Pay for college without saving
A survey by Fidelity found that 37% of high school parents haven’t started saving for their child’s college education. If you’re in this boat, higher education may seem out of reach, with a four-year degree costing an average of over $40,000 in tuition alone.
However, for those with no savings, a college degree is still accessible. By maximizing financial aid opportunities, pursuing alternative degree options, and working with your university, you could save thousands of dollars.
Paying for college in numbers
According to studies by College Board and Fidelity:
- In the 2020-2021 academic year, undergraduates and graduates received a combined total of $138.6 billion in grants.
- Institutional financial aid is on the rise, with $71.1 billion awarded to students in 2020-21.
- In 2020-21, grants accounted for 64% of total undergraduate college funding and 32% of total graduate college funding.
- Institutional grants increased by 62% between the 2010-2011 and 2020-2021 academic year.
- About 50% of high school parents expect their child to receive grants and scholarships, and 63% have started saving for their child’s college education.
- About half of students and parents expect to take on debt for college.
What are the alternatives to college?
Many students who don’t have savings opt for community college, which is significantly cheaper than traditional four-year options. The College Board found that the average cost of tuition and fees in 2021-22 is just $3,800 for community colleges, compared to $10,740 for state universities and $27,560 for colleges. out-of-state universities.
Online programs can also be an affordable option, as you won’t have to pay ancillary fees associated with on-campus amenities. Choosing a community college or online program, even for the early years of your degree, can buy you time to accumulate savings or cover more of your expenses through grants and scholarships. scholarships.
Many students also choose to delay their studies altogether, taking a gap year or two to work full-time and build a college fund. There is nothing wrong with this approach; Entering the workforce after high school can put you in a better financial position, and it could help you decide which career path and major you’d like to pursue.
Financial Security Schools
Students should apply to multiple schools, not just their first choice. When applying, diversify your application pool with “safe”, “moderate”, and “reach” schools. Safe schools are the institutions you can easily afford, moderate schools can put a bit of a strain on your finances, and reach schools are the ones that, without help, would not be financially viable.
A good rule of thumb is to apply for two to three schools in each category. Each school to which you are accepted will send you a personalized financial aid package showing the net cost after taking into account scholarships, grants, loans and work-study studies. From there, you can better judge which school you can afford.
While a security school may not be your first choice, it’s worth considering all options, especially if your college-specific savings aren’t accrued. Applying to multiple financial security schools ensures that if an unforeseen financial situation were to arise or you received less financial aid than expected, a college education would still be viable.
How to pay for college without saving money
Paying for school if you have no money saved will take a bit more work, but it is possible. Start with these tips to reduce your financial obligation.
Negotiate with your school
If you have not received as much financial aid as expected, you can negotiate with your school. For students who have recently undergone significant financial changes, appealing the decision to your school’s financial aid office is the first step. It is rare for an appeal for financial assistance to be approved; However, if you have experienced major financial upheaval such as divorce or medical bills since submitting the Free Application for Federal Student Aid (FAFSA), or if you have a large gap in your aid between two similar schools, you can have a case.
If you don’t meet the specifications for a call, contact the help desk to see what other options you have. You can apply for a tuition payment plan, which splits the cost of tuition into several installments, usually spread over a year.
Apply for scholarships and grants
Scholarships and grants are a way to put money in your pocket if you don’t have savings for education. Federal grants, like the Pell Grant and the Supplemental Federal Educational Opportunity Grant (FSEOG), are awarded to students who demonstrate financial need based on information submitted through the FAFSA. You can also benefit from state or institutional subsidies.
Fellowships are another common type of aid. Scholarships come in a variety of forms, from college scholarships that require essays and transcripts to extracurricular awards that may require video submissions or interviews.
Since many scholarships are from private organizations, you can use a scholarship search engine to filter through the thousands of offers and apply only to those you qualify for. You should also contact your financial aid office to see if there are any institutional scholarships that you can stack with private scholarships.
Request a work-study
Federal Work-Study is a needs-based program that provides students with part-time employment opportunities—usually on campus—to help reduce college tuition and fees. These jobs are affiliated with the university, are limited to 20 hours per week and pay at least minimum wage.
Work-study eligibility is based on factors such as your family size, income, and financial history. Like other forms of federal aid, work-study jobs are based on your FAFSA information; your school’s financial aid department will determine your eligibility.
Take out student loans
Student loans should be a last resort after using other financial aid, but many students borrow money for college. Students can choose between two categories: federal and private student loans.
Federal student loans are administered by the US Department of Education. Undergraduate students have access to two types: direct subsidized and direct unsubsidized. Subsidized loans are need-based and do not accrue interest until the end of the grace period, while unsubsidized loans accrue interest immediately. Neither loan type checks your credit, and both open the door to several unique repayment options and forgiveness opportunities.
Unlike federal student loans, private student loans from banks and credit unions can usually cover the full cost of your attendance, and they can be a cheaper option if you or your co-signer has good credit. But with strict eligibility requirements and fewer protections for borrowers, these loans are typically only explored after students have borrowed the maximum amount from the federal government.
Borrowing too much through student loans is a common mistake. by extending their loans, students risk high monthly payments after graduation and thousands of dollars in interest charges. As a general rule, borrow only what you need to cover academic costs after accounting for scholarships and grants, and maximize federal loans before applying for private.
As a student, there are several ways to cut costs. Room, board, and amenities costs can add thousands of dollars a year to your total cost of attendance, so living in a low-cost off-campus apartment or living with family or friends is a good way to cut those costs. monthly fee.
You can also apply to become a Resident Advisor (RA) in your second year. RAs are often high-achieving undergraduates who are responsible for the general safety and well-being of residents in on-campus housing. RAs are often room and board free and, depending on the school, may also receive a monthly stipend.
The bottom line
Don’t let the cost of education overshadow your desire for higher education. many funds are available in the form of grants, scholarships, work-study programs and student loans. If going to college is high on your priority list but you haven’t started saving, take advantage of every award, application, or opportunity to cut costs. You can also take a gap year or attend community college to start your education.