At State University, we strive to make higher education accessible to all adult learners. This informative guide is designed to educate you about your financial aid options, so you can find the resources you need to pay for college and achieve your goals.
College costs have climbed steadily over the years, with reports saying tuition has risen as much as 80 percent since 2000.1 College loan debt has grown too, surpassing car loans and credit cards as the largest source of personal debt. Along with higher costs, many public colleges and universities are spending less per student today than they have in many years because of decreased education funding by other sources. Even severe cuts to per-pupil spending are not enough to make up for the drop in school funding, so tuitions have skyrocketed.
College enrollment has declined correspondingly, but not because people do not want to go to college. The fact is that many families simply cannot afford the increased cost.
In 2017, Americans owed over 1.3 trillion in student loan debt, and 1 in 5 adults ages 30-44 were paying off student loans.2
The value of a higher education is undeniable. Earning your college degree can increase your earning potential, improve your job prospects, and set you up for a more secure future. In fact, 86 percent of college graduates find their college education worth the money they put into it.2
According to the U.S. Bureau of Labor Statistics, bachelor’s degree holders earn 67 percent more on average than those with only a high school diploma.3 A recent study found that bachelor’s degree holders are likely to earn $1 million more over the course of a lifetime than their peers who have only completed high school. Using those calculations, it’s estimated that the value of a college degree is $970,000.4
A college degree provides job security too. The unemployment rate for workers with bachelor’s degrees is almost 50 percent lower than those with a high school diploma, according to the BLS. During the more recent recession, the population that suffered the greatest job loss was that group with no postsecondary education. The group that was impacted the least: college graduates.5
College grads experience benefits of their education far into the future. According to the Lumina Foundation, bachelor’s degree holders are more likely to have health insurance, contribute to a retirement plan, and rely less on government assistance. College grads also have a greater impact on society through volunteerism and philanthropic contributions.6
Most college students pay for their education with grants, scholarships, loans, or a combination of the three. The purpose of financial aid is to bridge the gap between educational cost and a student’s resources.
Here is a quick overview of the differences between grants, scholarships, and loans. The following details will give you a deep-dive into each financial aid option.
| Grants | Grants are essentially free money awarded to students based on financial need. Typically, grants come from the government, your college, or a nonprofit organization. Here’s the best part: you don’t have to pay them back. | Cost to you: Free |
| Scholarships | Scholarships are usually awarded based on merit or other specific requirements, including minority status, athletic ability, or academic achievements. Scholarships, like grants do not need to be repaid. | Cost to you: Free |
| Loans | Loans differ from grants and scholarships in that they must be paid back. Some loans may be subsidized by the U.S. Department of Education while others are offered unsubsidized—meaning you pay the interest. | Cost to you: That depends on the amount you borrow, when you pay it back, and the interest you accrue. |
Grants are a great way to fund your education because, unlike loans, most do not have to be paid back. Each grant is awarded on a need basis and will have unique qualifiers that must match your situation.
To learn more about federally issued government grants, including eligibility requirements, visit studentaid.gov
Scholarships are usually awarded based on merit or other specific requirements. Sometimes those requirements may be based on minority status, athletic ability, or may even be awarded to students that win academic competitions. Scholarships, like grants, do not need to be repaid.
You can learn about scholarships in many ways, starting with contacting the admissions office at the school you plan to attend. Another good place to find scholarship information is the U.S. Department of Labor’s scholarship search tool.
Remember that you do not have to pay any agency or individual to find scholarships or other financial aid opportunities.
Loans come in all sizes and varieties and differ from grants and scholarships in that they must be paid back. Some loans may be subsidized by the U.S. Department of Education while others are offered unsubsidized.
The difference is that the U.S. Department of Education pays the interest on a Direct Subsidized Loan while you are in school, and you are responsible for paying the interest on a Direct Unsubsidized Loan.
For a full list of Federal student loans, interest rates, and criteria for eligibility, visit studentaid.gov.
You do not need to pay an agency or individual to find scholarships or financial aid for you.
Generally speaking, you must demonstrate financial need for a majority of the federal student aid programs. This need is typically defined by the difference between the cost to attend a school and your expected contribution to the cost.
If you do not meet the citizen eligibility status, there may be options through the U.S. Department of Labor or your country’s embassy or consulate that may afford you aid. Ask the college or career school you plan to attend whether they offer any aid for students in your situation.
For a complete list of eligibility criteria, visit studentaid.gov. You can also speak with a financial aid advisor at the school you are interested in for answers about specific criteria.
A college degree is worth every penny you put into it. Although applying for college can seem daunting when you start thinking about how to pay for it, use this checklist to help you stay on track when securing financial aid opportunities:
Visit fafsa.gov to fill out the FAFSA application for federal student aid, including federal student loans. You can do this before you decide which school you will go to.
You can fill out the form online for the fastest response (and online help) or download an application to fill out and return by mail. If you apply online, you can expect a response in a week or less. If mailed, give your application a few weeks to process.
You will then receive a Student Aid Report (SAR) that helps your school determine the types of federal aid for which you are eligible.
Contact an admissions advisor at your college or university of choice, who will:
Once you receive the SAR results of your FAFSA application, a financial aid advisor at your university or college will use your overall score along with the report to help find the right amount and type of aid you qualify for.
They will also calculate your school fees, tuition, and estimated costs for books and supplies to help you determine the total amount you will need to attend.
A simple rule of thumb is to take advantage of free money first, like scholarships, grants, and gifts, as it is difficult and time consuming to save up enough ahead of time. Then, look into borrowing money, starting with federal student loans.
There are specific timetables that must be adhered to in order to qualify, so do not delay applying for them. In some cases, grants are given to qualified students on a first come, first serve basis so apply for grants as early as you can.
Here are some helpful tips on how to manage your student loan debt and pay back what you owe. To learn more about federal student loans, including current interest rates, visit studentaid.gov.
Federal student loans are a great place to start since the interest rate is fixed and is often lower than private loans and most credit card interest rates. You will not need to get a credit check for most federal student loans (except for PLUS loans), and federal student loans can help you establish a good credit record. You usually do not need a cosigner to get a federal student loan.
If you have a number of student loans, you can consolidate them into a Direct Consolidation Loan.
If you are having trouble repaying your loan, you may be able to temporarily defer or lower your payments while you are continuing your education. If you work in public services for health care or education, you may be eligible to have some portion of your loans forgiven.
Whether you go with a federal or private loan, ask your school’s financial aid advisor for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can use the Department of Labor’s career search tool My Next Move to augment that information so you can consider your debt-to-income ratio before taking on debt.
Use free resources to help figure out what you need. A college financial aid office is a free resource that will assist in providing all the information you need to find money — you should not pay anyone for those services.
Take advantage of grants, scholarships, and gifts, borrowing only what you need.
Don’t let financial worries stop you from getting the education you want. There are a wide variety of resources to help you pay for college and a financial aid advisor can help you navigate them. Every school is different, so contact the financial aid office of the school you’re interested in early and arrange a meeting to get all the latest information.
A good advisor will help you:
A financial aid advisor can review the results of your student aid report with you and help determine the best aid options available to you.
Here are a few helpful links to help you find more information about your financial aid options.