If you’re considering college, community college,or trade school as an option after high school, this guide will answer your most pressing financial questions:
- Is education a good investment for you?
- What types of financial aid are available?
- Should you take out student loans?
- How does the FAFSA application work?
- What should you do to prepare for college?
If you’re looking for helpful tips, information, and lists to guide you through the financial aspects of your post-high school education, this guide is for you!
Table of Contents
Everything You Need To Know About Financing College
- Should You Invest In College?
- What Is The “Right” Way To Do College?
- College Alternatives
- Grants: What Are They And How Can You Apply For The
- Scholarships: What Are They And How To Apply For Them
- Types Of Scholarships
- How To Find And Apply For Scholarship
- Work-Study Programs: What Are They And How Do They Work
- Student Loans
- Should You Or Shouldn’t You?
- Types Of Student Loans
- 5 More Ways To Lower The Cost Of College
- What Is FAFSA And Why Does It Matter To College Students?
- Why Everyone Should Submit A FAFSA
- How FAFSA works
- FAFSA Checklist
- FAFSA Deadlines
- Should You Submit Early?
- What Happens After You Submit FAFSA
We’re often told that education is the backbone of financial success. Many of us have learned that the more schooling you get, the more successful you’ll become.
People with degrees make a lot more money — right?
Let’s take a closer look at that theory.
Do People With College Degrees Make More Money?
Earning a college degree may help you earn a higher income, however, without a solid financial education and disciplined spending habits, you can still end up broke.
To understand financial success versus failure, let’s take a look at how a college education affects income and success in America.
Americans are now more educated than at any point in history.
- Of those Americans who filed their taxes as “head of household”:
- In 1989, 23% had a four-year degree.
- By 2016, 34% had a four-year degree.
- By 2019, 36% of Americans over the age of 24 held a college degree — more than at any time in history.
People with a college education ARE likely to earn a higher income.
Let’s take a look at the average income and net worth of people with degrees compared to those without degrees:
Second-generation (or more) college graduates:
- Average income: $118,000
- Average net worth of $298,000
First-generation college graduates:
- Average income $95,000
- Average net worth $214,000
When a parent(s) holds a college degree, but the adult child does not:
- Average income: $60,000
- Average net worth: $77,000
No degree in either generation:
- Average income: $44,000
- Average net worth: $41,000
Not only does a college degree give you an edge when it comes to earning potential, but it’s also likely to increase the income of your children and grandchildren.
Children with a college-degreed parent in the household who earn at least a bachelor's degree are likely to build seven times more wealth than those who come from families without degrees.
Please note: If you don’t come from a college-educated household, your income is not limited to these statistics!
Remember, only you create your future — many of today’s millionaires and billionaires (such as Bill Gates, Mark Zuckerberg, and Ralph Loren) have no college degree.
Despite The Advantages, Americans Are Not Succeeding Financially.
Even though statistics tell us that people with college degrees earn higher salaries and that more people are educated than ever before,the average American’s financial health is pretty dim.
In 2019, even before the pandemic’s devastating financial impact on the U.S., most Americans were already broke.
According to a report by Financial News Network, in 2019:
- 70% of American adults struggled financially.
- 20% of people earning between $30k – $100k spent more than what they made.
- 17% were financially vulnerable (struggling to meet all aspects of their finances).
- Only 30% were considered “financially healthy.”
When the pandemic arrived in the United States, 22 million people lost their jobs within the first few months.
By June of 2020, the employment-population ratio reached 54.6%.
Financially stable households have at least six months of living expenses set aside in case of emergencies (such as a pandemic). Still, more than half of those who lost jobs during 2020 were financially devastated.
In households where at least one person lost a job,55% used credit cards to get by, and 29% borrowed money from friends or family.
Despite the growing education rate, many degree holders don’t have the financial education needed to thrive, so they end up broke.
Yet, some of the most successful people in the world have built empires without ever completing their college education because they excel at money management.
While education can be a positive step toward your life goals, learning to manage money is the most critical tool you need to build a financially successful future.
Should You Invest In College?
Investing in a college education is a serious commitment of your time and money. Is it worth it?
- Spending $100,000 on a degree that will get you a $40,000/year job: not worth it!
- Spending $25,000 on a degree that will get you a $100,000/year job: worth it!
For example, if you are passionate about becoming a doctor, attorney, or engineer, a college degree(s) is required, and the income reflects that.
Doctors, lawyers, and engineers earn enough money to make the cost of their degrees worthwhile.
Our society relies on these professions, so if you have the drive, determination, and hustle it takes to get one of these degrees, college is probably a good investment for you.
But what if you want to become an entrepreneur or business person? You don’t have to have a degree to start a business. Is college a smart investment for you?
The answer is YES. If you approach college with the right mindset, a college education can be an excellent investment into your future as an entrepreneur or business person.
What Is The “Right” Mindset For College?
No matter what your career path, if you’re going to college just so that you can make more money, then you’re approaching it the wrong way — and you’re likely to end up broke.
Or, if you’re using college to procrastinate on finding a job or choosing a specialty, you’re also headed for trouble.
Going to college for the wrong reasons can be a costly mistake that may compromise your financial health for decades.
Going to college so you can learn and capitalize on opportunities is the right way to approach higher education.
If you’re going to college with a passion for learning, a desire to meet like-minded people, and an interest in capitalizing on business opportunities, then you’ve got the right mindset.
In college, you can surround yourself with like-minded people. This gives you the chance to build a network of people who have unlimited potential.
College connections often last a lifetime, and your college network will likely become your future friends, colleagues, and customers. The connections you make in college can be as valuable, sometimes even more valuable, as the education itself.
