Category: Finance

Steps to Funding Your Higher Education

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Introduction

College is a big step and it will take a lot to prepare, especially if you plan to move away from your parent’s house for the school year. Before you assume that you will receive enough help for your tuition, you should plan your higher education funding. By doing this, you will know how much money you have, how much you will receive, and how much you need. Let’s go ahead and take a look at the steps you should take.

Free Money is the Best Money

student in libraryFree money is the best money. We know you are in agreement with us on this one. Who wouldn’t want to receive money to go to school and not have to pay it back? If you are getting excited, you will be happy to know that you can receive free money too!

Grants and scholarships are known as aid and it is available to everyone as long as they qualify. Grants typically require you to have a financial need, but scholarships usually do not.

If you are awarded a grant or scholarship, you do NOT have to pay this money back and you can use it for your books, tuition, or other education-related expenses.

Scholarships are awarded all year long, but you must pay attention to the deadlines and requirements needed to apply. You do not want to apply for something you do not meet the minimum criteria for. You can apply for scholarships as early as your senior year in high school. Most scholarships can be found online, but do make sure to investigate the company to avoid a scam.

Grants usually require a financial need and to see if you qualify for one, you will need to fill out the FAFSA. Always fill it out by the deadline date to ensure you do receive funds, if you qualify.

Ask for Money from Friends and Family

Before you consider any other methods of funding, make sure you take a moment to ask your family and friends if they have any money to put toward your schooling. You may find that there is a college fund setup for you somewhere or you may not. It is important to ask though because you can use everything you receive to pay for school.

If you find out that there is no extra money for you to head off to college, consider asking everyone to provide you with some help for college instead of giving you gifts. For example, instead of new headphones for your birthday, ask for money to apply to school. You may even be able to setup a special account for the money to go into.

Apply for Federal Financial Aid

woman reading booksThe next step in the funding process is to check out your available options when it comes to loans. There are two types of loans – subsidized and unsubsidized. Subsidized loans have a financial need and are only available to students who demonstrate this need. Unsubsidized loans are available to all students and are not linked to a financial need for the money.

If you do not qualify for the subsidized version, you will likely still qualify for unsubsidized loans. Once you have filled out the FAFSA, you will have a better idea of the amount of money you can expect to receive. Often, this amount is in excess of what you need, but occasionally it may not be enough.

Unfortunately, you cannot negotiate and the maximum loan amount is what you receive. Of course, if you do not need all of the money being offered to you, then you can reject some of it.

Private Student Loans

Your last funding option is through private student loans. It is difficult to obtain these loans and most students need to have a co-signer. You will find that private student loans do not provide you with many benefits and you will have to start paying back the loan right away.

If you are trying to fund your higher education, make sure you explore all free money options first and wait to apply for a loan until you know you absolutely need it.

Tips for Managing Finances in College

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When it comes to college and money, they do not go together as well as you may think. In fact, many college students have trouble affording some of the things they need while they learn to better manage their finances and learn how to appropriately spend their money.

One of the best things you can do for yourself is make a plan for the future before you enter college. Below, we will go over some tips to help you better manage your finances in college.

Decide between Necessity and Want

piggy bank

There is a fine line between what you NEED to have and what you WANT to have. For purposes of being able to manage your finances in college, you need to decide what you NEED and not what you WANT.

For example, you need to pay for rent if you live off campus and you need to eat food. But, you do not need to eat out at the local restaurants every day and you do not need to go out to eat and drink with friends. You can easily spend $50 – $100 per week at the grocery store and have enough meals to keep yourself sufficiently fed.

Avoid Credit Cards

When you can, you should avoid credit cards. These pieces of plastic will get you into more debt that you can wrap your head around. In fact, it is not wise to use a credit card unless you have the money already in your checking account and can pay it back immediately.

Often times, people use credit cards to live outside of their means. What this means is that if you make $500 per month, but you spend $1,000 on your credit card, you are living outside of your means. You will quickly find yourself in a lot of debt and struggling to stay afloat.

Consider Other Alternatives for Your Textbooks

Textbooks are expensive. Did you know that you do not have to purchase your books through the bookstore? In fact, if you have the funds available, you can purchase the textbooks you need from anywhere you can find the books. It is possible to find your school books on sites such as eBay and Amazon for a lot cheaper than the school bookstore. You could save yourself hundreds of dollars per semester by purchasing your books elsewhere.

Minimize the Amount of Debt You Will Have

When it comes to debt, you do not want to have massive amounts when you graduate. The average amount of debt a student graduates with is $30,000 for a four-year degree. This is a lot of money and will be a lot more by the time the loan amount is paid down.

To help you minimwoman holding moneyize how much debt you take on, always consider alternative means to loans FIRST. For example, find out if you qualify for any grants or scholarships. Both of these options do not have to be paid back and can significantly cut down the amount you need to pay out of pocket for school.

Once you have exhausted grants and scholarships, you can look into student loans. One thing to keep in mind is that you do NOT have to borrow all of the money that is offered to you when it comes to your student loan. In fact, you can elect to borrow however much you want and you should only borrow what is required to pay for your classes and books. For example, if you are offered $8,000, but your classes will only cost $3,000, only borrow $3,000.

Set a Financial Limit for Yourself

When it comes to spending money, it is easy to overspend and you may find that you have minimal money left overcoins each month. To help combat this, you should set a spending limit for yourself each month. For example, do not necessarily place an amount on activities or food, but instead, give yourself a $100 or $200 spending limit for the month. You can use this money for whatever you want throughout the month and when it is gone, it is gone until the next month.

The tips above can help you better plan and manage your finances in college. Remember, the more you save now and the more you put toward your current debt, the less you have to worry about in the future.