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This type of college funding should be your priority

By Catherine Mueller

June 01, 2020

The most important funding for college is the money that you won't have to repay.

This free funding includes scholarships, grants, employer contributions and gift aid. Of course, there may be requirements (such as maintaining a GPA or taking certain courses) to receive and maintain the funding.

Because you won't have to repay those funds, this should be the type of college funding you seek first. Ultimately, these funds help increase the value of your education - or the return on your investment - since you will be spending and repaying less to get an education and a good career.

If you still need additional money for your education, you should look at all the possible sources of funding, including:

• Scholarships: Look at all the sources of scholarships, including the school you plan to attend, private foundations, community organizations, companies, and religious organizations. In addition, some schools may offer more grants and scholarships to initial students versus returning students. Students should review awards carefully and determine if the grants or scholarships are renewable or a one-time offer.
• Grants: The federal government, and likely your state, offers grants if you meet income eligibility requirements. There may be other requirements, such as an agreement to work in a specified field if you receive the grant.
• Savings: Once you've determined whether you will receive any scholarships or grant aid, you should look to your savings or your family's savings to help pay for your education.
• Current income: If you don't have a lot of savings, many students rely on current income to pay for their education - either their own income and/or their parents' income. Some colleges and universities offer payment plans so you aren't paying a large sum at once, but there may be processing fees. Paying from current income can be a challenge, but it's much better to pay as much as you can now so you don't have to rely on loans.
• Federal or state loans: State and federal loans are good option if you've exhausted all other sources of college funding. They offer many benefits and repayment options. It is important to make sure you are only using the loans to fund your education and not to fund a lifestyle while you are in college.
• Private loans: Private loans can help if you still don't have enough money to pay for your education after considering all the other sources. There are many competitive private loan programs available and your school financial aid office may have a preferred lender list. Remember, however, any type of borrowing should be the last option when considering how to pay for college.
• Work: If you are eligible, you may be able to participate in work-study programs on your campus or look for other types of employment on-campus or off-campus to help fund your education.

If you haven't completed the Free Application for Federal Student Aid (FAFSA) at https://fafsa.gov, be sure to do so right away. If you have already received an award letter from your school and are still in need of additional funds, check with the financial aid office at the school to determine if they have any additional resources or if they can review your current financial situation for additional financial aid.