The time you spend in college is one of the most adventurous and fun-filled part of your life. You get to explore more of everything, learn new things and make new friends. But while college life is always exciting, it is always highly expensive as well.
Whether you are currently a college student or are a high school student who has started looking for the best college to study in, you would know that financing your academics can be a daunting task.
According to the College Board, funding a college requires around 35,000 at least. And this is just the tuition fees for a single year!
Opting for a public college may decrease this cost to about $10,000 or so, but that is excluding several other expenses. Consider factors such as the cost for books, stationery supplies, housing, meals, transportation and other personal expenses, and the total can exceed your wildest guess.
Therefore, before you start sending out college applications, take this two-minute, simple yet informative crash course in college savings and finances.
Everyone has the right to education, so the federal government offers loan to help students pay for college. There are different types of federal aid available, but you have to meet certain requirements to be eligible for it.
Direct subsidized loans
These are given to students on a need basis. The interest rate on these loans is usually about 4% and the government pays the interest while you are in college. Also, the rate is fixed, but the amount you can borrow increases as you progress through college.
Direct unsubsidized loans
These are not need based. The interest rate is fixed, but the amount you can borrow is greater than the direct subsidized loans. The total amount you can borrow will depend on the college you are studying in or applying to. You can choose to pay the interest while in college or add it to the amount to be repaid later.
Direct PLUS loans
These are also not need based, but the interest rate is relatively higher (6.84%). These loans allow your parents to borrow the cost, or you can apply for these even if you have graduated already.
If the aid given by the government is still not sufficient for you, then you can also use private options to fund your college studies. These are issued by a bank or other financial institutions.
These are some more options that you can choose from.
Tuition payment loans
These loans split the annual college bill into monthly payments so that you don’t face the burden of paying a large amount at the beginning of a semester.
Home equity loans
The equity from a mortgaged house can be used by a borrower to pay the bills on your behalf. However, it goes without saying that it is a dangerous option as your house is at risk if you fail to repay the loan.
So, research well to evaluate which option will work best for you. Making an informed decision about the finances means you can focus properly on your studies and have a truly enjoyable college life