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Ways To Pay For College Without Breaking The Bank

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Going to college can be stressful in so many ways. If you are just getting out of high school, you are being pushed into the real world on your own. Your responsibilities just increased ten-fold. You now have to get yourself to class everyday, do your homework, study for tests, and maybe even work. As if that is not enough, you also have to worry about how you are going to pay for college.

If you don't have money saved up to pay for tuition, you are basically on your own trying to find out how to pay for it. Luckily, you have quite a few options. College is far from cheap, but if you are wise you can pay for it without totally breaking the bank.

ways-to-pay-for-college

Scholarships

First and foremost, you should apply for scholarships.  Scholarships can come from employers,  schools, religious organizations, or private organizations.  The requirements for them vary; some base qualification on grades and GPA, while others base it on community service or special talents.  Scholarships are granted to those who are selected by the giver, and they do not need to be repaid.  You can read more about scholarships and where to find them here.

Financial Aid

Every school has a financial aid department, which will direct you how to fill out the FAFSA, or Free Application for Federal Student Aid. This form will ask many questions about your household and income, this information will determine how much financial aid you are eligible for. Your award letter will tell you how much you are offered between both grants and student loans. It is very important that you know how to read and understand your award letter, so that you can best decide how much aid you qualify for to accept.

Grants

Federal grants are awarded by the federal government to those with financial need. The amount you qualify for depends on your families household income and how much the government thinks your family can contribute. Grants are

financial aid awards that you do not have to pay back, so long as you complete and earn a percentage of credits attempted. Because you do not have to pay them back, grants are the best option for students to pay for college.  You can also visit the Federal Student Aid website for more information on grants.

There are many different kind of grants that the Federal Government offers. The most common grants are Federal Pell Grants. With Pell Grants you will receive the total amount you are qualified for. However, as of July 1st, 2012 you can only receive the Pell Grant for a total of 12 semesters. There is also the Federal Supplemental Educational Opportunity Grant, or FSEOG. Not all schools offer these types of grants. If your school does administer FSEOG's, you would receive this one first before Pell Grants.

Student Loans

Student loans are a little bit more tricky. You do have to pay these back, and if you aren't careful, you could be paying more than double what you borrow after interest accrues. Did you know that the average college graduate owes about $33,000 in student loans? A lot of people try to steer clear of student loans, but sometimes you have no other choice in order to further your education. If you have already applied for every scholarship and grant you can think of and still need to come up with some money, then you are probably considering student loans.

There are different kinds of student loans- federal and private loans.  It is smart to research what loans you can qualify for, and knowing which is better for you financially.  You will be informed of which loans you qualify for after filling out the FAFSA.  Federal loans can be deferred until you are done with school, meaning you don't have to make payments while enrolled in school.  There are two different types of federal loans: subsidized and unsubsidized.  Your income determines which you qualify for, which decides if your loans start accruing interest right away or when you are done with college.

Private loans would be needed if you have accepted all of your possible financial aid and still have costs left to cover.  You would need to apply with a private lender, such as your personal bank, for a student loan.  These differ from federal loans in a few different ways, so when deciding between Federal Loans Vs. Private Loans be sure to do plenty of research online until you find the sources that are right for you. SimpleTuition.com is a great place to start when looking for info on student loans with both fixed and variable interest rates (source).

Out of Pocket

Aside from scholarships and grants, this is the best choice, if you can swing it.  Of course this is not a realistic option for some.  College tuition definitely is not cheap, but if you can save up money and pay for it out of pocket you will be doing yourself a favor.  By going this route you will pay only the cost of tuition, books, and lab fees.  None of which will include a ridiculously high interest rate.  Especially if you are only attending school part time, so the cost is not too high, paying out of pocket is one of the best options.  If this is something you are seriously considering, you can always put college off for a few years.  You could work and save up money, and go to college when you have enough to pay for it out of pocket.

Paying for college is a scary thing to think about, but hopefully now you realize how many options you have.  Always make sure to do your research and find what the best option is for you and your financial situation.  Regardless of how much money you have, you can find a way to afford an education if it is something that you really want to do.  You don't necessarily need to break the bank to get an education.

How To Avoid Falling Into A Bad Credit Score

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Building good credit is a years-long process, while destroying credit only takes a few bad decisions. With this in mind, it’s important for new credit users to avoid the many mistakes which lead to bad credit scores. Too often it seems inexperienced credit cardholders underestimate the ease through which bad credit can be acquired.

For these folks – the young ones especially – we thought it necessary to highlight the five best ways to avoid a bad credit score:

Maintain A Healthy Debt-To-Income Ratio

Credit score criteria includes something called the debt-to-income ratio. Basically it’s all your monthly debt payments added up and compared to your gross monthly income. If the former makes up more than 25% of the latter, then credit scores are sure to plummet.

Monitor your finances monthly to always know your debt-to-income ratio. That way you won’t let yourself accidentally fall into a ratio which looks unfavorable to creditors and lenders.

Adhere To Due Dates

Okay, we’ll start off by sharing a dirty little secret: one or two credit card payments paid a day or two late typically won’t result in a bad mark appearing on your credit report. But don’t risk it.

Companies that don’t immediately report your late payments to credit monitoring agencies can still do so at anytime, so never, ever neglect the due dates, even if your credit card company has been lenient in the past. Though somewhat hard to incur, one late payment mark on your credit report is enough to knock your score down several points.

Use Regularly, But Also Responsibly

This is probably the trickiest way to both build good credit and avoid destroying it at the same time. Creditors don’t want someone who hoards lines of credit and never uses them as much as they don’t want someone who maxes out their cards and never pays. They want customers who actively use their services responsibly. This is why your score can drop when you don’t use the credit you have. Online credit repair services typically tweet valuable tips and tricks for maintaining and managing responsible credit. Give them a look for some ideas on how to keep a good balance between credit use and paying off debt.

Appreciate The Interest Rate

The annual percentage rate of credit cards is often and unfortunately one of the last things new cardholders consider before accepting an offer for a card.

New credit card users are unlikely to see interest rates below 15% and are probably looking at something closer to 20%. So just think about that. If you spend $1500 with credit and take a year paying it off at $137/month, by the end of the year you’ll have paid around $145 in interest if your APR is 17%. That may not seem like much, but considering the average credit card debt in America is around $16,000 for a one-card household, it’s easy to see how credit card companies make their money and how credit card users can find themselves with a less than impressive credit score.

Increase Your Monthly Payment

The minimum payment imposed by credit card companies is designed to have you paying off your debt for as long as possible. The longer such a situation is allowed to continue the more likely it is you’ll continue to rack up debt without paying it off at the appropriate rate for a responsible debt-to-income ratio. The best way to combat this is to always opt for more than the minimum monthly payment. You’ll beat the interest rate and pay off the debt faster, which both contribute to keeping your credit score strong.

The unfortunate nature of new credit card use is that inexperience with money and spending breeds bad financial decision making. This is turn leads to bad credit, which initiates a vicious cycle of struggle which is difficult to get out of. Avoid it altogether by making sure you do what’s necessary to always maintain a good credit score.