If you are a future entrepreneur, you can use your college years to develop a business, test your products, and even find a potential business partner.
To some, launching a startup while in college sounds far-fetched. Many people have done it successfully, though, such as the folks who started these companies:
- Time Magazine
Did you know? Bill Gates didn’t drop out of college to build Microsoft. Instead, he took a leave to start the company, which left him an opening to return if the business didn’t work out. He formally dropped out of Harvard only after knowing that Microsoft would succeed.
Right Versus Wrong Way To Approach College
The wrong way to approach college:
- Use it as a way to procrastinate on getting a job. Procrastinating doesn’t lead to success, no matter how you frame it.
- Do it for the money. Without a passion for learning, you won't get enough out of your education to make it profitable.
- Go into it half-committed. Without the drive and determination to complete your degree, it’s unlikely you’ll finish. You could end up trying to pay off a mountain of debt while earning minimum wage.
- Isolate yourself and miss out on the opportunity to build a network of like-minded people. In nearly every profession, you and your pocketbook will benefit from your social connections. College is the chance of a lifetime when it comes to building a business-social foundation.
The right way to approach college:
- Enter with a passion for learning about your specialty.
- Build a network of people that you will carry forward into your after-college life.
- Entrepreneurs and business people: Test your ideas, start a business, and connect with potential partners.
If you’re not ready to approach college with the right mindset, there are many other ways to pursue your interests, get an education, and build a career.
If you’re passionate about your future but not sure if college is right for you, there are many other ways to get an education, such as:
- Taking online classes and courses
- Auditing college courses
- Getting a certification
- Attending a trade school
- Getting an internship
- Hanging out with brilliant, creative people
Investor and business tycoon Warren Buffett (net worth: 85 billion dollars) holds both a Bachelor’s and Master's degree, but neither hangs on his office wall today.
If you were to walk into Buffett’s office, you would see only one educational certificate hanging on his wall; his diploma from Dale Carnegie’s communication course, which is the one he says changed his life the most.
If you have drive, hustle, commitment, and consistency, then one of the biggest factors that determines your success is education.
However, working in your dream career and earning an excellent salary doesn’t mean that you’ll become a success.
Success in life is equally determined by your ability to manage finances in a way that ensures the potential for health and happiness throughout your lifetime.
When people earn a lot of money but don’t know how to manage it, they often end up going broke.
Yet, many people who earn average or below-average incomes manage to build wealth — despite their limitations — because they understand how to use money to their advantage.
College tuition is expensive, and while parents often kick in about 30% of the costs, the average student is responsible for most of their tuition, books, and living expenses.
The price of attending college has tripled in the last twenty years, and the average cost is currently $35,720 per student per year.
According to a 2021 report by Educationdata.org, when you factor student loan interest and loss-of-income into college costs, the actual price of a Bachelor’s degree is more than $400,000.
The rising costs of getting a college education, paired with the fact that students mostly pay their own way, can seem incredibly daunting to high school students, many of whom barely make minimum wage.
Fortunately, there are many ways to reduce the price of college so that your education doesn’t create a long-term hardship for you or your family.
If you have a passion for learning and the drive, hustle, and determination it takes to complete a college degree, there are numerous grants, scholarships, and loans waiting for people just like you.
There are several ways to reduce and pay for your college education:
- Work-study programs
- Lower your overall costs
Let’s dive into the different types of financial assistance and other ways to lower the costs of college.
Grants: What Are They And How Can You Apply For Them
During the 2019-20 school year, undergraduate and graduate students, collectively, received more than 140 billion dollars* in grant money.
What are Grants?
Grants are free money that you can use for your college tuition or other school-related expenses.
Most grants do not have to be paid back, except in certain circumstances, such as if your income increases or you drop out of a program.
Grants are available from several sources, including the Federal government, State government, private organizations, and your college or university.
The federal government provides several need-based grants.
Most financial aid programs require that you reapply each year and make satisfactory academic progress while carrying enough classes to keep moving forward on your degree.
All Federal assistance, including grants, is applied for by submitting a Free Application for Student Financial Aid (FASFA), which we cover in chapter three of this guide.
Here are some of the most common grants available to college students:
The most common grant is the Pell Grant, which may award up to $6,495 per year per student. The Pell Grant can be used to pay for tuition, room and board, and other college-related expenses.The Pell Grant is given to undergraduate students with exceptional financial need. The amount you receive is based on several factors, such as your financial situation and the tuition costs at your school.How to apply for a Pell Grant: Submit your FAFSA.
Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG is a need-based grant that awards up to $4,000 per year. Each school receives an allotment of FSEOG funds that they award to students with the greatest need, based on eligibility and other factors. To learn more about how your college determines who will get FSEOG funds, contact their financial aid office.Once the school’s FSEOG money is awarded to students, there is no more left for the entire year. Submitting your FAFSA early may give you a better chance of receiving the grant.How to apply for FSEOG money: Submit your FAFSA and contact your school’s student aid office.
Teacher Education Assistance for College and Higher Education — TEACH Grant (not available through all schools)
The TEACH Grant is given to students in the education field who are willing to teach at a high-need school for at least four years after graduating college. These grants provide up to $3,764 in funding (amount subject to change per school year).How to apply for a TEACH grant: In addition to submitting your FAFSA, the TEACH grant has several requirements and commitments. Please visit the Student Aid TEACH grant page for full details on what’s required and how to apply.
