Private student loans and more. FAFSA isn’t the only financing option.
It’s the F word in post-secondary education—FAFSA®. FAFSA stands for the Free Application for Federal Student Aid, which students complete each year to receive financial aid for college or trade school.
Federal financial aid may come from grants, scholarships, work-study funds, or loans. Many colleges today will not even consider a student for merit-based scholarships unless they have completed the FAFSA.
While FAFSA tells you how much financial aid the federal government will give you, it is NOT your only option for paying for your education. So, don’t get disheartened if your FAFSA package comes back and you don’t receive enough financial aid to cover your school expenses. There are other options, and we will discuss a few.
Private scholarships
Scholarships are far and away the best option for paying for post-secondary education. Why? Because you don’t have to pay them back. You don’t have to be a “scholar” to qualify for a scholarship. Yes, there are some awards that are based on grades, but there are thousands of others out there that are based on demographics, skills, or abilities.
The main obstacle for most students in finding these scholarships is time. Although looking for scholarship opportunities is time-consuming, the payoff can be huge.
The first place we like to start our search is at the school the student wants to attend. Private schools often offer numerous scholarship opportunities funded by graduates and other philanthropic community members who wish to support students there.
Then, there are scholarship databases. Niche and Fastweb are two that we often try. Additionally, the U.S. Department of Labor has a scholarship finder. Community and religious organizations, community foundations, and local businesses are other places to look for scholarships. Private companies are a great source of scholarships, especially if you or your family members work for the company.
Tuition reimbursement
Tuition reimbursement programs are company-sponsored benefits that reimburse employees for furthering their education. Reimbursement means that the employee initially pays for their courses, and then, upon successful completion, the employer pays the employee back some or possibly even all the cost.
Chipotle’s education benefit program has been extensively discussed online. The fast-food chain pays up to $5,250 annually for an approved education program.
In high-demand fields like nursing, the hospital system will pay for your nursing classes if you’ve worked there for at least a year. Some students opt to start with State Tested Nursing Assistant training or STNA and go to work at a hospital until they have the tenure to qualify for tuition reimbursement. At a program cost of approximately $1,200, an STNA certification is an affordable entry point into the healthcare field.
Private student loans
Private student loans are another option for financing your post-secondary education, but we advise students to be cautious when looking at ANY loans. Loans, unlike scholarships, must be paid back. Depending on the interest rate and loan terms, it may or may not be a good idea.
Private student loans are loans provided by banks or other financial institutions. These differ from federal student loans, which are awarded when applying for financial aid through FAFSA. Federal student loans are based on perceived financial need. Private student loans are based on your credit score.
The first question you should ask about a private student loan AND a federal student loan is, “When do I have to start paying the loan back?”
With most private student loans, you must make at least a minimum payment monthly. Interest starts accruing the moment you take out the loan. That’s a big difference between private student loans and SUBSIDIZED federal student loans. With subsidized federal student loans, the loan doesn’t start accruing interest until you finish school. Unsubsidized federal student loans are an entirely different story, so it’s essential to understand the difference or talk to someone who does before you sign any paperwork accepting a loan.
One of the toughest challenges most students face is figuring out how to pay for school. Finances are frequently a barrier to education beyond high school, but at The Chatfield Edge, we don’t want any students to avoid post-secondary education due to cost.
Part of our free service to students is helping them explore all potential sources of financial assistance. The Chatfield Edge also may provide scholarships to help close the gaps.
If you are an adult ready to explore educational opportunities beyond high school, our team is prepared to help with complete education support. Learn more.
