Education is one of the most important investments in a lifetime whether it is your own college education or that of your children. Education widens opportunities that would not be available otherwise. College education gives an opportunity to get a job, earn a higher salary, get promotion and get a better paying job. College funding comes in different forms. There is no particular source which can pay all your tuition and expenses and ensure you graduate debt-free. It is important therefore to check different sources. It is important to plan for education and related expenses.
Start by applying for federal financial aid if you are in financial need or you come from a low-income family. Fill a Free Application for Federal Student Aid FAFSA form if you meet the requirements. Financial Aid is given in form of grants, scholarships and work-study. There are Pell Grants, TEACH Grant and SMART Grant. Other scholarships are given by colleges and universities, state governments, religious organizations, foundations and private organizations. Universities offer scholarships to attract the best students. There are different types of scholarships merit, award, sports and individual programs.
There are federal loans granted to students and parents. These can be subsidized need-based loans or unsubsidized loans. These loans include Stafford Loans (subsidized or unsubsidized), Perkins Loans, PLUS Loans for parents and PLUS Loans for graduate and professional students. These federal loans bear a fixed rate of interest. Private Loans are offered by banks and other financial lenders and are usually more expensive than federal loans.
Most of colleges and universities are funded by the state government. The community colleges offer training and the motivated students can join university. Most of the universities are state universities many of which are public universities. There are private universities which are privately owned. Students who attend in-state universities pay less than those from other states. This is because they will have contributed towards education by taking taxes directly or through their parents.
The 529 Savings Plans have been an encouragement to students and parents to start saving for college early. There are different 529 Plans in each state with different benefits and tax advantages for each state. You need to check before deciding which saving plan to start investing in and in which state. You can invest in a different state than the one you are residing in but you need to check the benefits. This is because in-state colleges are cheaper than out-state colleges.
College funding is expensive. There is no particular program that can pay for all the tuition, fees, books, supplies, room and board, transport and meals in whole. It is advisable to apply for funds from different sources. It is better to apply for the federal financial aid if you meet the requirements and exhaust federal and state loans first because they are cheaper before applying for private loans. Federal subsidized loans do not accrue interest when the student is in school if he/she has enrolled half-time or more.