Iraq and Afghanistan Service Grant
The Service Grant is given to students who are not eligible for the Pell Grant and who also lost a parent in active duty military service after 9/11. These grants provide up to $5,829.50 in funding (amount subject to change per school year).How to apply for an Iraq and Afghanistan Service Grant: Submit a FAFSA. Please visit the Student Aid Iraq and Afghanistan Service Grant page for full details.
Other grants may be available through your state or local community organizations.
Finding grants that you may be eligible for can be a challenge.
You can Google for grants in your state or community, but then you have to weed through hundreds of commercial websites and scammers trying to get money or personal information from you.
To search for additional college grants, we recommend consulting with your college’s financial aid office.
Scholarships: What Are They And How To Apply For Them
Scholarships are monetary gifts that don’t have to be repaid. This makes them an excellent way to reduce the costs of your college tuition or expenses.
Scholarships aren’t just for high-achieving academic students.
Scholarships are also based on need, personal background, writing skills, hobbies, community involvement, or something entirely unexpected and random (like duct tape fashion design).
For example, Duck Brand offers more than $20,000 in cash scholarships to high school students who make the best prom attire out of duct tape.
While your FAFSA does not solicit scholarships for you, many scholarship opportunities request FAFSA information as part of their process.
Types Of Scholarships
There are countless college scholarships awarded based on nearly anything that distinguishes you.
Some of the most common types of scholarships are:
- Academic scholarships, such as the National Merit Scholarship are given to students with outstanding transcripts or test scores.
- Athletic scholarships, such as NJCAA Scholarship opportunities and the Foot Locker Scholar Athletes Program, are given to people who excel at sports. In many cases, scholarship regulations require that you excel at both sports and academics. Football is the most common type of athletic scholarship for men, but only 1 out of 43 high school athletes are awarded scholarships. Basketball is the most common athletic scholarship for women, with the same odds as mens’ football — 43:1.While many people think of athletic scholarships as a free ride, the truth is that many of them only contribute to a portion of the funding you need to get through college. The average sports scholarship provides only about $10,400 per year, and isn’t guaranteed to renew after your first year of college. You must meet specific academic and sports requirements to get your scholarship renewed each subsequent year.Only a handful of sports, known as “head count sports,” provide full scholarships. Head count sports are sports in which scholarships are limited to a specific number of athletes, and the funds cannot be divided.Head count sports include men’s football for the Football Bowl Subdivision (formerly called “Division IA”), Division I men’s and women’s tennis, women’s gymnastics, and Division I Women’s Volleyball. Other sports, such as any Division I sport not listed above plus NCAA Division II sports, junior college sports, and others, offer partial scholarships.To learn more about college sports scholarships, visit Athnet or Sport-scholarships.
- Community service scholarships, such as the Prudential Spirit of Community Awards and the Lawrence University Community Service Scholarship, are awarded to people who make outstanding contributions to their communities.
- Diversity and identity scholarships, such as the National Achievement Scholarship and the Hispanic Scholarship Fund, exist to support traditionally underrepresented students. Some programs, such as the Gates Millennium Scholars Program, look for students in specific fields who also demonstrate outstanding academic achievement.
- Essay scholarships, such as the You Will Be Found, and Association for Women in Mathematicsscholarships, allow you to apply for college funds based on your written work. Some essay scholarships are determined by the quality of your story or ideas. Others are awarded based on the quality of your writing.Try Google searching, consulting with your financial aid office, or visiting scholarships.com to learn what essay scholarships are available and how you can apply for them.
- Music scholarships are available to students who excel in music education or performance. Some are competition-based, while others are determined by musical talent.If you think you might qualify for a music scholarship, don’t stop your research at college financial aid offices.Make sure to visitThe ASCAP Foundation and the National Association for Music Education to learn about music scholarships.
Other scholarships exist in several more categories, based on your:
- LGBTQ status
- Military background
- Personal history
How To Find And Apply For Scholarships
Here are some steps you can take to find out what scholarships are available and how you can apply for them:
- Consult with your college’s financial aid office.
- Visit StudentAid.gov for tips on how to research scholarships and avoid scams.
- Use the U.S. Department of Labor’s online scholarship search tool.
- Browse the directory on scholarships.com.
- Browse the websites of industry organizations, non-profits, and companies that support your passions, interests, and history to uncover scholarships within that industry or interest.
Warning: Beware of scammers when searching for any type of college financial aid. Make sure any offers are legitimate. You shouldn’t pay any money to view or apply for scholarships. Please visit StudentAid.gov for more details on how to avoid scholarship scams.
Scholarships provide free money to college students based on what sets them apart. While some are need-based, others are based on achievement, competition, identity, contributions, or personal history.
Work-Study Programs: What Are They And How Do They Work
Work-study programs are a type of federal assistance you have to earn through a part-time job while attending college.
Work-study jobs (WSJ) help pay your expenses (not tuition) and may be on- or off-campus. They are different from other jobs because:
- Your earnings are paid to you by the school.
- There is a limit on how many hours you can work at your work-study job.
- Many pay only minimum wage.
- The income you earn from your WSJ is exempt from the income you claim on your FAFSA.
While the FAFSA exemption is a nice perk, students should think carefully before agreeing to a work-study program.
If your WSJ is also an internship opportunity within your field, it could give you an advantage.
However, if you are a business major or entrepreneur, you may want to focus on earning more money in less time instead of taking a work-study job for minimum wage.
For example, if a part-time job pays you $10 an hour and you work twenty hours per week, that means you’ll have to work 80 hours a month to earn roughly $800.
Other ways to earn $800 per month:
- Take an entry-level remote job for $20 an hour and work half the hours to make the same pay.
- Start a small business and sell 160 widgets per month at a $5 profit.
