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Perhaps the most important, and at the same time the most overlooked piece of educational planning is financial aid. Teens are often encouraged or required to do several reports in their college aspirations, but often the most critical question of “how” is not addressed. There are many methods of paying for college, and it’s important to understand all available options before selecting the one or ones that best suits your needs.
FAFSA
The importance of filling out FAFSA cannot be understated. It is critically important that this is done on time and in its entirety. FAFSA stands for the Free Application for Student Aid; it is an online form completed by prospective college students each year to determine eligibility for financial aid. It requires a fair amount of information, the majority being financial information (and having to do with parental income, assets, etc.) Filling out this form is critical because it is the only way you are eligible to receive government aid towards tuition and other expenses, and the majority of colleges and independent scholarships require that this form is filled out. Michigan’s application opens October 1st, and the deadline is March 1st. While the process can be confusing, there are a number of online tutorials that can make the process less mysterious, and some questions may be answered by your school counselor.
To access FAFSA, click here:https://studentaid.gov/
To access FAFSA resources, click here: https://www.youtube.com/watch?v=gUis5lityCQ
Grants and Federal Funding
By filling out FAFSA, you are given the opportunity to receive a number of government scholarships and grants, many of them being reserved for students with demonstrated financial need, or academic merit. Grants are a type of financial aid that doesn’t have to be repaid (otherwise known as ‘gift aid'), this distinction is what sets it apart from other government payment programs, which are often government student loans. A number of different forms of ‘gift aid’ are available, the most common one being the PELL grant, which is reserved for students with exceptional financial need. Another available government tuition payment program is a Federal Work-Study Program, which allows students who qualify to be enrolled part time and earn money to pay off tuition expenses. To get a better idea of what you do and don’t qualify for, I would recommend looking at your parents’ Adjusted Gross Income (found in tax returns), for the previous year, and comparing it with the poverty guidelines for the United States. If you fall under, at, or near the poverty line, this will give you a better idea of what programs you will likely qualify for.
More Resources: https://studentaid.gov/understand-aid/types
Poverty Guidelines: https://aspe.hhs.gov/2020-poverty-guidelines
Independent Scholarships
The most tried and true way to pay for colleges is through scholarships, especially through government issued grants such as the PELL grant, or university programs such as the Spartan Advantage (MSU) or the Go Blue Guarantee (U of M). However, both of these require demonstrated financial need, within specific parameters. If you don’t fit into these qualifications, but need extra financial assistance, it can be difficult to know where to turn. This is where independent scholarships become a massive help, whether you need them to cover what is left of your tuition, assist with residential and meal plan expenses, or to cover extra materials like textbooks and other supplies. If you are interested in applying for these scholarships, or you would like more information, you will find the Empowerment Through Education Scholarship Database under the Scholarship Database tab.
Loans
The final option when it comes to paying for college is loans. This is a highly contested method. It should go without saying that this is a method that should only be used if absolutely necessary. If you MUST take out a loan, ask yourself the following questions before you do so: Do you understand the type of loan you are taking out? Is it from the government? Is it subsidized or unsubsidized? What is the interest rate? If you are having trouble answering these questions, seek out a school financial advisor, and/or call around to university banks and credit unions, who give seminars to help students understand student loans. Additionally, it is advisable to only take out loans in small sums. Taking out a number of larger loans can be detrimental, as the costs add up. This brings us to the final piece that inevitable comes with student loans: student debt. To sum this up:
Avoiding student debt:
Try not to take out loans. Many people rely on methods other than loans to pay for tuition, including working, and scholarships. If you are eligible for a works study, this is another excellent option. Additionally, a smart decision is to constantly apply for scholarships and watch for opportunities. Even if you or your parents are financially capable of covering the cost of tuition, financial circumstances are not always promised, and these scholarships can help with other costs, like books, supplies, and other fees.
If you must take out a loan, remember: Read the fine print, make sure it’s a realistic sum, understand what type of loan it is, pay attention to the interest rate, get in touch with a financial aid counselor to consult with you about the loan, and create a plan to pay it off.
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