“I love the campus.” “I want a small school.” “College isn’t for me.” When considering their options after high school, many teens have an idea what they’d like to do, but don’t think about the factors that go into such a big decision. College is expensive, but choosing not to attend can be expensive too (in terms of its impact on career opportunities and on your future salary). In this lesson, students will examine options for financing their education, discuss college choices and learn ways to manage their money wisely during their college years.
1 Learning Objectives
• Analyze factors of smart money management during college
• Evaluate the costs and benefits of a student loan
• Discuss how repaying student loans affects future finances
2 College Funding Strategy Video
3 College Funding Concept and Activities
3.1 find Out Net Price of College
It’s a sad reality that most families with teenagers believe that a school’s price tag is priced just like a box of Corn Flakes. That, however, is not how it works in the higher education world. College price tags are largely meaningless. According to federal statistics, about two thirds of college students receive grants that will help them cut the cost of college. Get more financial aid information at the U.S. News Net Price Calculator center.
3.2 Saving for College
It is very important that family start saving for their children’s education as soon as possible. Time is one of your most valuable assets. The sooner you start saving for college, the more time your money will have to grow.
It is less expensive to save for college than to borrow. Either way, you’re setting aside a portion of your income to pay for college. But when you save, the money earns interest, while when you borrow, you’re paying the interest. Paying for college before your child matriculates definitely costs much less than paying for college afterward. Saving $200 a month for ten years at 7% interest would yield $34,818.89. Borrowing the same amount at 6.8% interest with a ten year term would require payments of $400.70 a month.
3.3 Financial Aid
To apply for most financial aid — including federal and state student grants, work-study, and loans — you’ll need to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is available online at FAFSA on the Web. If you need a paper copy, you can download a PDF at www.studentaid.ed.gov/PDFfafsa or call 800-4-FED-AID (433-3243).
A scholarship is an award of financial aid for a student to further his or her education. Scholarships are awarded based upon various criteria, which usually reflect the values and purposes of the donor or founder of the award. Scholarship money is not required to be repaid.
You can learn about scholarships in several ways, including contacting the financial aid office at the school you plan to attend and checking information in a public library or online.
- The financial aid office at a college
- The high school counselor
- the U.S. Department of Labor’s FREE scholarship search tool
- federal agencies
- Your state grant agency
- Your library’s reference section