- Provide handyman, painting, cleaning, or other household services to local residents for $20 – $75 per hour and work a fraction of the hours you’d have to work to earn the same wages from a WSJ.
Keep in mind that if you’re receiving grants and scholarships based on financial need, earning money through a non-WSJ side gig may lower the amount of college assistance you’re able to receive.
Before you check the work-study box on your FAFSA, review your circumstances and do the math to determine whether a WSJ will truly benefit you.
In many cases, financial aid does not cover the entire cost of college tuition and living expenses. There are many loans available that can help you bridge the gap, but how can you determine whether borrowing is a good choice for you?
Should You Or Shouldn’t You?
Many institutions make it super easy to get loans that will help pay for college.
Loans are not free money, though. You have to pay them back, with interest, and should be very cautious about taking them.
If you cannot keep up with your loan payments after graduating, penalties can be severe enough to keep you in debt for 15-20 years or more.
Some information may lead you to believe that you can apply for loan forgiveness if you get in a bind. The truth is that almost no one is granted loan forgiveness.
For example, in 2018:
- 41,221 people requested student loan forgiveness, but only 206 were granted it.
Another misleading “perk” of student loans is the option to put your payments on a sliding fee plan, so you pay less if you’re making less.
Unfortunately, these pay-what-you-can-afford programs are not as helpful as they seem. Because of the way interest works on student loans, many of them can land you in debt for tens of thousands of dollars more than you originally borrowed.
In most cases, even Bankruptcy cannot discharge student loans, thanks to a 2005 law, the Bankruptcy Abuse Prevention and Consumer Protection Act. The law disallows any student loan (private or federal) from being written off in bankruptcy unless the borrower can prove that payments would cause undue hardship (a term that Congress has not even defined).
This law made student loans similar to criminal fines and child support debt that are nearly impossible to discharge.
Many people end up in debt well into their 40’s and beyond due to poor choices surrounding their student loans.
For example, Twitter is filled with complaints from students who took out loans for college that put them deep in debt for years:
- @lacymjohnson writes that she took out $70k in student loans, and after paying off $60k over 11years, she still owes $70,000.
- @saturnineba said his $120k in loan debt grew to $137k over seven years, despite never missing a payment.
- @progress4thewin writes “When I graduated high school I had $0 in #debt. I now owe over $70K, nearly double what I borrowed for my bachelor's degree. I can't buy a home, or save for #retirement, or afford US #medical care, or start a #business or #literacy org, or save for my daughter's #future.”
So, yes, it does seem like “everybody’s doing it,” but if you want to build wealth throughout your lifetime, then you should approach student loans more carefully than other people.
Before you apply for student loans, ask yourself these questions:
- Will my degree qualify me to get a job that allows me to make double payments on my student loans?Making double payments is the cheapest, quickest way to pay off your loans. It helps you get the interest paid off early so that you’re contributing to the principal loan amount instead of endlessly accruing more interest.
- Is there another way to cover my college costs? Can you find additional grants or scholarships to cover your expenses? Can you earn enough money in the summertime to fill in the gaps, or perhaps start a business that will help fund your college expenses?
- Would it make more sense to attend half-time and work half-time to pay for college as I go through it? If you can do this, you’ll have your degree and be debt-free in eight years. The average amount of time people take to pay off their student loans is twenty years. Even though an eight-year plan takes more time, you would end up twelve years ahead of the average person by paying as you go.
Types Of Student Loans
If you decide to take out student loans to cover college costs, there are several options available.
Federal student loans are funded through the U.S. Department of Education.
Federal student loans usually charge lower interest rates than private loans, and many of them don’t require a credit check or cosigner.
With Federal loans, you don’t need to start making payments until after you finish college.
There are four types of Federal loans available:
- Direct subsidized loans are for undergraduate students with financial need.
- Direct unsubsidized loans are not based on financial need. They are offered to eligible undergraduate, graduate, and professional students.
- Direct PLUS loans are available to parents of undergraduate students to help fill the gap for what’s not covered by other financial aid. These loans are not based on need, but do require a credit check and carry certain credit requirements. Graduate and professional students may apply for Direct PLUS loans on their own.
- Direct consolidation loans combine all of your federal student loans into one.
Undergraduate students can borrow a maximum of $5,500 – $12,500 per year in direct subsidized loans and direct unsubsidized loans, depending on their circumstances and dependency status.
Graduate and professional students can borrow up to $20,500 per year.
Each loan comes with its own set of requirements and commitments.
Please visit the studentaid.gov website and thoroughly read through the details of each loan program before you decide whether to apply.
You can apply for federal student loans by submitting your FAFSA.
Private loans through banks, credit unions, and other financial institutions are also available, but most do not offer the same perks as federal loans.
For example, many private loans carry higher interest rates or require you to begin making payments while you’re still in college, and are usually not flexible with payment plans.
The amount you can borrow for private student loans is limited to the cost of attending college after any other aid you received. Your eligibility and final loan amount varies by lender, usually depending on your ability to repay, based on your monthly income.
Most college students have very little income and credit history, so a co-signer is typically required to secure private student loans. A co-signer is a person who agrees to pay the loan back if you default, and their credit rating can be significantly damaged if you fail to make payments on time.
Student loans can help you fill the gap between what college costs and how much you receive from other financial aid programs such as grants and scholarships.
However, loans are not free money.
Student loans can be difficult to pay off after you get out of college, and many people end up in debt for decades.
Loans can result in you having to put off meaningful life experiences such as buying a home or taking family vacations, because you’re buried in thousands of dollars of debt before you even get your first job out of school.
Before you consider taking out student loans, look for other ways to pay for your college education. Also, consider whether your degree will help you earn enough income to pay off your loans early (or at least on time).
