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There are plenty of ways to both find and save money for college; so many that we can’t list them all here. We’ve split our college money tips into two sections: basic and advanced. If you are just starting the financial aid process, or are trying to save money for a college education in the future, start with the basics. For students and parents who have already been through the financial aid process, you might find something in our advanced tips that will help you make improvements to your current situation.
If you aren’t familiar with college financial aid, some basic insights about free money for college and the way financial aid works can help you save big bucks. If you are still planning for college or preparing to make your college selection, you are in a great position to make financial decisions that can translate into real college money savings. We’ve put together some of our top college money tips for college students and parents who are just starting the financial aid process:
It’s never too early to start saving for college. Whether you are a college student, or parent, your college experience will be better if you are prepared. As a future student, you should consider putting away money for college into a 529 College Savings Plan. You can save your graduation gift money and any money you earn during your summer or part-time work. If you are diligent about saving during high school, you may be able to work less, or not at all, during college. The money for college you have saved can be used to pay for routine expenses, study abroad, and afford extracurricular activities.
As a parent, you should strongly consider starting a college savings account for your child, specifically a 529 Plan. Prepaid Tuition Plans allow families to purchase credits at participating colleges and universities for future tuition at today’s rates. 529 College Savings Plans allow you to invest your money without being taxed on the growth of your investment. In addition, your withdrawals are tax-free, provided they are used for qualified educational expenses.
Get more information on 529 College Savings Plans.
If you are new to the financial aid process, you’ll need to understand “EFC,” or your Expected Family Contribution. Your EFC is the amount of money that your family is expected to contribute to your college education for one school year, based on the information you provided in the FAFSA. Your school will subtract your EFC from the total cost of attendance to determine your financial need. If you or your parents (if you’re a dependent undergraduate student) make a large salary, there is not much you can do to reduce your EFC. However, be mindful of additional income from a student’s part-time job, stock sales, bonuses or gift money. Additional income in the current tax year may increase your EFC, and reduce financial aid for the next school year.
Most people look at the price tag of an item before they decide to make a purchase. You should do the same thing when you compare colleges, generally after you receive your financial aid award letter from all the schools to which you were accepted. When you compare college costs, make sure you primarily look at the amount of free money (scholarships and grants) that you were awarded. The amount in Federal Stafford Loans that you can borrow should be the same across schools.
If you have your heart set on a certain school, but another school has offered you more financial aid, don’t be afraid to speak to the financial aid department at your preferred school. Tell them that you were offered more financial aid at another school, but if they were able to match the offer, this would be your school of choice. In addition, if your family’s financial situation has changed dramatically (i.e. medical illness, job loss, financial hardship) since you filled out the FAFSA, make sure you notify all of your potential schools to see if your financial aid package can be increased.
So you’ve filled out the FAFSA, gotten your award letter, and you still don’t have enough money for college. If you need money to pay your tuition bill right now, you should probably look to borrow more in private student loans (College Money Tip #7). For more long-term solutions, check out College Money Tips #4-6 below.
Everybody wants to enjoy the college experience, but the reality is that college life is expensive and most students don’t have a large income to support their habits. You can’t change the cost of tuition, but you can put together a college budget and get smart about your finances. You may have to get creative to save money, such as carpooling or cooking when you can instead of eating out. If you can cut back on some parts of your budget, you can save up to do the things you really want – like traveling, study abroad, and extracurricular activities.
Even if you thought you did a good job with your scholarship search, there is always more that you can do if you have the time. Start by checking with your financial aid office and the specific department of your college major (e.g. English, Business). You should also check with your job, your parent’s job, and your extracurricular activities to see if they offer scholarships. Scholarships from your school or your community generally have fewer applicants than national or regional scholarships, and thus your chances increase. Once you have exhausted all of your own resources, you can continue your scholarship search online.
If you haven’t had success obtaining any of the scholarships that you apply to, check out our college scholarship application tips.
Once you have trimmed your college expenses (College Money Tip #4), you may need to consider working part-time. Many college students have federal work-study jobs, college internships or full-time summer jobs to supplement their income. If you do need to find employment, make sure that you are able to tailor your schedule so that you don’t miss classes. Try to find something close to your residence or campus to cut down on commute time and costs.
For more information on various types of college employment, check out our section on student jobs.
Once you have exhausted all of your scholarships and grants, and borrowed the maximum amount in federal student loans, you may need to consider a private student loan. Private loans can help you get money for college quickly if you need to pay school bills. Private student loans can also cover other college expenses, like books, room and board, travel, a computer and more.
For more information on borrowing money for college, check out our section on private student loans.
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