Making College Affordable | Understanding College Budgeting & Expenses
Determine Your College Expenses
If you have a good handle on your exact
expenses, then your life will be a lot easier. Start by contacting your school
and getting estimates on what it will cost to attend. Colleges generally compute
a figure that includes more than just tuition and fees, taking into account
costs such as textbooks, materials, housing and food. Unless you attend a campus
that does not provide residence halls, there are usually two different sets of
expenses for on-campus and off-campus students. The financial-aid office at your
school determines the amount of financial aid you will be awarded based on the
predetermined college expenses minus your expected family contribution
(EFC).
Budget for College Expenses
Students shouldn’t make the mistake of not
including all of their college expenses when they figure out how much school
will cost. While the college will determine a standard cost of attendance, your
needs may actually be higher. For example, you may need to figure in the cost of
child care or a higher cost of materials in your program of study. To accurately
determine how much money you’ll need to borrow to cover the overall cost of a
college education, look at all of the factors that may have an impact on the
bottom line.
Choose a Less Expensive School
The cost of attendance at your college will
determine how much money you need to borrow. Enrolling at an pricey school when
you know you can’t afford the expense could leave you deep in debt just after
the first year. However, some private schools have excellent financial aid
options and can – depending on your circumstances – be less expensive than
schools with lower price tags. To keep you from getting in over your head
quickly, consider starting your college education at a less expensive school.
For example, a community college can provide a good foundation for the first two
years at a significantly lower cost. Most universities have agreements with a
number of community colleges that allow the credit a student earns during the
first two years to transfer. This could lower the overall cost of your education
and still allow you to get your degree at the university of your choice.
Simplify Expenses to Go Back to School
With a little planning any student
can set herself up with a good financial situation before going to college. If
you already have credit card debt, you should try to get this paid off before
you arrive on campus. In addition, you should simplify your other financial
obligations by downsizing where possible. Try to lower your rent or reduce your
monthly car payments. If you are attending school on a full-time basis, then you
probably won’t have much income during that period. While you can get student
loans and other financial aid to help you pay your expenses, you don’t want to
be in a situation where you are making monthly payments on credit cards or a car
with your loan funds. This will just get you deeper in debt. Be smart and
simplify your financial obligations now.
Know The Impact of College on the Family Budget
Whether you are going to
college or sending your kid off to school, the cost associated with higher
education is substantial for most families and can have a huge impact on the
family budget. You may be able to ease this financial burden by applying for
federal financial aid. Completing the Free Application for Federal Student Aid
(FAFSA) won’t take nearly as much time as you might spend doing your taxes.
Using this one form, your income, assets and other family information is taken
into consideration to determine your financial need. You may not realize that
you are qualified to receive financial aid such as student loans or grants. Even
if you later find that you don’t qualify for aid, you haven’t lost anything by
trying.
Know Your Expected Contribution to the Cost of College
The amount you need
to borrow to cover the cost of your college education may vary based on the
amount the federal government says you can pay and, in reality, how much you
have available. Using the information provided in your Free Application for
Federal Student Aid (FAFSA), the government determines your expected
contribution. That amount is then subtracted from the cost of attendance at your
school. The remaining amount is considered your financial need. Your college
will determine your financial aid package based on the financial information it
receives from you in the FAFSA. On top of subsidized loan funds, your college
may also offer you additional funds through unsubsidized loans in order to cover
the amount you are expected to contribute. You can accept the entire package as
presented by your financial aid office, or reject parts of it. The choice is
yours. Of course, remember that the more you borrow, the more you will need to
repay later.
Control Your Student Loan Debt
For every year that you are in college and
receive a student loan, take the time to review how much you are accumulating in
total debt. Many students don’t do this and simply review the financial aid
package they are awarded from year to year. This is especially true with student
loans that do not require repayment until you leave college. However, all debts
that you accrue while completing your education have to be repaid soon after you
graduate (or drop below a half-time status). Your projected monthly student loan
payment should be figured into your post-college budget.
Help with College Expenses with Work-Study
Determining how you will make
ends meat to cover your college expenses can be quite a challenge. Many students
turn to part-time jobs to help cover these costs. Fortunately, the U.S
government offers financial assistance through federal work-study jobs that are
available only to students. Taking advantage of work study can help you reduce
the overall amount of your student loan debt.
Don’t Let Credit Cards Control Your College Life
All over college campuses
you’re just as likely to see tons of ads offering credit cards for students as
you are to see ivy on the buildings. Be careful that you do not fall into the
credit card trap. Obtaining a credit card can be a great way to establish your
credit history—when handled appropriately. Know the terms of the credit
agreement before you apply. This includes understanding the interest rate and
repayment conditions. When you use your credit card to make a purchase, do not
charge more than you can afford to pay off when that bill comes next month. If
you buy a big-ticket item and plan to make monthly payments until it is paid
off, then be sure to add that monthly payment into your budget. With careful
planning, you can establish an excellent credit history without falling victim
to huge credit card debt.
