The end of the school year is quickly approaching. But the excitement of summer break may be overshadowed by a more pressing question: How will I pay for college next year?
Justin Draeger
President & CEO, National Association of Student Financial Aid Administrators (NASFAA)
Justin Draeger serves as the primary voice of NASFAA and as the liaison between the association members, the U.S. Congress, federal agencies, and the media. Most of Justin’s career has been devoted to assisting disadvantaged populations achieve their educational goals and better their communities.
The outlook on financial aid and college enrollment has been challenging this year. The rollout of the new FAFSA has been riddled with errors and delays, and many are still waiting for information on how much financial aid they’ll receive. But in the meantime, students can still take steps to plan for their expenses in the year ahead.
Create a budget
Start by calculating your monthly income and expenses. Once you receive your financial aid offer, you can use that as a guide to help determine how much you’ll spend each month on educational expenses, plus living expenses like rent, food, and transportation.
Make sure to track your spending along the way to help you stick to your budget, avoid unnecessary expenses, and try to identify areas where you can cut costs.
Save for emergencies
Even a few hundred dollars in unexpected expenses — for things like a car repair, a medical bill, or rent increases — can throw a wrench in many students’ educational plans. When possible, try to set aside some money each month in case of emergencies, and investigate whether your school has an emergency financial aid program that you can access.
Still, even the best laid plans cannot forestall every emergency. If an unplanned emergency does strike, be sure to check in with your financial aid office to find out about any last-minute emergency grants for extenuating circumstances.
Work while studying
At some point in the past, it may have been possible to work one’s way through college. Today, working part-time and attending college isn’t likely to cover all your expenses, but work-study can be a helpful way to defray some of the ongoing costs of attending school.
Work-study jobs offer part-time work to needy students on and off campus, and are usually part of a school’s financial aid offer. They can be a great way to integrate oneself into the campus and pick up some money along the way.
Minimize borrowing and plan ahead
If possible, avoid taking on debt. If you must take on debt, be aware of interest rates, and make sure payments fit your budget. Once you enter student loan repayment, you can set yourself up for success by picking the repayment plan that’s best for you to avoid falling into default.
Borrowers start out on a standard 10-year repayment plan after a six-month grace period, but if that’s too much to handle, there are other repayment plans based on your income that can keep payments affordable.
Stay informed
Learn about personal finance and investing so you can make informed decisions about your money. Take advantage of financial literacy resources offered by your college or university, such as workshops, counseling services, and online resources, usually offered for free. Don’t be afraid to ask your financial aid or student services office for help navigating different financial situations.
Figuring out how to pay for college can be daunting for both new and returning students — after all, it’s one of the most significant financial investments many will make in their lifetime. But by starting early, exploring all available options, and staying informed throughout your journey, you can pave the way for a financially sustainable future.
