When deciding where and when to go to school, the question of how to pay for your tuition, books and living expenses is a major consideration. Education is one of the biggest expenses of a lifetime, but it is important to remember that it is an investment in yourself and your future. Many people choose not to go to school, because they do not believe they can afford it; however, there any many options worth investigating that can help you pay your tuition and expenses.
Federal Direct Loans
Federal Direct Loans are low-interest education loans financed directly by the US Government. They are available to students who meet basic federal aid requirements including at least part time enrollment in pursuit of a degree. These loans do not require credit approval and have a variety of deferment and repayment options.
There are two types of Direct Loans, subsidized and unsubsidized. The federal government pays the interest on subsidized loans while the borrower is enrolled in school at least part time and during authorized periods of deferment. The interest on unsubsidized loans begins to accrue immediately upon disbursement.
Eligibility for subsidized and unsubsidized loans is based on financial need, while eligibility for Direct Loans is determined by filling out the Free Application for Federal Student Aid (FAFSA).
Federal Perkins Loans
Perkins loans are awarded to students with exceptional financial need. Interest does not accrue on the loan while the borrower is enrolled in school at least part time, during grace periods, or during authorized deferments. Availability is limited and determined by the FAFSA.
Also available from the US Government, the SMART Grant provides up to $4000 annually for students in approved fields of study including ecology, natural resource conservation, recycling technology, environmental science, hydrology, and water resource science.
Federal Direct Parent & Graduate Plus Loans
Parent PLUS Loans are available to the parents or stepparents of dependent undergraduate students. Graduate and professional students are eligible to take out Graduate PLUS Loans on their own behalf. These credit-based loans are not determined by financial need. Interest rates are higher than other federal loans and, although payments are usually deferred while the student is in school, interest does accrue.
Employer Tuition Assistance
Many employers (especially larger companies) have tuition reimbursement programs for their employees. To find out about these programs, you should inquire with your HR department. Some companies will also agree to pay some or all of the tuition of new hires as an incentive to accept employment (this is particularly true for professional degrees such as an MBA).
There are many national scholarships available, but finding and applying for them can be daunting. Use sites like Fastweb (http://www.fastweb.com/) and CollegeBoard (http://www.collegeboard.org/) to find out what is available.
Private loans usually come from a bank and require a satisfactory credit history and, in some cases, a credit-worthy cosigner. These should probably only be considered as a last resort since interest rates are higher and repayment terms less favorable.
Paying with personal savings (if you have it) is the easiest way to cover the cost of your education. Remember, school is an investment in yourself and your future. If you are considering cashing in investments, it is worth talking to a qualified tax and financial advisor to help you best understand how that might affect your taxes. In some cases, you may be better off taking low interest loans and repaying them slowly from your personal savings.
Many students continue to work in order to pay for tuition and/or school expenses. The time commitment of going to school and working full or part time can be challenging, but the reward is an education with less debt when you graduate. For many students it is the only option.
More and more schools are offering nights and weekends, online, and residency (where you go to school one long weekend a month) programs that cater to working students. Another consideration is to only go to school part time. Keep these options in minding when looking for a school if you think you might continue to work to finance your education.
Also, if you are considering going to school but must continue to work, talk with your employer. Many employers are willing to work with an employee’s schedule if they know that, in return, they will have a more qualified employee upon graduation.