Steps For Funding College Tuition

Financial Steps For Funding College Tuition
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How Do I Pay For College?

It’s been a long year of college applications, standardized testing, financial aid applications and more! So much has been done, but a big question still stands, “How do I actually pay for college tuition?” AAA offers advice on ways to help fund your college tuition for the fall.

  • Accept ALL FREE grants, scholarships and awards that are offered in your school’s financial aid award letter. This is free money - don’t leave it on the table!
 
  • Federal Work-Study is administered by schools and provides part-time jobs for students with financial need. It allows students to earn money to help pay education expenses. Be aware, work-study wages are typically earned and paid to the student throughout the academic year. This money is typically used for indirect college costs like text books, supplies and other necessities. Do not calculate it into the college tuition funding.

 

  • The Federal Stafford Loan is the most popular low-interest federal loan. It will be offered at 3.765% with 1% federal fees for the 2016-17 academic year. The loan is insured by the federal government and offers flexible repayment options. Subsidized Stafford loans are need-based – the government pays the interest while the student is in school, in deferment (if applicable), and during the grace period. Unsubsidized Stafford Loans are not based on income. Eligibility is determined by the student’s year in school, other financial aid awards, and the estimated cost of attendance. Students who borrow unsubsidized Stafford Loans are responsible for all interest that accumulates.
 
  • Some students with exceptional financial need might be offered a low-interest Federal Perkins Loan. Your school is the lender and funds depend on financial need and availability of resources at the college.
 
  • Next, consider using a 10-month payment plan for some or all remaining costs. Companies like TMS and Sallie Mae offer these payment plan options for a small fee. For example, if you owe $5,000 in tuition, you can pay a service fee and spread this amount over 10 payments of $500.
 
  • If you still need options to fund remaining costs, look at the Federal Parent PLUS loan. This loan requires a parent or step-parent to be the borrower. The interest rate will be 6.31% and Federal fee of 4.29% for the 2016-17 academic year. The PLUS loan generally has less restrictive credit criteria.
 
  • Finally, consider a Private Student loan to fund the remaining costs. Be a savvy borrower and look for the best options for your student. Consider loan products with low rates, NO FEES, IRR (interest rate reductions for auto payments), graduation rewards of 3% balance reduction, co-signer release options and mor.

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