If you decide to take out student loans, please read through the fine print carefully to ensure that you understand what you’re agreeing to.
5 More Ways To Lower The Cost Of College
One of the simplest ways to reduce the price of your college education is to cut some of the expenses typically related to higher education.
These reductions can add up to as much money as you might receive from a grant or scholarship.
#1 – Choose An Affordable College
Even with financial aid, the cost of tuition, fees, and housing can quickly overwhelm many individual and family budgets.
The good news is that you don’t have to skip college because of high tuition costs. Instead, you can opt to attend a less-expensive college or community college, often for a fraction of the price.
According to a report by The Princeton Review, the average price for tuition and fees at a public two-year college is only $3,440 per year (compared to $35,720 at a four-year college).
You can also opt to get your basic courses out of the way at a community college before moving on to your preferred school.
Spending your first two years at a public college (or any less-expensive college) before moving on to your preferred school could save you a small fortune.
Be sure to check with both colleges to ensure that the credits you take at your local college will transfer and apply toward your degree when you transfer to your preferred college.
#2 – Buy Used Books
According to a report by U.S. News, the typical undergraduate student spends about $1,240 on college books every year.
Fortunately, you can dramatically cut the cost of books by buying them used or renting them:
Chegg Books provides college textbook rentals that can save you up to 90% off standard prices. Their rental books come with a 21-day return policy in case you drop or switch classes at the beginning of the semester.
Campus Books carries a wide selection of used, discounted textbooks that you can sell back to them at the end of the year.
Thrift Books provides a selection of deeply discounted books and college textbooks.
For example, the standard college music theory textbook is Tonal Harmony by Stefan Kostka Dorothy Payne and Byron Almen, published by McGraw-Hill.
Here’s an example of how the price changes depending on where you buy or rent it:
Tonal Harmony, 8th edition:
- Brand new hard copy: $197
- Brand new loose-leaf, 3-ring binder version: $148
- eBook purchase (lifetime): $80
- Used, good condition: $72
- One-semester (130 days) rental: $30
Amazon also provides college textbooks in new and used condition, as well as rentals.
TIP: Visit the Bookfinder database to search for the best prices on new, used, and rented college textbooks.
#3 – Find Tuition Discounts
According to StudentAid.gov, many colleges provide discounts you should look into if any of the following apply to your situation:
- One of your parents attended the same college (child of alumnus/alumna)
- One of your family members is attending the same school at the same time
- You hold a critical volunteer position at your college, such as:
- Student government leader
- College newspaper editor
- Yearbook editor
- The main wage earner in your family is unemployed
- A family member works at the school
- You work at the school
#4 – Cut Your Living Expenses
Where you live, shop, and eat has a significant impact on your college living expenses. Some of the ways you can cut your living expenses include:
- Live at home
- Live with roommates
- Avoid habitual eating out
- Avoid spending money on alcohol
- Carpool or take public transportation if you live off-campus
When you do spend money, try not to pay full price for anything.
For example, when furnishing your dorm or apartment, take advantage of the low price of used furniture and dishes.
Nearly everything you need to furnish your living space can be purchased for a fraction of the retail price from places like Facebook Marketplace, garage & estate sales, or independent thrift stores.
#5 – Take Advantage Of Student Discounts
College students are eligible for a truckload of special discounts. Watch for or ask about discounts wherever you spend money. Here are a few students discounts to get you started:
- Mobile phone plans such as Verizon Student Discount
- Online media subscriptions such as Hulu, AppleTV, YouTube Premium, Spotify Premium
- Discount sites such as Groupon Select Student Program
- Retail store student discounts such as Best Buy’s college student deals and Nike student discount
- Electronic purchases, such as Lenovo Student Discount Laptops
- Product, service, and membership discounts on Amazon Prime Student
- Restaurant discounts for college students
By applying for student aid and reducing your cost of living, you can significantly lower the costs of college.
Take advantage of assistance and discounts before you consider taking out student loans.
College is a serious investment into your future that will affect your family for generations.
Fortunately, there is a great deal of financial support for people who are determined to get an education and who are willing to sacrifice to make it happen.
Applying for financial assistance for college begins with the Free Application for Federal Student Aid, otherwise known as FAFSA.
In this section, we explain what FAFSA is, why it matters, and how it works.
We’ve also included instructions on how to and when to fill out and submit your application.
Please note: The instructions below are meant to help you prepare to fill out and submit your FAFSA. Please confirm all deadlines, regulations, and policies (which can change at any time), by reading the detailed instructions provided by FAFSA before filling out your application.
What Is FAFSA And Why Does It Matter To College Students?
The Free Application for Federal Student Aid (FAFSA) is the first step in paying for your college education.
FAFSA is an in-depth application used by the Department of Education to determine your eligibility for federal student financial aid for college, including:
- Federal grants (such as the PELL grant)
- Work-study programs
- Federal student loans (such as STAFFORD loans)
Many, but not all, scholarships and state-level assistance programs also rely on the FAFSA to determine your eligibility.
Some merit and talent scholarships won't even consider you until you’ve submitted a FAFSA, so it’s important that everyone fill one out.
Why Everyone Should Submit A FAFSA
Everyone planning to attend undergraduate or graduate college programs should fill out a FAFSA.
No matter what your financial situation, you will most likely get some type of assistance from the Federal Government if you submit a FAFSA.
How FAFSA works
This Federal assistance can be used to pay for school and related expenses, including:
- Room & board
- School supplies
To receive any type of assistance from the Federal government, you must complete a FAFSA and submit it by 11:59 p.m. Central time (CT) on June 30, 2021, to be considered for the 2021-22 school year.
