A mom of six and a member of our FB community shares her advice on ways to pay for college. (Edited for clarity and flow.)
I’ve learned a lot about paying for college. Here’s what I know:
FAFSA Is for Everyone
Anytime after October 1 of your student’s senior year of high school, parents should file FAFSA to be eligible for Direct Federal Loans, and/or a Pell Grant. An EFC (Expected Family Contribution) number is created when you complete the FAFSA. Keep in mind that the EFC is just an estimate, and the amount you end up paying can vary from the actual EFC you receive.
The lower your EFC, the less you can theoretically afford to pay for college. And with a low enough EFC the student becomes eligible for a Pell Grant, which is additional money for college that does not need to be paid back.
Find a College with a Reasonable Net Price
This is my BIGGEST, FAVORITE tip: The “net price” is the amount that parents have left to pay after all institutional scholarships or need-based aid has been factored in.
Use a Net Price Calculator
Google the college you’re interested in, find their net price calculator, and input your information (usually your state of residence, grade point average, test scores, income, and savings). The calculator will estimate your net price.
It will look a lot like the award letter you would receive after being accepted.
Do this before you visit or even apply. Rule out schools you won’t be able to afford without staggering debt. The more questions the net price calculator asks, the more accurate the results will likely be.
Try to negotiate with your top choice colleges (after your student is accepted, but before they’re enrolled). Always ask for more scholarship money. Always ask. Really. Even if it’s already close to affordable with their initial offer.
The closer you get to May 1st (or decision day), the more generous a college that isn’t meeting their enrollment quota tends to be.
Try Private Scholarships
Apply for private scholarships. Just don’t expect a miracle here, it can be a lot of work for the low likelihood of getting even a few hundred dollars. If you’re lucky, you’ll receive a few thousand.
Applying for many private scholarships is usually NOT a means to bridging big gaps in affording college. Your efforts spent finding colleges with a closer-to-affordable net price in the first place will typically yield far greater dollar amounts.
Consider Other Sources
- Borrow against their 401k retirement savings.
- Take a second mortgage on their home.
- Accept the college-offered monthly payment plan–cash-flowing the amount due each semester. This means putting aside money on a regular basis from income. The most common income source is a paycheck, but rental income or child support (among other things) can be a steady income source as well.
- Put the amount due each semester (or their monthly payment plan amount) on a 0% interest credit card and use it to earn rewards points.
- Some (with the means) simply use their savings or 529.
- Sell stocks or assets to pay for college.
- Take out a Parent PLUS loan. These require careful research since they have high origination fees and high-interest rates.
- Take loans with private lenders offering somewhat better terms, such as potential co-signer release options, lower interest rates, or no origination fees. (Private loans for parents and students are available from banks, credit unions, and state agencies, with both fixed rates and variable rates. Generally, you can’t borrow more than your school’s total cost of attendance. Before applying for private loans, make sure you’ve applied for federal loans. There are differences between them in repayment terms, rates, and other features.)
- Review their household budget and try to trim expenses, such as: refinancing, cutting back on takeout, hair appointments, vacations, and reducing 401k contributions. These tactics can free up money for college, but again, it’s usually not going to be enough on its own for middle-class families. So don’t expect a miracle here.
- Pick up side gigs like driving for rideshare companies, delivering food or packages, starting a home-based business.
Lastly, Sometimes It Pays to Be Humble
Generous relatives or wealthier than you (at the moment) family members may also be able to help. For example, even though my family isn’t rich, when any of us have kids in college, if we let it be known that money is going to be tight for a semester–almost all of us will pitch in some amount. Most people only think of grandparents in moments of need, but second cousins once removed may be there for you as well.
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HOW TO PAY FOR COLLEGE
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