UNDERSTANDING STUDENT LOANS
Many students fund their college degrees largely through student loans. Student loans may be federal loans or private loans. Generally, most college students will be able to take out federal loans regardless of their financial situation (or their family’s finances, in the case of dependent students.)
Federal loans generally offer borrowers low interest rates and flexible repayment options, including income-driven plans and extended payment periods. Private student loans are those borrowed directly from financial institutions. Because these are non-federal loans, they generally don’t offer borrowers the same flexibility or attractive interest rates as their federal counterparts. Private loan borrowers must also have good credit (or have creditworthy cosigners.)
PAYING FOR COLLEGE WITHOUT LOANS
If you are wondering how to pay for college without loans because you don’t want to go into debt to earn your degree, there are other possible funding sources:
Savings: Some students are lucky enough to have either their own savings to draw upon or savings from their parents or grandparents when college tuition bills come due. If you have 529 College Savings Plan assets or other college savings funds, your financial advisor can help you understand how and when it may be most advantageous from a tax standpoint to use those savings to pay for college.
Scholarships and grants: Unlike loans which must eventually be repaid, scholarships and grants are college funds that are essentially gifts to students. Scholarships and grants may be awarded for excellence in academics, sports, music or other achievements, or they may be awarded based on need-based applications. In addition to colleges themselves, many other organizations and institutions award scholarships to college students. Check with your employer, financial institution and local nonprofits to explore possible scholarship opportunities.
Work-study jobs: Your financial aid award letter may include work-study, if you indicated you are open to such opportunities. With a work-study job on your college’s campus, you will have a part-time job at which you earn at least minimum wage. With some colleges, you need to seek and apply for a job, while other schools will assign jobs.
Non-campus employment: Many students choose to pursue off-campus job opportunities. The options are limited only by the local economy. If you are considering looking for a non-work-study job, it is important to make sure your prospective employer understands you are in college and is willing to work around your class/study schedule.
Payment plans: Many colleges’ financial/business offices are also willing to work with students (or their parents) to establish payment plans to spread the cost of college tuition and fees over the course of the year. This can make it easier for some people to pay for college because there is not a need to come up with a single lump-sum payment.
INCREASE YOUR FUTURE EARNINGS WITH A DEGREE FROM GENERATIONS COLLEGE
There is no question: College can be expensive. Thankfully, there are many ways to make college more affordable and accessible. Whether you pay for college entirely through loans or through a combination of the other funding sources identified above, pursuing your degree can improve your employability and increase your future earning potential.
Generations College in Chicago is a private, nonprofit educational institution committed to diversity, academic excellence and a student-centered approach that guides our curriculum, faculty and staff. To learn how affordable it can be to earn your college degree on campus or online, contact Generations College today or call us at (312) 922-1884.