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Imagine you’re a high school senior nearing graduation and eyeing the start of your college career. You have the grades to get into a good school but fall short of earning a full scholarship.
However, your parents are well-off and can afford to pay for your schooling, so you always figured money wouldn’t be an issue, right? Until one day they drop the bombshell: College costs will be your responsibility.
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It turns out they have nothing saved up for your education, and suggest that taking out student loans and managing debt will build accountability and financial smarts.
Is that true, or are your parents just throwing you to the wolves?
How to prepare
It’s no secret that college costs in the U.S. are high these days. The average cost for undergraduate students — including books, supplies and living expenses — stands at $38,270 per student each year, according to the Education Data Initiative. Stripped down to tuition alone, the average cost of attending college in-state is $9,750, while out-of-state tuition costs $28,386.
Keep in mind, there are plenty of scholarships that don’t focus on grades or income. Explore receiving awards based on community service, job experience and extracurricular activities to secure extra funding.
Getting a part-time job to chip away at loan costs upfront can also save you money over time. Try to get in as many hours as you can over the summer, and pick up a student job once you get to school. Even if you’re not eligible for a federal work-study, many universities offer traditional part-time roles that can fit around your class and exam schedule.
And if you do need to take out loans, consider opting for federal loans first before private loans, as interest rates are typically lower, and they often don’t require parents to cosign.
Read more: You don’t have to be a millionaire to gain access to this $1B private real estate fund. In fact, you can get started with as little as $10 — here’s how
Conversations about college
Conversations between parents and children about financial expectations for college can help prepare everyone to navigate expenses, and maybe save some family relationships.
Parents should be direct and honest about what help they plan to offer. Talk about what will be contributed, and determine if any of it will be expected to be paid back. Having this conversation ahead of time so everyone can prepare will lessen the strain and stress.
Make sure to ask your parents to help you fill out the FAFSA form. Even if their income disqualifies you from need-based aid, you may still be eligible for federal loans. Plus, it can be beneficial to have a FAFSA application on file if applying for anything else.
Federal student loans also don’t typically cover the whole cost of college — including your housing, food, utilities and more. In order to cover your entire tuition, consider a private student loan to bridge the gap between federal student loans, scholarships and any grants you may receive. College Ave can help you secure a private student loan at the lowest available rate for you.
Plus, it’s easy to apply. You can start the application and choose from a few options, like becoming a borrower as your parents’ dependent.
Parents can also sign on as the guarantor for your student loan. They can be approved with an instant credit decision, and the whole process can be completed in as little as three minutes — a major time-saving bonus considering how much planning, packing and shopping you’ll need to do before September rolls around.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
