How to Pay for College

Q: How can I get the money I need for college?

A: The typical college graduate leaves school at the end of four years with an average loan debt of $20,000.

But the landscape has changed. Many credit companies are gone or have tightened their credit and increased their rates dramatically. Some of the largest student loan originators have announced they will reduce lending in the foreseeable future or have stopped lending altogether until the credit crunch subsides.

There are steps that you can take now to get the financing you need for college. Borrowing “smart” can mean the difference between reasonable college debt and insurmountable payments.

Here’s how to build a smart financing package.

  • Assess all your resources. Apply for college scholarships, awards, service prizes—anything to help you get started. Don’t always just go for the “big” dollars. A group of smaller scholarships can build your future just as quickly.
  • Expand your view of college financing. Did you know there are monthly payment programs available at colleges? These plans allow families to pay at least a portion of tuition in monthly increments, which cuts the overall amount you need to finance.
  • Work with a trusted resource. Your college financial aid office or bank are good places to start.
  • Make informed decisions. Understand all the terms as well as the interest rate.
  • Use the least expensive forms of college financing first. Use savings, gifts, scholarships, grants, work study, summer jobs and monthly payment options. Then, federal loans and, only when all those other resources have been tapped out, take out private loans.

Rick Vonk is president of Key Education Resources.

Article by Rick Vonk
Article provided by Next Step Magazine

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