States and individual colleges set their own deadlines. You can find your state’s FAFSA deadlines by visiting the FAFSA website’s deadline page.
After you fill out the FAFSA form and submit all the required documents, you may receive a Student Aid Report (SAR) asking you to review and confirm all the data you submitted.
Shortly after (usually within a week) you correct or confirm your application data, that same SAR will reveal your Expected Family Contribution, otherwise known as EFC.
The EFC gives you an idea of how much Federal assistance you’re eligible for, but you won’t know for certain how much you’ll get until you hear from the college(s) itself.
You’ll receive the full details of your financial aid package in an award letter sent by the college(s) you get accepted to that were listed on your FAFSA.
This letter only comes after you’ve received your acceptance letter from the college(s) or school.
Unfortunately, the timing of your award letter, or “aid offer,” varies from school to school and may not arrive until immediately before your semester begins. To find out when your school sends out award letters, contact their financial aid office.
The FAFSA is an in-depth application that requires information about your and/or your parents’ financial situation.
It is a FREE application, and you will not be charged to open an account or to submit your application.
You do not have to fill out your FAFSA all at once. If you don’t have everything you need, or if you need to take a break, you can save your application and return to finish it later.
How To Open A FAFSA Account
Before you can fill out a FAFSA, you need to create a free account to get your FSA ID number.
You’ll need the following information to open a FAFSA account:
- Your Social Security number
- Your mobile phone number and/or email address
After you open your FAFSA account (or sign in to your existing account), you can fill out your application by using any one of the following:
- FAFSA on the Web using your desktop or mobile device (recommended)
- Electronic application through a school
- Hard copy versions are no longer available, but if you need a printable (PDF) or another type of version, call the help number 1-800-433-3243.
How To Prepare To Fill Out The FAFSA
Below is a list of documents and information you should have ready before you fill out your application.
If you’re a dependent student, your parents will also need to provide the following:
_____ Drivers license number, if you have one
_____ Social security number
_____ Federal income tax returns, W-2s, and any other records of money earned.
(You may be able to transfer your federal tax return information over to your FAFSA by using a tool called the IRS Data Retrieval Tool)
According to the U.S. Department of Education, you should use your 2019 tax records to fill out your 2021-22 FAFSA.
_____ Asset records
Includes cash, savings, and checking account balances, plus records of investments such as stocks, bonds, and real estate (not your home) if applicable (current amounts as of the date you sign the FAFSA *not* 2019).
_____ Records of untaxed income, if applicable
(From 2019 for the 2021-22 school year)
Untaxed income includes sources such as child support, interest, and veterans’ noneducation benefits.
_____ Your non-citizen identification number, if you aren’t a U.S. citizen
_____ List of schools you’re interested in attending
You can list up to ten schools on your FAFSA (if you need more, visit this FAFSA link).
Be sure to list all the schools you might possibly attend. FAFSA sends the information to the schools you list, who receive it within days of your submission. If you have to add another school later, it can delay the process and cause you to miss out on any first-come, first-served aid.
The order in which you list your schools may be important.
Federal assistance doesn’t care what order you list your schools in on the form. Some state colleges, however, may require that you list colleges in a specific order.
If you have questions or need help with your FAFSA, you can get assistance at fafsa.gov or by calling 1-800-FED-AID (1-800-433-3243).
For the 2021-22 school year: submit your FAFSA no later than 11:59 p.m. Central time (CT) on June 30, 2022.
For the following school year: Typically, FAFSA can be submitted as early as October 1st of the prior school year or as late as June 30th of the following year.
For example, if you’re planning on attending during the 2022-23 school year and FAFSA follows its traditional timeline, you could submit your application as early as October 1, 2021, or as late as June 30, 2023.
Please visit the FAFSA application deadlines page to confirm the submission dates for your school year.
Should You Submit Your FAFSA As Early As Possible?
Submitting your application earlier is often better, but not always.
Federal government assistance isn’t determined by when you submit your application. However, the earlier you file, the earlier you’ll find out your Expected Family Contribution, which may be helpful.
In some states, assistance is determined on a first-come, first-served system.
Many state programs that rely on FAFSA data have limited funds and aid may be determined on a first-come, first-served basis.
If your state operates on a first-come, first-served basis, submitting your application on the earliest possible date (October 1) may give you a significant advantage.
Not all states award aid on a first-come, first-served system.
In some cases, and depending on your financial situation, you may gain an advantage by waiting to file until you can demonstrate the most need.
To find out how your state programs work and discover the best time to file for assistance, contact your school’s financial aid office or your state aid administrator.
What Happens After You Submit FAFSA
Below are the steps you’ll go through when applying for college assistance using the FAFSA.
Step 1: Fill out and submit your FAFSA form and any required documents.
Step 2: Wait to receive your SAR (Student Aid Report), which will arrive between 3 days – 3 weeks of when you submitted your application.
The SAR is a summary of the data you submitted on your FAFSA.
As soon as you receive your SAR, you should review all the information to ensure that it’s accurate, and log into your account to make corrections or verify your information.
Step 3: After verifying your data, wait a few days, then check your financial aid status online. Your SAR will show your Expected Family Contribution (EFC), which gives you a rough idea of how much aid you’re eligible to receive.
Step 4: Watch for your award letters. If you’ve been accepted to any of the colleges or schools listed on your FAFSA, the school will send you an award letter explaining how much aid you’re eligible to receive.
According to FAFSA, the “timing of the aid offer varies from school to school and could be as early as winter (awarding for the fall) or as late as immediately before you start school.”
