As someone planning for college, you may have paid attention to the news stories of soaring college tuition, over-inflated textbook prices, and worried students and parents accruing tens of thousands of dollars in loans. The numbers are certainly daunting, especially if you plan to attend a private school or to go on to a graduate or professional program.
Students have scores of options available to them to pay for school, some based on need and others on merit. These options are available from a variety of agencies from colleges to philanthropic organizations to the government. When looking at how you will pay for your education, it is important to study your options and to pursue them wisely.
First, there are scholarships, given out mainly by colleges and philanthropic organizations, covering either a set amount, such as $3,000 a year, or a percentage of your tuition, like the coveted full-tuition scholarship. Generally based on your work as a student or your SAT score (PSAT for National Merit Scholarships), scholarships are perhaps the best means of paying for college, as they essentially provide free money for your education. Unlike other sources of financial aid, you never have to repay scholarships. You may have to maintain a certain GPA in order to retain your scholarship from year to year. This could be a boon to you, providing marvelous motivation to go the extra mile during finals week.
Next are grants, which also are funds for your tuition that never need to be repaid. While these can be merit-based, grants are often based on a student’s financial need or other factors, such as race or ethnicity. In addition, you may not have to maintain a certain GPA in order for your grants to renew from year to year. Philanthropic organizations that give out grants often look at whether a student supports the goals of that organization, meaning that applications for these grants often require essays. The more money you can get from scholarships and grants, the better off you will be paying for your college degree.
Finally, there are the student loans. Like scholarships and grants, you can receive student loans from a number of sources; however, rather than schools or outside organizations, these are most often obtained from banks and the government, usually through federal agencies like Sallie Mae. Like all loans, you must repay these on a set schedule, with interest to boot. This means that, in addition to eventually paying the cumbersome cost of college, you have to pay the interest as well. However, unlike normal loans, federal loans at least can be deferred so long as you are enrolled full-time at an accredited university. The good side of this is that you don’t have to worry about making payments until you are out of school with a job; the bad news is that some federal loans accrue interest even while they have been deferred. With that in mind, the fewer student loans you take out, the better off you will be once you have graduated.
So, to sum up, scholarships and grants are a college student’s best option for paying for college, as they are free money given to you for your education. They can pay either a set amount each time you receive them, or they could cover a percentage of your tuition, meaning that as tuition increases, the amount they pay does as well. Your best bet for being in the running for scholarships is to score high on the SAT/PSAT’s or the ACT, rack up a healthy GPA, and build a strong resume by engaging in community activities (read our blog about volunteering here) and garnering leadership experience in the process. Of course, we must remember that having a college degree actually makes all the financial concerns worthwhile, with some studies estimating that degree holders earn upwards of $1 million more in their lifetimes than their counterparts without degrees do.
Toni Whalen (SAT/ACT Instructor)