Are you wondering how to pay for college? Whether you’re planning on going to college this fall, next year, or the year after, it is not too late to learn how to get that tuition paid.
There are a few programs available that will help pay for college. This brief guide will help take the stress out of paying for college and give you the information you need.
Free Application for Federal Student Aid (FAFSA)
The Free Application for Federal Student Aid – often simply referred to as “FAFSA” – is a type of form that needs to be filled out to determine if you qualify for any type of college financial aid provided by the federal government.
Most states and colleges utilize the information from this form to make a decision about which students qualify for the aid and then proceed in determining just how much those students will be rewarded.
Once completed, you may find that you qualify for grants, federal student loans, a work-study program, or even a scholarship.
It is a known fact that funds are often limited, so, you should apply as early as possible. It is also important to understand that you will need to complete the FAFSA each year that you attend college.
No Repayment Options
There are several types of grants and various scholarships available that you may qualify for that do not require repayment.
Grants are special types of funding that are often based on financial need.
Scholarships – on the other hand – are provided to qualified individuals, based on merit.
These financial assistance options are provided by numerous sources.
Examples include the federal government, the government of the state where you reside, colleges, and both private and non-profit entities.
In terms of a grant, there may be requirements – such as maintaining a certain GPA or completing a certain amount of coursework in a given period.
Prior to acceptance, you must ensure that you are able to successfully meet all designated requirements.
The Qualified Tuition Plan
A Qualified Tuition Plan – often referred to as the “529 Plan” – is a specially-designed savings plan to help you pay for college. It will allow you to either prepay or save money towards academic expenses.
This is offered by both states and schools. The money put into this plan is not taxed and the withdrawals are not taxed if the money is put towards educational expenses that are considered to be “qualified”. There are two types of plans that fall under the Qualified Tuition Plan.
These are the Prepaid Tuition Plans and the College Savings Plans. Examples of educational expenses included with these plans include the following:
- School-Related Fees
- Lab Fees
- Extracurricular Activities Part of an Educational Program
If you have not saved enough to pay for college or find that your scholarships and/or grants will not cover your educational expenses, you do have the option of applying for student loans.
The money you receive is considered to be “borrowed” and it must be paid back. The payback amount includes interest. These loans may come from the federal government, a financial institution and/or bank, and other types of private sources, organizations, and entities.
When choosing to take out a loan for your college education, it is imperative that you have a loan officer review all terms and conditions associated with that loan.
The Federal Direct Loan Program
There is a federal student loan program offered by the United States Department of Education. It is officially referred to as the “William D. Ford Federal Direct Loan Program”.
The lender of this type of loan is actually the Department of Education in the United States. It currently offers four unique loans. The following outlines the names of these loans as well as a brief explanation of each:
- Direct Consolidation Loans – In this type of loan, you can combine different types of federal loans for your education into just one loan. If you have multiple loans, this is an excellent means of getting those loans down to a single affordable loan with less interest.
- Direct Subsidized Loans – These are types of loans provided to undergraduate students who meet the eligibility requirements and have a financial need when it comes to covering the expenses associated with their college education.
- Direct Unsubsidized Loans – These loans are not based on financial issues or needs. They are simply loans provided to students – whether undergraduate, graduate, or professional.
- Direct PLUS Loans – These types of loans are designed to help cover educational expenses that are not covered by any other type of financial aid. These require a credit check, but are not based on financial need. These may be provided directly to students or to those that parent dependent students.
If you are attempting to save for college over an extended amount of time, you may want to consider savings bonds. There are many tax benefits associated with the payment on savings bonds.
All that is required is that both the principal of the bonds and the interest is used to pay qualified educational expenses at a higher educational institution that is deemed “eligible”.
Now that you are familiar with a few of the strategies that may help pay for college education, we would like to point out that here at Somerville Bank, we take educational pursuits very seriously. We pride ourselves in encouraging those in our community to pursue a higher education.
We will work closely with you to determine if you qualify for one of the many loans that we have available. We may also provide you with information on savings bonds and special savings accounts that will help in saving the money you require for college.
If you would like to learn more or would like to start the loan process, you may visit us at one of our many locations today: https://somervillebank.net/locations/