We know that the whole college picking/being accepted/paying-for-everything situation can and usually is quite stressful for the whole family. For parents, there’s “How will my child fit in? Will it be hard for him/her?” concern, and there’s one equally painful concern “How will we pay for all of this??” To help you out, we’ve created this guide of 4 overlooked ways to pay for college. Whether you realize it or not, there are at least 4 usually overlooked financial aid programs that definitely won’t hurt getting some insight on and we are about to share them with you.
1. Paying for college before it actually starts
No, we are not talking about submitting the FAFSA or setting up the 529 plan, we are talking about starting to pay for college with payment plans that start as early as June for the upcoming college year. How do you benefit from this? Well, it’s simple, if you want to pay in parts not all at once, and you don’t want your monthly payments to be high, it only makes it logical that you start paying sooner rather than later, right? So, you will be kind of eyeballing the final amount before the final bill comes, but you can always adjust it at the end.
Therefore, it is important to get familiar with the college payment plans before your child even registers for the first class. This way, you will start the payment plan earlier and instead of, for example, paying for 8 months and have higher rates, you can extend the payment period to 10 or even 11 months, and pay less each month. This certainly helps the family budget, wouldn’t you agree?
2. Consider Work Study jobs
If your soon-to-be college student is work-study eligible and wants to work and study at the same time, maybe you should consider possible work-study jobs. The process of applying for a work-study job is the same as with any other job.
There should be a well-written resume (with a cover letter) so that the chances of a successful interview are higher. In the end, the employer is the one that chooses who qualifies for the work-study job and does the hiring through the referral process.
In addition, it’s a good idea to check the actual salary and the payment schedules and see if they pay once or twice a month or some other way. Knowing the monthly pay makes a huge difference in budget planning.
3. Outside Scholarships have to be reported
In case your future student has an outside scholarship, it needs to be reported to the financial aid office ASAP. Why? Well, colleges see outside scholarships as a form of income. Therefore, it can be considered as a reason to reduce the amount of need-based aid because of your lesser financial need.
However, what you need to do is check the rules in the college your child is applying for. Some colleges have a different set of rules and may consider your child as a need-based aid qualifier despite the outside scholarship.
Important: Not reporting the outside scholarship is NOT something you want to “forget” because the IRS will eventually catch up to you and you will end up paying much more than you planned for the whole college.
4. Apply for Loans
If you think about taking out a loan to pay for your child’s college, you should get into that as soon as possible. Why now? Well, EVERY federal loan can’t be done overnight. There’s the whole loan counseling, approval, and so on. It all takes time and you might miss the first step (in this guide) and pay higher rates due to a shorter payment plan.
On the other hand, if you want to skip the federal loans, whether because of the rates or the time you have to spend to get approved, there are other “I need cash now” solutions that are faster, and with better payment plans and terms.
Filed under: Life