Paying for college education is a worrisome issue for most students as well as parents. Economic turbulence and increasing tuition fees have not helped the situation either. But following a few simple guidelines can ease the financial burden of college education to a great extent. At the same time, you can keep your overall financial position secure too.
The biggest stumbling block in case of college education is the high tuition fees. It is important that you do comparison of costs of studying in every college that you are applying for. You will have to take into account the fees, the financial aid package, the cost of the student loans and the cost of living in that city.
One of the first things that you should do is to enroll for Free Application for Federal Student Aid (FAFSA). FAFSA can help you get various grants and financial aids from the college. It also helps in securing federal student loans. Even if you did not qualify for FAFSA earlier, you should still apply as the eligibility criteria vary every year.
Another thing that you should do is to apply for various federal student loans. Federal Stafford Student Loans are subsidized or unsubsidized loans given to college and university students for supplementing their financial resources for college education.
There are various other loans also that are given to students who apply in colleges that are part of federal aids programs by the U.S. Department of Education. The main advantage of these loans is that the credit scores are immaterial and there is some grace period after graduation for which no payments are needed.
If you still need more financial support, then you can look for private loans after you have exhausted the federal limit. The private loans will need a good credit score and usually have variable interest, while federal loans have fixed interest. The interest rate of private loans is usually higher than that of federal loans.
College education is important, but you should not upset your entire financial situation in order to pay for college loans. If you are paying for your child, then refrain from using money from your retirement funds. If you do that, then you will have to pay taxes and will burn a hole in your retirement savings. It will also lower the financial aid you are eligible for. Similarly, do not use home equity loans to pay for college education, as the interest rates of these loans are high.