How To Pay For College: A Family Guide

College education leads to higher income, job security, and great opportunities in life. But, it may take until age 34 for the average bachelor’s degree recipient to fully recoup these costs.

Student debt can put a damper on one’s ability to obtain wealth. It pays to plan to save as much as possible ahead of time and lessen the burden, supplementing with more attractive federal loans, scholarships, grants, and work-study programs before tapping higher-cost private loans.

Here are my five recommendations

1. Plan for your child’s college as early as feasibly possible. Get a jump with these six possible ways.

2) Fill out the FAFSA (The Free Application for Federal Student Aid) application. Don’t think of it as an option.

3)Reduce your  Expected Family Contribution (EFC) in legal ways. Parents may want to consider private loans if they borrow above their contribution through their income and savings. They are not all need-based.

4) Get as much as you can from federal loans for students before private loans.

5) Go for work-study, grants, and scholarship money. Scholarships are merit-based. If you do not get the award you had hoped for, there is an appeals process for you to follow below.

There are several federally sponsored loan programs for undergraduate students: Stafford Loans are among the most common, desirable, and low-cost loans at fixed 2.75% interest rates offered directly to students rather than to parents, ranging from $5,500 to $12,500 per year, gradually rising after the first year.

It is always a good idea to challenge your initial financial offer via an appeals process or a professional judgment process, especially if there are circumstances that occurred after the submission of your financial aid application.

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