Paying for college without student loans seems like a great idea. After all, who wants students to graduate saddled with $20,000 or more in student loan debt? But the fact is college is expensive and students will likely have to borrow some money. However, borrowing can be minimized if families avoid believing these myths about paying for college:
1. You have to start at community college or a cheaper school.
Students should apply to a variety of schools and see who offers them scholarships. A full ride at Harvard is cheaper than paying for expenses at a state university. Use net price calculators on university websites to see what financial aid your student might qualify for, but also check with high school counselors. High school counselors can help students get an idea of how much money in grants and scholarships different schools might award them.
2. There aren't scholarships for community colleges.
Always find out about scholarships from the financial aid office at any college. A $1,000 scholarship received from a community college allows students to borrow less. It also helps families who've saved for college to keep money growing in investment accounts longer. This money can be used toward the student's costs to attend a four year university for his or her final two years of undergraduate education. For instance, if a family has managed to save $20,000 for their child's education and the student receives scholarships for their first two years of community college, they would still have $20,000 left when the student transfers to the new school. That amounts to $10,000 per year, more than the average tuition and fees for a four year public university last year. Then the family will just have to figure out how to pay for room and board, which could include a combination of student loans, student employment, and the parent's current income.
3. Your child earned their dream school.
Parents have a hard time telling their offspring that they can't attend a school because the family budget can't handle the cost of attendance. But remember this: dreams have to be earned. What were your child's high school grades? Can they get scholarships? Are they willing to contribute to the cost of college with income they earn? Do they understand student loan debt and what it will mean to their future budget?
For more on this topic, read How to Make Sure Your Dream college Doesn't Turn into a Student Loan Nightmare.
4. You shouldn't fill out the FAFSA.
The Free Application for Federal Financial Aid (FAFSA) is often thought of as the fast track to student loan debt. This isn't true. What it really is is an open letter to the universities students are considering that they want financial help to attend college. That help can come in the form of scholarships, grants or student loans. Don't ever forget to fill this form out. It will cost you thousands of dollars and you can deny all or part of student loans awarded. In addition to filling out the FAFSA, follow up with special circumstances forms when needed. These are supplemental forms submitted to college financial aid offices if financial situations have changes. For instance, one parent lost their job or experienced an income reduction since filling out the FAFSA form.
5. Payments plans are just for parents.
Students with part time jobs can also make payments for their tuition and fees. Payment plans may allow a family to pay tuition and fees in anywhere from tow payments per semester to monthly payments. Each university may have different payment plan options. Ask the accounting or bursar's office what options are available before stepping onto campus for the first time.
Bottomline
Paying for college often involves a set of strategies, not just one method. Do try to avoid borrowing a huge amount of student loan debt. But some borrowing doesn't have to impact a student's future.
