to help pay for their student’s education. As the letters state, a student’s place in the schools incoming class cannot be reserved until a deposit is received based on the financial award letter. But families should take the time to understand their award letter before submitting any form of deposit, as these deposits are not refundable if a student decides not to attend a particular school.
Currently, there is no standard format for schools to report the financial aid being offered to a student. So families should use these tips to better understand what is being offered and make a smart comparison between what different schools will cost. The school with the lowest tuition fees might not always be the best financial choice thanks to financial aid awards. Knowing how to read the financial aid award letter can make all the difference.
- Find “free money”
Many schools offer students institutional scholarships or grants. These types of funding can be seen as “free money” because students and families don’t have to repay this money after graduation. Make sure to look for words such as “scholarship” or “grant” in the name of the financial award. These awards are often given to students based on the information in the Student Aid Report created when completing the FAFSA, based on income or family responsibility. Families may miss these awards because they do not technically apply for them separately.
- Consider loans and work study options separately
To help show families how they can meet the cost of attendance at their school, award letters will also include options that require repayable loans or other options that require further action by the student, such as work study programs. Since there is no standard format for separating these options from other “free money,” families need to recognize that any loans taken out, be they private or federal Stafford loans, will require repayment by either the student or parent (depending on the loan) after graduation. This is not funds being offered by the school, but money that will require repayment.
- Know the difference between “direct” and “indirect” costs.
Attending college features a variety of costs, but not all of them will necessarily be covered the financial aid offered in the award letter. The “cost of attendance” on a financial aid award letter applies to direct school costs, such as tuition, room and board. Indirect costs, such as books for classes or travel to and from school are not considered in an award letter. These costs are those that the student and family will have to bear personally.
- Determine if awards are for one year or more.
Many families fall into the trap of thinking that the financial award letter reflects the costs and awards for all four years of school when, in reality, the letter reflects the cost for one year of school. While many of the loans listed on an award letter will be available to students each year, many of the grants or scholarships listed may require a new application each year or, in some cases, are only available for one year. Determining which of these awards are renewable, or the length of the award, can help families avoid an unpleasant surprise.
- Make sure the award letter is final.
In some cases, an award letter might not reflect the final amount of aid being offered to a student. If any section of the letter uses words such as “estimated,” “tentative” or “pending,” the school may not have all the information from a student’s FAFSA or other document needed to make a final determination of aid. Once this information is provided, it may have an impact on the amount of aid that the student is finally offered.
Understanding the financial award letter that students receive can lead to some difficult decisions about where a student should go to school. By making the best effort to compare award letters from all schools that have accepted a student, families can make an informed choice of which school fits best with a student’s goals while creating a financial plan that will avoid any bad surprises or unexpected debt down the road.