Submitting your FAFSA requires quite a few details and documents, but it’s a massive time-saver, since you only have to fill out one application to apply for multiple sources of financial aid.
The Free Application for Student Financial Assistance is your first step in preparing to fund your college tuition, fees, and expenses.
Once complete, it can help you gain access to Federal, State, and college-level grants, scholarships, loans, and work-study programs that can dramatically reduce the costs of your college education.
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Position yourself for better scholarships and financial assistance by following these steps during your junior year of high school.
Improve your chances of receiving college scholarships
- Practice and study for the SAT or ACT test.
The SAT and ACT are standardized tests used for college admission purposes. Most students take one or the other, and you can ask your high school advisor for information on what they think might be the better test for you.
Getting a high score on the SAT or ACT means you may be more likely to get accepted into the college(s) of your choice.
Scoring high on either of these tests may give you an edge when it comes to financing your college education, since the scores also used to determine the recipients of many merit-based scholarships.
You can practice for the official SAT online for free at Khan Academy.
- Take advantage of the SAT prep test, called the “PSAT,” in October.
The PSAT is a good way to practice for the SAT, plus it gives you an idea of what to expect on the actual testing day. Your high school advisor can provide you with information on when and where the testing takes place.These test results don’t go to any colleges, so you don’t have to worry about getting a low score.
If you do exceptionally well, though, you may get qualified for the National Merit Scholarship or contacted by college recruiters.
- Get good grades. A high GPA score and your class ranking can go a long way toward securing financial assistance, such as scholarships, for college.
- Improve your essay skills. Brush up on your skills and learn how to write a solid college admissions essay to improve your chances of securing scholarships.
- Volunteer in your community. Volunteer work may make you more eligible for scholarships and admission to your preferred college(s).
- Take The SAT or ACT in the spring of your junior year. Spring is a good time to take the test because you usually need your junior year education before you’re ready to take it. Ask your high school advisor when and where the tests will be administered. SAT and ACT tests are offered seven times throughout the year in most states.
Consider How You Will Pay For College
Junior year in high school is an excellent time to start talking about how you’ll pay for college.
- Talk to your parents about what your family can afford.
- Ask your high school guidance counselor about resources that can help you afford college.
- Start researching scholarships that might be a good match for you.
Additionally, you should begin to familiarize yourself with the FAFSA so you understand how it works.
Consider Working In Your Field
Before you grab a summer job at your favorite golf course or local restaurant, consider picking up a part-time job in your future industry.
- For example, if you’re thinking about working in broadcasting or media, check out local newspapers, radio stations, television stations, or ad agencies. Many have summer jobs and internships that are open to people over the age of 16.
You don’t need to do a specific type of work with the company. If the only job open is sweeping floors — apply for it as if it’s the best job in the world.
The experience of being around people in your industry and the chance to put the job on your resume is all the value you need at this point. It doesn’t matter what you do — just do it well and make a good impression along the way!
Working in your industry (at any level) can help you form connections, learn about grants and scholarships, and set you up for future internships and jobs. It will give you a head start on networking within your industry, and improve your financial potential at every step along the way.
There are many ways you can prepare for college during your Junior year of high school.
Focus your efforts on areas that will help improve your college funding, such as boosting your chances at scholarships, communicating with your parents, and taking a summer job related to your area of study.
For college-bound students, senior year is filled with college-related activities, such as touring and applying to colleges, SAT & ACT testing, applying for financial aid, and making final decisions about what to study next year.
All the activities of preparing for college while trying to socially enjoy your last year of high school, plus potentially preparing for an out-of-state move, makes you senior year feel as if it’s flying by at lightning speed.
To help organize the financial aspects of college, we’ve created a checklist for high school seniors that outlines some of the best things you can do this year to help finance your education.
If you haven’t completed all the tasks in the How High School Juniors Can Prepare For College section above, then please add those tasks to this list.
1. Create A College Calendar
Throughout your Senior year, you’ll receive several correspondence that contain important dates.
Before long, the dates, times, locations, and details of your upcoming appointments will become impossible to keep straight without keeping a written record.
While you can (and should) keep track of all your appointments in an online calendar, creating a visual (non-digital) calendar will help ensure that you don’t miss any important deadlines or appointments.
We suggest you get a large desk or wall calendar, and write in all the dates related to your college activities, such as college tours, registration and orientation dates, and application deadlines
Use red ink to notate your finance-related activities so they stand out from everything else. Many of them are hard deadlines that aren’t flexible, and you want to be sure you don’t lose money because of a missed appointment or deadline.
Some of the important financial dates to include on your college calendar (write them in red ink):
- Deadline to compile the information and documents you need to fill out your FAFSA
- Deadline for your parents to compile their financial information and documents (yes, give them a deadline!)
- FAFSA submit-by deadline AND your personal submission deadline
- Financial verification deadlines, if requested by FAFSA
- When you expect to receive your financial aid award letters (varies by state and college)
- Scholarship application deadlines
- Other meetings and deadlines related to college financing
You’ll add to this list as you go along, when your high school advisor or college financial aid office adds new dates and information.
Keeping a detailed visual calendar can go a long way toward reducing the stress of college preparation and helping you to succeed during your final year of high school.
2. Complete Your Financial Aid Research And Applications
Applying for aid at the private, Federal, State, and college levels can be a complex process.
However, the payoff for all your hard work is well-worth the effort. Researching and applying for as much financial assistance as possible can help you get an education AND start your future career with as little debt as possible.
Here are a few important financial aid activities to complete during your senior year in high school:
Learn How FAFSA Works And Submit Your Application
Reading through this entire guide will give you an excellent overview of how FAFSA works and what you need to do to fill out and submit your application.
