After you exhaust other financial aid and employment opportunities, student loans can be a good option to cover educational expenses. When borrowing, remember that unlike grants or scholarships, which do not need to be repaid, student loans must be repaid with interest. You should always be 100 percent clear about what you are signing up for.
Myth #1: I don’t need to worry about my student loans while I’m in school.
Truth #1: You need to think ahead. Don’t blindly take out student loans without considering your major or future career—or without finding ways to minimize your debt while in school.
Myth #2: I should borrow as much as I can.
Truth #2: You should borrow the minimum you need. Loans are a helpful way to get an education that might seem out of reach, but be informed before you borrow. Your future self will thank you!
Myth #3: I have to pay back 100 percent of my student loans.
Truth #3: Maybe not. Depending on the type of loan and your profession, forgiveness programs can help you pay back a portion or all of your student loans.
Myth #4: I need to pay someone to help me with my student loans.
Truth #4: You should never have to pay someone to help you with your student loans. Contact the financial aid office at your college for assistance.
Find more information about student loans here.
Textbook costs can make your jaw drop. They can be one of the pricier extra expenses that go along with attending college. But these tips can save you hundreds of dollars every semester:
- Don’t buy new textbooks. If you can, always go for used. Glossy new pages might be pretty, but you won’t be able to resell a book for its full price. You can purchase used textbooks from Amazon and other internet sites, through your college bookstore and from classmates. See if there’s a social media page where fellow students sell books.
- Use an older edition. If your instructor assigns a brand new text book, ask if it’s OK to use an older edition. Editions typically don’t change much year to year, so you can probably get away with an older, cheaper one.
- Look beyond the bookstore. College bookstores might not have the best prices. Some offer used books and rentals, but it’s still important to check prices elsewhere.
- Rent your textbooks. Many campus bookstores, along with websites like Chegg, offer rentals. This is often a good option because you can pay less and you don’t have to worry about trying to sell the book after the semester. However, you should still look at all your options on a case-by-case basis.
- Ask previous students. Ask someone who’s taken the same course if you really need the book or if they’d sell you their old book.
- Use e-books. Some textbooks are available for a lower price in an online edition. If you don’t have an e-reader, you can usually read e-books on your laptop, iPad or smartphone.
- Share with a classmate. If your schedules allow or you don’t expect to need the textbook frequently, split the cost of a textbook with a classmate. You can meet up for study sessions, or one person can take photos or make copies. You can’t make copies of an entire book without violating copyright laws, but a few pages here and there is fine. If your instructor wants you to buy an entire textbook but assigns only a few pages of reading from it the whole semester, you’re probably not violating copyright laws by making a single copy of those pages for your homework.
- Check the library. Your school probably has limited copies of frequently used class textbooks. See if you can reserve them ahead of time and save some money.
- Wait until the first class to buy. Sometimes professors will work with students who can’t afford to pay hundreds for a single textbook. Some will tell you right away that you’ll only use a few sections of the textbook, or they’ll offer supplementary options that are free or cheap. The first day is usually spent going over the syllabus, but be prepared to buy the textbook quickly if you need to.
Some students take a year between high school and college to work, volunteer, travel or save money. Many educators say that kids who take a break after high school are more mature when they arrive at college and are more engaged in their education moving forward. This is particularly relevant to students who burned out in high school from years of AP classes, test prep, volunteer projects, sports, music lessons and other extracurricular activities.
Still, gap years can be scary for parents and other adults who care about a student’s success. Many fear that one year will turn into two years and will eventually lead to their student never completing a degree.
When considering a gap year, students should take these three steps:
- Apply to college and defer enrollment. That way, there is something waiting for you at the end of your gap year. Some colleges also might let you defer their scholarships—check with the financial aid office.
- Make sure you apply for financial aid during your gap year. File your FAFSA, apply for scholarships, grants and loans, etc. Remember, you can file your FAFSA starting on October 1 and the earlier you submit it, the better.
