College tuition and associated costs are rising at incredible rates, with the cost of attending a degree-granting institution coming in at $20,234 per year according to the National Center for Educational Statistics.
The scary part is, paying off such large amounts of debt takes time. You also have to figure, grads will need to take on even more debt as they get older — when they buy a car, a house, take on credit card debt or even pursue higher degrees. When we looked at Credit Sesame members in the Baby Boomer generation, they had a surprising amount of student loan debt — $32,180.
However, a higher education is an excellent investment in a person’s life and can provide an earning potential that is, on average, better than that of non-college educated peers. Sadly, too many students aren’t able to enjoy the fruits of their hard work since large portions of their income are going to student loan debt and paying off $10 pizzas that have since become $40 pizzas thanks to high credit card interest rates.
The ticket to money
Many college students don’t take the time to do one simple task that can lead to money: fill out a FAFSA.
The FAFSA, or Free Application for Student Aid, is what college bound students and current college students should fill out every year. Many funds are given out on a first-come, first-served basis, so this is one task that should take top priority as soon as the new year rolls around.[Related: Happy 16th Birthday! Here’s the Best Credit Gift to Give Your Child]
Filling out the FAFSA is free (if you come to a payment page, you’re on an imposter site) and requires creating an account on the website and filling out the online form (paper versions are available, but obviously are more labor-intensive and may take longer to process). Before you fill out the form you’ll need to have certain information at hand, including the student’s and parents’ Social Security numbers, and the previous year’s tax records.
You can estimate the numbers if you haven’t filed your tax return yet (and update them later), or the data can be pulled from the IRS if you’ve recently filed. Some states and schools have early deadlines for filing the FAFSA so be quick. File your taxes and fill out the FAFSA because time does equal money.
The FAFSA isn’t a one-time thing; to have access to the greatest variety of grants, scholarships and loans, complete a new one each year that you remain in college. You can even apply for the current year after the spring semester has ended; it’s not too late to see if there’s any money to be had for this current semester.
Free money… and not so free money
Remember that not all of the money your FAFSA says you’re eligible for is free money. Some funds are genuine grants, free for the taking. The FAFSA also helps schools determine loan eligibility. Loans may be subsidized (the government pays your interest while you’re in school) or unsubsidized. Students can choose which funding to accept and which to pass up.
Other ways to maximize college funding
Besides filling out the FAFSA and getting a good chance at obtaining free money, college students and high school seniors can do a few other things to increase their chances of graduating without the proverbial mountain of student loan debt.
One often overlooked way to keep college costs to a minimum is to attend a public college in the state where you live. Some states have reciprocity, meaning you can attend a college in a neighboring state for the local price. Unless you’re planning to major in a field that most universities don’t offer courses in, you can get a quality education in your home state. The majority of employers don’t care where a prospective employee graduated from, only that they learned something that they can put into practice in a way that benefits the employer.
Spend time each week locating and applying for scholarships. High school counselors often know of local scholarships that aren’t widely publicized or readily known, like the garden club’s scholarship for students who major in botany, or the electric company that offers a scholarship to the children of its customers.
Houses of worship, community organizations and professional clubs are other good places to look for scholarships. Websites like Fastweb and Scholarships.com also allow you to expand your search to find scholarships.