When you’re planning for college, the ﬁrst question is often which school to choose. But equally as important is the question of how you’ll pay for it. These three steps can help you make more informed, responsible ﬁnancial decisions for a big investment in your future.
Begin with any college savings that have been put aside in a dedicated college savings account and include current income that you’re earmarking for college. Maximize “free” money you will not have to pay back, including scholarships and grants. Then consider work-study
Scholarships are offered by colleges and universities, federal and state governments, religious groups, professional associations, employers, and other companies. You might think they’re only for academic or athletic accomplishments, but they can be awarded for a number of criteria:
Apply for scholarship – the earlier, the better, since many have deadlines.
Grants and work-study are generally federally funded, so be sure to submit the Free Application for Federal Student Aid (FAFSA) to apply for them. The FAFSA is also used to apply for most state loan, grant, and scholarship programs.
After you’ve maximized your free money, consider federal student loans, which are provided by the government. Direct Subsidized Loans are for students with demonstrated need and Direct Unsubsidized Loans are available regardless of family income.
If you still need additional funds after following steps 1 and 2, consider a private student loan. Private loans differ from federal student loans in several ways:
We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.
Commerce Bank does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Consult
your own attorney or tax advisor about your specific circumstances. Grant, work study, and federal student loan
information was gathered on August 15, 2018 from Studentaid.ed.gov.
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