- Form a concrete plan. Studies show that students who have a concrete plan are much more likely to start college after their gap year. Ask yourself: What will you accomplish during the gap year? Sitting on the couch playing video games doesn’t count. Will you have a job? How will you pay your bills/save money? Will you volunteer? Will you do an apprenticeship or study abroad?
You can find more information from the American Gap Association, gapyearassociation.org.
By now, students and families with an eye toward college, or any kind of education beyond high school, should have a pretty good understanding of just how important the Free Application for Federal Student Aid (FAFSA) is to helping them achieve their goals. If not, here’s a good place to get started with the FAFSA.
Filing the FAFSA is crucial to getting money for school. But what happens after submitting the FAFSA? Here are some things for families to look out for, as well as some things to remember when dealing with information
Student Aid Report
After completing the FAFSA, the U.S. Department of Education will process the data and compile the Student Aid Report (SAR). The SAR will be sent to families and the colleges selected during the FAFSA. If an email address was provided during the application, instructions to access an online copy of the SAR will be emailed; otherwise it will arrive snail mail.
Typically, applicants can access their SAR within three to five days if the FAFSA was filed electronically (approximately three weeks if filed by paper). The SAR contains the Expected Family Contribution (EFC) as well as initial information about Pell Grant eligibility. Colleges and universities use the EFC to determine student eligibility for federal grants, loans, work-study and other financial aid programs.
How is the Expected Family Contribution Calculated?
Variables that determine a student’s EFC include income and net worth for the student and parents, family size, age of older parent, state and federal taxes and number of family members attending college. As a result, the EFC might change from year to year when the FAFSA is refiled.
Understanding Financial Need vs. College Costs
Each college or university listed on a student’s FAFSA application that accepts that student will determine financial need and present the applicant with an award letter describing the aid offered. “Financial Need” is determined by calculating the Cost of Attendance (COA) minus the EFC determined through the FAFSA.
The EFC will remain the same in a given year (unless an unusual family situation arises) regardless of which college or university the student attends. The amount of aid received cannot exceed the total cost of attendance at a college or university.
Each award letter will include federal, state and college-specific financial aid programs. It is likely that a student’s award letter will include one or more types of loans. These letters often don’t cleanly show which funds offered are scholarship or grant aid (free money) and which are loans (money which must be repaid). To get some tips on understanding award letters, check out our video series here and here.
The Free Application for Federal Student Aid (FAFSA) is a key part of college financial aid. While many families might think that the FAFSA is only for lower-income households, the truth is that the application helps make federal, state and school funds available for all students, regardless of their family’s income.
Here are some reasons to complete the FAFSA:
- To qualify for a variety scholarships and grants. Many federal and state scholarships (including those in Iowa) require a completed FAFSA for consideration, even when those scholarships and grants do not consider family income. FAFSA information can also impact the financial aid offered by schools in terms of grants or other awards.
- Some financial aid opportunities are available on a limited basis. Completing the FAFSA as soon as possible gives students the best chance for receiving those aid amounts.
- Completing the FAFSA earlier gives students the time to focus on other parts of college preparation, such as completing college applications, focusing on coursework and applying for scholarships.
- When students have completed their FAFSA, schools can more easily provide estimated financial aid offers sooner. This makes comparing colleges much easier, as students will have a better idea of what their education will actually cost them at each school to which they are accepted.
Sure, college can seem daunting. The idea of four more years of school (more for a graduate degree), being away from family and dealing with the cost of your education for years after graduation. It’s enough to make you ask why you should even bother with college if you can get a job right after high school.
Iowa College Aid’s “Your Course to College” guide offers a great deal of information and tips for students preparing, applying and succeeding in college. But perhaps the best tip of all (which is why it’s right up front in the guide), is showing why college is important in the first place.
