Every parent wants to help their child succeed. But when it comes to paying for college, it’s not always possible.
Fortunately, depending on the circumstances, you and your child may have several options to help them pay for school. First off, there are a variety of resources for students designed to help them pay for college. This includes things like federal student loans, scholarships, and grants.
Beyond that, students could look into getting a part-time job or paid internship. This could potentially boost their resume while offering an opportunity to earn money to pay for college.
From there, parents can consider options including borrowing a loan to help pay for college.
Options for Parents and Students
Parents and students can work together to create a plan to help pay for college. Here are some ways you can both work together to pay for college.
Fill Out the FAFSA
If your student is a dependent, the FAFSA® or Free Application for Federal Student Aid requires both your child’s information and yours as their parent. Work together to fill out the form. The FAFSA is used to determine eligibility for federal student aid including federal student loans, some scholarships and grants, and the federal work-study program.
The FAFSA needs to be filled out annually.
Choose a More Affordable School
Enrolling in a more affordable school may relieve some of the financial burden facing your family. Depending on your child’s interests and career goals, they may be able to enroll in a community college for the first two years of study to cut down on tuition costs.
Living at Home
If your child’s school is local, you can also offer to have them stay home, so room and board are covered. If your child’s school is not close to home, you can still review housing costs. While some schools require first-year students to live on-campus, after, students may find that living in off-campus housing may be more affordable than paying on-campus rates. Explore the realities for your student.
Options for Students
There are a variety of funding sources available to students. When triaging, focus first on the options that don’t need to be repaid, such as scholarships or grants. Then, there are things like part-time work and student loans that can be used to pay for college. Here are a few options to consider.
Applying for Scholarships and Grants
Depending on the school your child is planning to attend and their grades and activities in high school, they may be able to qualify for an academic or merit-based scholarship .
Grants, on the other hand, are generally based on your child’s financial need. Students typically aren’t required to repay scholarships or grants, so they’re a great option if you can’t pay for college on your own and want to avoid debt as much as possible.
It’s also possible to get scholarships through private organizations. Websites like Scholarships.com and FastWeb allow you to search through thousands of scholarships, making it easier to find one for which your child might qualify.
There are also scholarships available for current college students, so your child can continue to apply for those options even after he or she is enrolled.
Work-Study Program
When filling out the FAFSA, you can specify whether you are interested in participating in the work-study program. This program offers part-time jobs to students who demonstrate financial need. Depending on the school, students may be assigned a job or have the option to apply for a job.
One major perk of the work-study program is that the money earned won’t count toward income totals when filling out the FAFSA for the next school year.
Part-Time Job
Attending classes, doing homework, and establishing a social life are all important elements of a college experience. But working a few hours a week can help relieve some of the stress of dealing with the expenses that come with that experience.
For example, let’s say your child gets a job working eight hours a week and earns $10 per hour. Over the course of four years, assuming they don’t change their schedule, they could earn around $16,640. Even after taxes, that might help reduce the amount they would need to borrow or spend for college by thousands of dollars.
Borrowing Student Loans
Both federal and private student loans are available to students. The U.S. Department of Education provides student loans to college students without requiring a credit check (except for PLUS loans). And federal loans come with relatively low fixed interest rates, plus access to some special benefits — such as income-driven repayment plans or the option to pursue Public Service Loan Forgiveness.
As mentioned above, to apply students need to fill out the FAFSA each year. Undergraduate students may qualify for two types of federal loans: subsidized or unsubsidized. Direct Subsidized Loans are awarded to students based on financial need. The government subsidizes, or pays for, the interest on these loans while the borrower is enrolled in school and during the grace period and other qualifying periods of deferment.
Direct Unsubsidized Loans are not awarded based on financial need and borrowers are responsible for paying all of the interest that accrues on this type of loan.There is no credit check when applying for these types of federal student loans.
Recommended: Private vs Federal Student Loans
Students can also look into borrowing a private student loan, though it’s worth noting that these loans may lack the benefits and protections afforded to federal student loans (like income-driven repayment plans) and are therefore generally considered as a last resort option.
Private student loans are offered by private lenders and to apply, students will have to fill out an application directly with their lender of choice. Each lender may have different terms and rates so it can be worth shopping around to find the best option for your personal situation. Lenders will generally evaluate a borrower’s financial situation and creditworthiness when determining how much to lend and at what rates. If a student does not qualify for a private loan on their own, they may be able to add a cosigner to the loan.
Options for Parents
As a parent, it can be frustrating and stressful when you feel like you can’t afford your child’s college tuition. Take the time to consider what you can afford without sacrificing your own important goals, including retirement.
Here are a few actions that could help you assist your child pay for their college education.
Borrow a Loan
Parents can consider borrowing a private student loan or a federal student loan. Parent PLUS or private student loans.
Parent PLUS Loans are federal loans that are available to parents. The interest rate on these loans is a bit higher than for Direct Subsidized or Unsubsidized Loans and a credit check is required. In order to qualify, parents must not have an adverse credit history . In the case that a potential parent borrower does not qualify for a Parent PLUS loan on their own, they may be able to add an endorser to their application.
If you need extra help funding your children’s
education, you can look into private
parent student loans from SoFi.
Private lenders may also offer parent student loans. Parents can apply directly with the lender, and as mentioned above, it can be worth shopping around to see what types of rates and terms for which you may qualify. SoFi offers parent loans that can be applied for directly online and are fee free.
Cosign a Student Loan
If you do not want to borrow a loan to pay for your child’s college education and your child has exhausted their federal student loan options, you could cosign a private student loan with them. Keep in mind that, as already noted, private student loans are generally considered an option only after all other sources of aid and funding have been exhausted. This is because they don’t offer the same borrower protections as federal student loans.
Cover What You Can
Another way is to find other expenses you can cover. You may consider footing the bill for their textbooks every semester, or maybe you have enough income to help with their monthly rent or college-provided room and board fees. While covering a smaller expense may feel anticlimactic, it can still make a difference to your student.
The Takeaway
If you’re struggling to pay for tuition costs, you’re not alone. As you consider ways to help your child pay their way through college resources like scholarships, grants, work-study, and federal student loans are all options to consider. In some situations, you and your child may consider transferring or enrolling in a less expensive school or cutting costs by living at home.
If those options aren’t enough — some students and their families may consider private student loans. In the spirit of complete transparency, if you do need to resort to student loans, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider SoFi as your private loan lender.
If you do decide a private student loan is the right fit for your education, know that SoFi’s private student loan process is trusted, easy, and fast. We offer flexible payment options and terms, and there are no hidden fees.
Learn more about SoFi’s private student loans; get a rate quote to see what kind of terms you might qualify for.
SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp. or an affiliate (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOPS19018
Source: sofi.com