Additionally, please be sure to read through all of the details and instructions on FAFSA.org before filling out or submitting your application.
Instructions, deadlines, and requirements are subject to change at any time, so it’s essential that you review the FAFSA instructions on its website before you fill out your application.
Find And Apply For Scholarships
- Research merit and need-based scholarships to find which ones are a good fit for you.
- Apply for the scholarships you choose.
Meet With Your High School Advisor
Most high schools have an advisor that can guide you through the process of preparing for college, including financial assistance.
- Find out what resources they have that can help you obtain funding and guidance through the application processes.
Contact The Financial Aid Office Of Your Future College
The availability of non-Federal college aid often depends on what state and school you’ll attend.
Once you understand the basics of Federal assistance, contact your college’s financial aid office to ask about the following:
- What do you need to do to apply for state- or college-level assistance?
- How likely are you to receive financial aid?
- When does your college(s) send out financial award letters?
- Do they know of any additional assistance programs, deadlines, or tips for financing your college education?
Going To Community College? Research Transfer Credits.
Attending a local or community college for the first couple years can be an excellent way to save money on college.
Often, you can complete your basic college courses at a fraction of the price before completing the rest of your degree at the college of your choice.
Contact the college admissions office of your future school to confirm which community-college credits may or may not transfer.Sometimes, transferring credits is simple.
Other times, you may discover that it can be tricky or even impossible.
Either way, you should find out about credit transfers as early as possible so that you don’t invest time and money into classes that won’t count toward your degree.
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3. Research Cost-Of-Living Expenses
Your senior year is an excellent time to begin researching and planning for your cost-of-living expenses for college.
- Look into the cost of living in a dorm versus off-campus and decide which is better for you. These expenses often vary dramatically from one city (or state) to another, so you may need to do this for several cities if you’re not sure where you’ll be attending college.
- Decide whether you’ll work a part-time job, internship, or work study job. Or, will you start a business? How can you increase the possibility of success for that job or business during your Senior year in high school?
- Brainstorm low-cost ways to furnish your college dorm or apartment.
- Research college student discounts. When start attending college, check your discount list before you buy anything!
4. Increase Your Overall Chances Of Obtaining Financial Aid
By your senior year, your future career and wealth is already in your hands.
How you approach your college preparations will have a significant impact on your college funding and your future financial health.
Here are some things you can do during your senior year in high school to boost your chances of receiving financial aid for college.
- Volunteer in your community. Volunteer work helps you get into college and can also help you secure certain grants and scholarships.While we like to think of volunteer work as something that’s “from the heart,” it’s okay to use it to give you a college advantage as long as you show up and give 110% of yourself. Use volunteer work as a way to gain experience for your future career and cement connections in your hometown.
To make the most of your volunteer time, make an effort to form positive relationships, prove that you’re responsible and creative, and go above and beyond your normal duties when it’s appropriate.
- Work at jobs related to your future industry. Working at any job within your industry helps you build a valuable work history and may also boost your chances when applying for scholarships.For example, if you’re interested in marketing, look for a job with a marketing agency or firm — or see if you can get in with the marketing department at any local business.
Offline activities build much stronger connections, but if there are no local opportunities, you might consider a remote working environment.Without experience, you may be mopping floors or answering phones, but it doesn’t matter. You’ll learn about the industry AND prove your passion for it from a young age.
- Save as much as you can to help with college. Setting money aside now can help you pay for living expenses or even tuition expenses next year.While it’s important to enjoy the last of your high school experiences this year, you should also have one foot equally planted in preparing and saving for next year — your first year of college.
5. Continue getting good grades and studying for the SAT or ACT.
If you followed all the steps in the prior section, How To Prepare For College In Your Junior Year Of High School, then you’re already on board with test prepping — and have probably already finished your SAT or ACT.
If you haven’t taken the SAT or ACT yet, talk to your high school guidance counselor about how to schedule your first session immediately. Then, kick it in high gear with test prep (see resources for SAT and ACT test prep in the How High School Juniors Can Prepare For College section above).
If you’ve taken the test but aren’t happy with the results, you can retake it more than once. Ask your high school advisor when and where you can retake your test, if you plan to test again.
6. Take or retake your SAT or ACT if necessary.
By fully preparing for college during your senior year of high school, you’re likely to get more money to help fund your college education.
Parting Advice For Future College Students
Getting a college degree makes you (and your future children) much more likely to earn a high income throughout your lifetime.
However, many people negate the value of their college education by carelessly racking up debt that leaves them broke.
Your first step toward a healthy financial future and responsible money management begins with your post-high school education.
College can be expensive, so you should go into it with a passion for learning and desire to build professional and social networks that support your future career.
Putting serious effort into finding ways to pay for your college education, without going into debt, is an excellent first step toward responsible money management and future wealth.
Almost anyone can reduce the high costs of college by applying for assistance through the FAFSA.
Grants and scholarships are the best type of financial assistance you can get, since you don’t have to pay them back.
College loans are often easy to get, but they can bury you in debt and compromise the quality of your after college if you’re not careful.
Try to avoid student loans if you can, and focus your energies on improving your chances of scholarships, grants, and other financial opportunities.
If you begin preparing for college during your junior year of high school, you’ll have a better shot at funding your education through aid and scholarships instead of loans.
As you move from high school senior to college freshman, remember that your drive, determination, and passion can help get you to the finish line, but your strategy is what will set you apart from the majority.
“You have to go through life with more than just a passion for change; you need a strategy.” – Barack Obama, Harvard University 2016