Finance - Paying for College

Education Premium

The difference in earnings between the more and less highly educated.

% of people that have their parents pay

39.54% (avg. $1000/month, more than the monthly payment for a new car)

% of people using scholarships and grants

24.95%

% of people using a college savings plan

11%

Overall % of students that receive some kind of financial aid

84%

What is a 529 College Savings Plan?

A tax advantaged way to invest money into a savings account for college, sponsored by the state.

Grants vs. Scholarships

Grants are need based, whereas scholarships are merit based. Grants and scholarships are the best form of financial aid because they don’t have to be repaid.

Subsidized vs. Unsubsidized Loans

For subsidized loans, interest is charged after graduation, whereas for unsubsidized loans, interest is charged to the student while they are in school.

Best type of loans

Federal government loans are better than loans from a private bank/company because they are more flexible in terms of repaying, offering better interest rates since they are not trying to make a profit.

Work study

On campus jobs for students, paid for by the federal government.

FAFSA Form (Free Application for Federal Student Aid)

It is required for federal and state aid as well as many colleges, and it is used to calculate your family’s Expected Family Contribution (EFC). It must be filled out every year you are in college in case that you parents jobs change, etc.

CSS Form

Required by many colleges and scholarship programs that provide their own financial aid.