Paying For College – What You Need to Know

A college education can earn you much more than a diploma—the knowledge and skills you acquire can open doors and eyes to interesting and lucrative career opportunities, probably not otherwise possible. According to the U.S. Census Bureau, college graduates with a Bachelor’s degree earn nearly twice as much as high school graduates. Over the course of a lifetime, the difference in earning potential can easily exceed $1 million.

While a college education can be an excellent investment in your (or your child’s) future, it also can be one of the largest investments you’ll make in your lifetime. Fortunately, there are many opportunities for financial assistance – merit aid, scholarships, loans, grants, work-study — to make college more affordable and help you pay the bill.

Financial Aid Basics

More than half of college students receive some sort of assistance to help pay for college. Learning about the various types of financial aid – grants, scholarships, loans — is the first step to exploring your options.

Federal Programs – FAFSA

You may qualify for financial aid through the U.S. government. You should know about federal student aid programs such as: Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study (FWS), Perkins Loans, Federal Family Education Loan (FFEL), Stafford Loans, Federal PLUS Loans, Direct Loans and Direct PLUS Loans.

What is EFC and How to Estimate

EFC stands for Expected Family Contribution. That amount is determined by the agency or institution awarding the need-based financial aid—usually the government or individual colleges and universities – and is generally based on formulas. Find out more about EFC and how to estimate the calculation based on your family’s financial resources, income and particular situation.

College Sticker Price vs. Affordability

Before you cross a college off of your wish list due to “sticker shock”, understand that the real cost of college is the “net price” (list price minus the amount of financial aid) which may make the situation look a lot less dire. You can use “Compare Your Aid Award” tools to help you estimate actual college costs and do side-by-side comparisons of financial aid awards.

Scholarships & Merit Aid

Unlike need-based aid, which is based entirely on your family’s financial situation, merit aid awards are in recognition of your achievements and promise — academic, athletic, community, artistic, intellectual, extracurricular activities, etc. Merit aid – grants, scholarships and tuition discounts, awarded without regard to financial need – is available to students with wealthy families and those with modest means. According to the National Association of State Student Grant and Aid Programs’ (NASSGAP) 38th annual survey, merit aid comprised more than 25% of the $9.3 billion of state-funded aid during recent years. Billions more dollars of merit aid are awarded annually by colleges, universities, endowments and other groups. Learn more about merit aid and how to apply for it. You may be eligible even if you do not qualify for need-based financial aid.

The “Skinny” on Scholarships

Scholarships come from many sources such as colleges and universities, organizations, charities, businesses, schools, alumni clubs, religious groups, and individuals. Some scholarships are open to all applicants while others are based on certain criteria such as need, being a member of an organization or religious group, pursuing a certain course of study, place of residence, athletic or extra-curricular achievements or community service. Find out more about college scholarship opportunities.

Applying for Scholarships

After you find scholarships for which you may be eligible, contact the sponsors to request the applications. Review the applications carefully to determine if you are eligible to be considered and also if you have any reasonable chance of being selected. If you decide to apply, complete the applications carefully and send them in by the deadlines.

Beware of Scholarship Scams

Be on the lookout for mail or on-line solicitations from organizations with official-sounding names that can help you attain valuable scholarships – typically for a fee. Many of these companies are not legitimate. The U.S. Government FTC (Federal Trade Commissions) provides some good advice on spotting these phony operations.

Financial Assistance from the U.S. Military

If you are interested in military service, the U.S. armed forces may help you pay for your college education. The various branches of the armed forces offer government-sponsored financial aid programs. Some programs allow you to attend college full-time and then serve following graduation.

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