Who Should Take Out Student Loans
Taking out a federal student loan is a way many young people can pay for college without needing a credit check. For most federal and private student loans, the student is the primary borrower.
You may need to cosign for your child to help them qualify for a private student loan, since those are based on credit. Cosigning may also help them get a lower interest rate. Being a cosigner means you are legally responsible for the loan if the borrower doesn’t make payments.
There are some instances where a parent can borrow money for their child’s education. For example, parents can apply for a Direct Parent PLUS loan, which allows them to take out a loan in their name to pay for their child’s college. To apply, the student must submit the FAFSA and then the parent completes the application for a Parent PLUS loan according to the school’s preferred process. Parent PLUS loan borrowers with an adverse credit history may need an endorser.
It’s important to note that parents who choose Parent PLUS loans are required to start paying back the loan once it is fully disbursed however, parents can request a deferment. This differs from other federal student loans where the repayment period typically begins six months after graduation.
Regardless of which option you choose, it’s important to know who is responsible for repaying the loan, as well as understand the interest rates, fees and repayment plans. Before deciding, compare student loan options to find the best fit for you.
Am I Eligible For Financial Aid
To receive federal student aid, you must:
Explore Grants Scholarships & Other Free Money
New York State offers a variety of grants and scholarships for residents who plan to attend in-state colleges:
- Tuition Assistance Program the states largest source of financial aid provides up to $5,665 per school year per eligible student
- Excelsior Scholarship covers the entire tuition for eligible CUNY and SUNY students
- Enhanced Tuition Awards offer up to $3,000 to eligible students attending private colleges
- STEM Incentive Program awards annual SUNY tuition to the top 10% of high school students who pursue a degree in science, technology, engineering or math
- See the complete list of free money options available
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Schools That Offer Generous Merit
If you’re a high-achieving student but don’t think you’ll qualify for much need-based aid based on your family’s finances, you should look into schools that offer generous merit scholarships. Schools with generous merit-based aid programs often offer scholarships to attract competitive students.
If you have a particular talent , or if you have high grades and test scores, you could be offered some pretty large scholarships. If you’re interested in a particular school, just google ” scholarships” to see what sort of aid they offer. You can also start by checking our list of schools with the best financial aid.
Find A Less Expensive School
Everyone has a dream school, or two, but those dreams tend to come with a higher price tag and rates.
While its great to go to some fancy private school if you can afford it, it makes a lot more sense to get a good education close to home that has lower rates associated with it.
Sometimes, you have to set the dream school aside and find a learning institution with a good program that youre interested in at a lower cost.
You will still get a great degree and you wont have to break the bank or take out as many student loans.
To Sum it All Up:
If you arent able to get a Pell Grant or other federal grants, there are ways to be able to afford to go to college such as going to a community college, taking a year off to work full-time, and even student loans. College doesnt have to be out of the question if you really want to go.
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Lost Eligibility How To Pay For College Without Financial Aid
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Choose An Affordable School
If you were to ask friends or neighbors the most important factor in choosing a school, youd get all kinds of answers, like the name recognition, the size of the dorms, or the success of the football program. But let me just break it down for you: When it comes to choosing a school, the only relevant factor is if you can pay for it without student loans.
At the end of the day, your top priority should be to find a school you can afford. This might mean adjusting your, or your childs, expectations about going to a certain dream school.
On the other hand, its totally possible that their dream school is still within reach if you can find enough scholarships, grants and other aid to make it happen debt-free. Im not here to discourage anyone from pursuing their dreams. My goal is to help you see that staying out of debt has to be your top priority. If its a choice between a full-ride at State U and a $50,000 loan to go to a private university, Im going to State U all day long.
Keep in mind that the traditional approach to college, where the student moves away to live on campus for four years, is not the only way to get an educationand its usually not the cheapest! Here are some alternatives:
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Start Living On A Budget
The bottom line on paying for college without student loans is that you have to make good financial choices. And that all begins with having a budget and sticking to it. Even if youre making minimum wage and living on Ramen noodles, a budget will help you make the most of every dollar. Free budgeting tools like Personal Capital can help you track exactly where your money is going and even keep tabs on your 529 account balance.
Is It Cheaper To Live On Campus Or Off
The Pros of Living on Campus While off-campus rents may be cheaper than the price of room and board at school in certain cases, rent rarely provides the range of services that a school offers. Another cost that living on campus eliminates is buying furniture. Every dorm room comes with at least a bed and a desk.
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Take Out Federal Student Loans
- Potential coverage: Up to your schools cost of attendance minus other financial aid
If you need to borrow money for school, federal student loans are generally a good place to start.
This is mainly because they come with federal student loan benefits and protections, such as access to income-driven repayment plans and student loan forgiveness programs. Youll need to fill out the FAFSA to apply for federal student loans.
Here are the main types of student loans you might be eligible for:
- Direct Subsidized Loans are available to undergraduate students with financial need. The government covers the interest on these loans while youre in school, leaving you with less to pay off after graduation.
- Direct Unsubsidized Loans are available to both undergraduate and graduate students, regardless of financial need. Unlike subsidized loans, unsubsidized loans will continue to accrue interest while youre in school.
- Direct PLUS Loans are available to both graduate students and parents paying for their childs education. Unlike other federal student loans, PLUS Loans require a credit check. They also generally come with higher interest rates compared to subsidized and unsubsidized loans.