A strong career and a bright future can be possible for all Iowans. When college is added to the mix, studies have shown that things can get stronger and brighter for those with a degree. Here are four (and maybe even a few more) reasons why a college education can make a difference in your life:
College graduates simply earn more. Weekly earnings for workers with bachelor’s degrees are almost twice the earnings of workers with only high school diplomas. Over a lifetime, this can translate to a difference of more than a million dollars, and the gap is getting wider.
You’re more likely to land a job if you go to college. The unemployment rate for college graduates is about half the unemployment rate for high school graduates. The number of jobs for college graduates is growing, while the number of jobs for high school graduates is falling. More than 95% of the jobs created from 2010 to 2016 required at least some college education.
Maybe you’ll never need to solve a differential equation or quote Shakespeare, but higher education will still serve you well. College teaches critical thinking, communications and problem-solving skills. A recent survey found that employers consider these skills more important than a potential hire’s subject of study.
Quality of life
In terms of finances, health and happiness, college graduates do better. The poverty rate for people with only a high school degree is nearly three times the poverty rate for people with bachelor’s degrees. College graduates are less likely to smoke, be obese or be incarcerated. College graduates are also significantly more likely to be happy with their standard of living.
Those are the biggies. But there’s so much more that college offers students that make for a fuller and more fulfilling career and life:
- Meet people from different backgrounds and cultures
- Discover your passion
- Try new things
- Learn new skills
- Build your confidence
- Get involved in clubs and activities
- Make your own decisions
- Learn more about yourself
- Challenge yourself and prove you can succeed
- Start a tradition
- Make your family proud
Keep these things in mind when you find yourself struggling with the more frustrating parts of preparing for college and remember: the more you put into your education, the greater the reward. You can get there, you can afford it and you can succeed.
For families and high school students, having a good gameplan for getting to, paying for and succeeding in college is valuable. That’s why we’re here to help.
Iowa College Aid’s annual “Your Course to College” guide will ship to schools and families later this month, but we’re taking the opportunity to preview some highlights and some of our favorite tips found in the guide. This week, tips to finding the best sources of funding for your college education. To find more previews and sign up to receive your copy of “Your Course to College” in print or download, visit our “Your Course to College” page at IowaCollegeAid.gov.
There are many ways to pay for a college education, and the financial aid process is not as complicated as most people think. Most students attending Iowa colleges and universities receive some form of financial assistance.
After you submit your college applications, complete these four steps:
1. Submit the FAFSA
To qualify for most financial aid, you must complete and submit the Free Application for Federal Student Aid (FAFSA). The fastest and most accurate way to apply is online at fafsa.gov. The FAFSA will gather information about your finances, your family’s finances and your college plans. You can complete the FAFSA for 2018-19 beginning October 1, 2017, using 2016 tax information.
2. Submit the Iowa Financial Aid Application
The Iowa Financial Aid Application allows you to apply for multiple state-administered aid programs with one application. Click the Iowa Financial Aid Application button at IowaCollegeAid.gov.
3. Decide on a College and Accept Aid
All colleges that you list on your FAFSA will send you a financial aid award letter if you are offered admission. Award letters will describe the financial aid package each college can offer. When comparing aid packages, consider how much assistance is from scholarships and grants (which do not have to be repaid) and how much is from loans (which must be repaid).
To accept the financial aid package offered by a college or university, follow all instructions. This might involve entering aid amounts you intend to accept in an online form or signing and returning a paper award letter by a specified deadline. Talk to the financial aid office at the college or university if an unusual circumstance delays your response.
To officially accept a college admissions offer and reserve your place, submit your deposit by the college’s reply date. May 1 is the date for most colleges.
4. Apply for Scholarships
Continue seeking and applying for outside scholarships. Think of it as a part-time job. If you spend 20 hours on scholarship applications and receive one worth $1,000, you just made $50 an hour for your efforts!
Reputable education organizations will NOT charge for scholarship searches.