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Feeling overwhelmed about your options to paying for college? It turns out you’re not alone. According to The Ohio State University’s National Student Financial Wellness Study, 74% of college students agreed or strongly agreed that they were stressed out about their personal finances.
If you don’t know where to start, here are a few steps to help you along your journey to paying for college. Want more? Check out our Guide to Paying for College for important dates, tips, and resources!
Before you accept your financial aid award letter or apply for student loans, it’s important to step back and understand just how much college costs, how much money you and your family can put toward your education, and what the difference, or funding gap, may be.
Create a plan.
Calculate how much you need to borrow for the school year.
To help you understand your budget to help pay for college, check your financial aid award letter for your school’s cost of attendance. This is an estimate from your school, which may include expenses such as:
Remember, every financial aid award letter is slightly different, so be sure to confirm with your school which expenses are included before making any estimates. If financial aid, grants, and scholarships come up short, you may need to find additional ways to cover the cost, such as applying for private student loans like Ascent’s cosigned or non-cosigned loans.
Think of your post-grad lifestyle.
Remember: whatever amount of money you borrow – whether it’s a private student loan or federal – you’ll have to pay it back (except scholarships and grants!). Only borrow what you can afford to pay back post-graduation. You can stay ahead of the game by estimating your starting salary after college with Ascent’s Bright Futures™ Engine, a tool that helps you evaluate the return of your college investment.
Just select your school and major to see how much money you might expect to earn your first year after graduation. This will give you a better idea of how much you can potentially afford to borrow and pay back after college.
Let’s talk about scholarships! When paying for college, it can be valuable to explore scholarship opportunities, in addition to federal or private student loans. Scholarships are free money that you don’t have to pay back, so apply for them early and often (believe it or not, there’s no limit to how many you can apply for!)
Don’t know where to start? Here are a few of our scholarship dos and don’ts to help you navigate this process:
Remember: If you win a scholarship, don’t forget to tell your school. It could affect the amount of financial aid offered to you. Ask your school about their outside scholarship policy so you can prepare for how this could impact you.
Check the mail, check your inbox, and then check out what your prospective college offered you! When your school’s financial aid office sends you an offer, they’ll ask you to specify which financial aid you want. It’s time to look carefully at all your options and make an informed decision when paying for college!
Borrow only what you need.
If you know your living expenses won’t be as high as the amount estimated by your school, you can turn down the loan or request a lower loan amount. To help determine how much money to accept, make a list of your school-related and living expenses, as well as the resources you’ll have available to pay them.
Don’t forget: If you don’t accept the full amount of the loan you’re eligible for, you can increase the amount later.
When grants, scholarships, and federal student loans aren’t enough to cover paying for college, you can turn to private student loans to cover the cost of your education. Private student loans work differently than federal loans, so it’s important to understand what to expect when borrowing from a private lender.
What is a private student loan?
A private student loan is a form of financial aid taken out for college expenses like tuition, fees, and housing. Unlike federal loans, private student loans are funded by banks and other lenders that set their own criteria for their loans.
To qualify for a private student loan, you’ll need to meet the lender’s criteria, which typically considers factors such as creditworthiness, income, school, program, cost of attendance, and other factors.
Tip: If you can’t qualify for a loan in your name for the full amount you need, applying with a creditworthy cosigner might help. Cosigners have an obligation to make payments and be fully responsible for repaying the loan if you default. What’s the advantage? If your cosigner has a higher credit score and verified income, you may qualify for a lower interest rate. P.S. With Ascent, you can check your rates with or without a cosigner without impacting your credit score.
Benefits of private student loans
Private student loans are a great option for you if you need additional support to pay for the upcoming school year. Some benefits of private student loans include:
Whether you’re just getting started with your student loans or you’re savvy at scholarships, financial wellness isn’t a destination – it’s a lifelong journey. Explore money management tips to paying for college and more at AscentStudentLoans.com/Financial-Wellness.