Keep in mind:
Tuition Reimbursement From An Employer
While searching for a job, try to find one with a tuition reimbursement program. Many corporations like DaVita, Deloitte, and Qualcomm cover portions of their student employees tuition. Other companies offer policies based on specific universities. For example, Papa Johns gives employees the opportunity to take business classes, and other related courses, at Purdue University for free. There are also certain limitations for each program, such as being an employee for a few months, so be sure to do your research.
If you are currently employed, talk to your Human Resources department about tuition reimbursement. Some companies might cover a portion or half of tuition, while others could offer to cover the full pricethis will most likely happen if your job is related to your area of study.
If credit card debt is holding you back from saving effectively for your childrens college, we can help. Talk to a certified credit counselor for a free debt and budget analysis.
This content is based on accredited financial data gathered from reputable sources, such as government websites, credit bureaus, and nonprofit organizations. All articles are written by certified credit counselors and fact checked by certified financial experts.
Our team strives to provide educational content that fully informs readers of all their options as they relate to debt, credit and personal finance. Our goal is to give readers the information they need to make informed financial decisions on their own.
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Consider Filing A Financial Aid Suspension Appeal
If it looks like you wont be able to regain your financial aid eligibility right away, you could consider a financial aid suspension appeal.
A financial aid suspension appeal varies by school, but it generally requires students to make a formal appeal through the financial aid office.
At DePaul University in Chicago , for example, students who appeal financial aid suspension must provide a written appeal letter, create an action plan and meet with an academic advisor. As another example, students at the University of Texas at Austin must submit a personal statement, provide required documents and sign a financial aid academic plan.
Without financial aid eligibility, you wont have access to loans or aid to pay for college costs. This can create a circular problem, in which you need eligibility to afford to take more courses but cant regain eligibility without taking more courses.
The length of time it takes to regain eligibility depends on why you lost it. Youll need to decide what to do about college in the meantime. Do you need to stop attending because you cant afford it? Can you afford tuition if you go to school part-time? Once you know your educational costs, you can start looking into your options.
How To Talk To Your Parents About Applying For Financial Aid
If your parents can’t or won’t pay for college expenses, they may be wary about filling out a FAFSA or giving out financial information for need-based scholarships. It’s important to assure them that submitting a complete FAFSA with their financial information does not obligate them to help you pay for college. The FAFSA has nothing to do with your bills or college expenses…it’s simply an aid application.
Bottom line: if they refuse to help you with your FAFSA, they’re not protecting themselves. They’re just impeding you from qualifying for financial aid.
What if, though, they’re just overwhelmed by the process of completing and submitting a FAFSA?
If this is the case, you can let them know that the FAFSA only takes 2-3 hours to complete. You could even do it on your own if you have your family’s financial information handy:
- Social Security Numbers for you and your parents
- Alien Registration Numbers
- Recent federal tax returns, W-2s, and other records or income for both you and your parents
- Any records of untaxed income
The sooner you submit your FAFSA, the better, so don’t put off having these discussions with your parents or guardians!
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Dual Enrollment / Consortium Agreements
You cannot receive aid from two schools during the same term. If you are attending two schools during the same term, you must request all your aid from one school. That school is your “home” school. The other school is your “host” or “visited” school. If you will be transferring your host school credits back to your home school, your home school may be able to process your financial aid for the term, based on your combined enrollment at both schools. If AACC will be your home school, discuss your situation with our office before you submit any forms.
This process is only beneficial if you need us to count the host school credits to receive your aid. For example, assume you had 6 credits here and 3 credits at another school. If you had a Pell Grant, Pell awards are generally larger for 9 credits than 6. If you were only getting student loans, they only require 6 credits. So, if you already had 6 credits here, there would be no reason to complete the adjustment process. Dually enrolled students still must make tuition payment arrangements with the visited school because the visited school may not allow you to defer your payment to them.
Apply For Rotc Scholarships
Are you planning to join a Reserve Officer Training Corps program while in college? The Army, Air Force, and Navy all have scholarship opportunities, but the process is very competitive. The Army ROTC is one of the countrys largest scholarship providers, so its a great opportunity if youre already considering a career in the military.
You should know in advance that ROTC scholarships are not guaranteed just for being part of the program. Students who complete ROTC programs are commissioned into their specific branch of service after graduation.
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Take More Credits Per Term
If you are paying full-time tuition, most colleges do not differentiate between 12 credits and 21 credits. Check with the college of your choice to see if they charge a flat rate for full-time students.
If you want to reduce the expenses associated with your college degree, taking as many credits as possible is one of the best ways to graduate early without paying any extra money in tuition.
Apply For Grants And Scholarships
Grants and scholarships can make paying for college easier when you’re unable to qualify for federal student loans. Generally, scholarships and grants don’t need to be paid back so you aren’t incurring debt to pay for school.
Scholarship and grant programs can be need-based, meaning whether you qualify is based on your financial need. Or, they can be merit-based, meaning eligibility is based on your grades and overall academic performance. When applying for scholarships and grants, pay attention to application deadlines. And cast the net wide to include larger, more well-known awards alongside smaller scholarships and grants. If you aren’t sure where to look, your school’s financial aid office may be able to help get you started.
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Ways To Pay For College Without Financial Aid
Paying for college is expensive, especially if you dont qualify for financial aid. College tuition costs have risen steadily over the last twenty years at public and private schools. However, just because you dont qualify for financial aid, doesnt mean you cant get a college degree. Here are the nine ways you can cover your college costs and reach your education goals.