Creative College Financing

Creative College Financing

In a recent report from US News and World Report, Baruch College was ranked first for value and social mobility!  This is college application season for high school students and their families.

For many students, paying for college involves student loans. In 2021, almost 64% of college graduates had taken on student loan debt.  Americans owe $1.77 Trillion in student loan debt!

If you’re preparing for college, know that there are ways to avoid graduating with a massive debt burden. Graduating without student loans can be challenging, but it’s possible with the right strategy.

Read for the 7 strategies that can help you pay for college without loans:

  1. Strategically Accumulate Credits-  Before enrolling in college classes, students should consider looking for placement exams for subjects like languages and mathematics. If they test well, they may be able to skip basic introductory classes like Spanish 101. High school students with high scores on Advanced Placement or International Baccalaureate exams may also earn college credit . Students typically need 120 credit hours to graduate with a bachelor’s degree. Skipping basic classes and getting credit for high school work can help students graduate faster, which can save them money on tuition, room and board, and other college-related expenses.
  2. Consider Staying Local- Attending a public in-state college may be one of the easiest ways to avoid student loans – or at least minimize them. Public schools charge much lower rates for state residents than for out-of-state students. For example, tuition at the University of California at Berkeley is $43,980 per year for out-of-state students, while it only costs California residents $14,226.  Check to see if you qualify for special grants, scholarships, or other incentives from your state to attend a public institution. For example, New York’s “Excelsior Scholarship Program” makes it possible for New York state residents whose families earn $125,000 or less to attend any State University of New York or City University of New York institution without paying tuition.
  3. Consider Earning Credits in a Community College- It’s possible to save money on tuition by taking some courses at a two-year community college and transferring those credits to a four-year institution. For the 2022-2023 academic year, the average cost of tuition at a public two-year institution was $3,860 for in-district students, while it cost $10,940 in tuition for in-state students to attend a four-year public school, according to “Trends in College Pricing and Student Aid 2022, an annual survey from the College Board.  Before enrolling in a community college, verify that the credits you earn will transfer to the four-year institutions you’re interested in. Keep in mind that you may have to pay higher tuition if you attend a community college outside your state or district.
  4. Apply for Scholarships- Receiving scholarships is one of the best ways to pay for school, and applying can require a good amount of research, planning, and effort.  High school students should consider talking to their college guidance counselor about finding scholarships from community organizations, like a local Rotary Club.
  5. Consider Applying for Subject-Based Awards- While students might assume that scholarships are only for incoming first-year students, there are still awards available for sophomores, juniors, or seniors. If you decide on a career path after you enroll, take the opportunity to search for scholarships specific to your major. For example, if you decide to major in chemistry, start looking for awards geared toward chemistry students.
  6. Don’t Rule out Private Schools- While public universities may have lower initial tuition rates, private colleges may provide generous financial aid packages to worthy students.  Smaller and mid-sized private colleges are often trying to compete with major public universities.  They may be more generous when it comes to courting students, especially those with high needs and high grades.
  7. Complete the FAFSA No Matter What- The bare minimum every student should do to minimize loans is to fill out the FAFSA (Free Application for Federal Student Aid).  The FAFSA provides access to federal student loans and grants, including the Pell Grant.  Filling out the FAFSA is the only way to qualify for federal grants, loans, and work-study programs. Many states also require the FAFSA to be submitted before awarding their own grants and scholarships. The FAFSA is available starting Oct. 1 the year before you plan to attend college, and there is good reason to apply early. Schools that use the FAFSA for their own internal awards may have a limited number of scholarship slots, so check for school-specific priority filing dates. You should also look for any deadlines from your state.

Another reason to complete the FAFSA early is because endowment money is “first come, first serve!”  When alumni graduate and donate/give money back to their school, that money goes into the school’s endowment fund.  This fund is used to fund merit-based endowment (free money) scholarships.  Better to apply when their coffers are full!