The rising cost of college is one of the most critical financial concerns that both parents and college students face today. The average annual cost for an in-state, public four-year college is $20,770 (total tuition, fees, room and board charges). If the student would like to attend college out-of-state or at a private college or university, that average may balloon to over $46,000 annually.
Though tuition and housing are the biggest expenses when heading off to college, it’s important to remember those smaller expenses that also add up; including books, travel (especially if attending college out-of-state), transportation, clothing, and more. When adding college expenses to your already long list of other financial responsibilities, you may find yourself questioning how you can afford to pay for a college education.
As you prepare to send your student off to school and you check the essentials off every list, don’t forget to research the various ways to pay for this life-changing journey.
Consider some of the following ways to pay for school—and those additional expenses:
- Ask the college for help: Surprisingly, you may be able to barter over the sticker price of college. Students can write a professional, formal appeal letter to the college and then follow-up with the financial aid department. The letter should explain the financial situation of the party involved in paying for their education and any financial circumstances that may have changed since filling out the Free Application for Federal Student Aid (FAFSA).
- Work-Study jobs: Work-study jobs are part-time jobs, typically on campus, for eligible students. Undergraduate students earn hourly wages while working these jobs, however, the amount earned can’t exceed what was awarded to the student for the year. If your student doesn’t qualify for work-study, a regular part-time job may be a great opportunity to alleviate some financial stress.
- Apply for scholarships and grants: Private scholarships from various companies, non-profits, local community, and church groups are plentiful and many times can be awarded by semester, so if scholarships passed you by during the traditional back-to-school blitz, you haven’t missed out entirely. Grants are also a great option as they don’t have to be paid back. Colleges and universities, states, and the federal government award grants determined by income reported on your FAFSA.
In addition to these options, homeowners may also tap into their home equity to lessen the blow of the college price tag. Using a home equity line of credit (HELOC) or home equity loan provides some unique advantages to help pay for college.
- In some cases, a home equity loan may be easier and faster to obtain – especially if you already have an existing line of credit.
- The lack of restrictions imposed on a home equity loan compared to that of federal loans benefits homeowners and students alike. The U.S. Department of Education imposes annual loan caps, which may not give your student adequate funds or borrowing power.
- Home equity loans are typically more affordable than other loans.
A Home Equity Term Loan from First Bank allows you to use the equity in your home to finance a major one-time expense, such as a home remodel, vacation, or even paying for college tuition. Unlike a Home Equity Line of Credit, a Home Equity Loan is borrowing a set amount of money and paying it back in equal monthly amounts. As your student prepares to take that first big step on to campus, remember First Bank can help on the path of their financial future.
Source: College Board, 2017.