A high school diploma today does not carry the same weight as it did for your grandparents. For instance, a high school graduate of yesteryear could reasonably expect to land an accounting position with good benefits, whereas today that same position would likely require a bachelor’s degree. In short, it takes more education to have the same career.
That does not mean that you should feel compelled to pursue a typical four-year (or higher!) degree. Choosing a career path is a lot like ordering food at a restaurant: pick what you want, not what you think you should want. You do not need to be a doctor, lawyer, or business executive. If being a plumber, electrician, or mechanic is your calling, then trade or technical school might be for you. The traditional college or university path is not for everyone, but you probably need some form of postsecondary education or training.
Of course, even if you attend a public institution, postsecondary schooling is not free. You need to be prepared to somehow cover the cost.
Complete the Free Application for Federal Student Aid.
If you do decide to attend any form of postsecondary education, you must complete the dreaded FAFSA to qualify for financial assistance. You can complete your initial FAFSA form in the spring of your senior year of high school. You do not even need to know where you will be attending school in the fall when you complete the form.
The FAFSA is used to determine your family’s “expected family contribution” towards your schooling expenses based on your (and your parents’) income and assets. Your schooling costs, minus your expected family contribution, is the amount of your “financial need.”
Completing the FAFSA is much easier nowadays than it was when I was in college. If you have already filed your taxes, the online FAFSA application can import much of your financial data directly.
A few important notes:
Do not ever pay for someone to complete the form on your behalf. You can do it yourself online via the Department of Education website at no cost.
Do not use a website other than the official Department of Education site.
You must generally report your income and assets and the income and assets of your parents. The theory is that your family is responsible for contributing to your educational expenses. (Whether they actually do so is another matter entirely.)
If you are a beneficiary of a 529 plan or other account held by a grandparent, aunt, or other relative, though, that does not count against you! If possible, have another trusted relative maintain a college savings account for your child.
Even if you are financially independent from your parent(s) or guardian(s) for all practical purposes, you must typically report information about your parents unless you are married or already have a bachelor’s degree. There are exceptions to this rule.
If you have a unique situation—or even just questions along the way—you can always talk to the staff at your school. (More on that below!) They can make the necessary changes so that your “expected family contribution” is appropriate for your scenario.
Visit your financial aid office.
Every accredited institution (whether a small, rural technical school or a full-fledged, sprawling university) will have some staff dedicated to helping you finance your education. For a small school, it might be among the many responsibilities assigned to one particular staff member. For a large university, there is an entire office with financial aid counselors. Either way, get acquainted with these folks, and visit them often. It is quite literally their job to help you pay for school.
Your financial aid counselor will help you apply for federal and state grants and loans, work-study positions if eligible, institutional and outside scholarships, and more.
Grants and scholarships are your friend.
Grants and scholarships are, in a very real sense, free money to help with your education because (unlike loans) they do not have to be repaid.
Some of these grants will be funded by the federal or state government based on your financial needs. Other types of grants may be institutional, need-based aid. Princeton University, for example, will cover the full cost of attendance for students from families making less than $65,000 annually, and significant portions of the cost for students from families that make more but are still not considered wealthy.
Institutional scholarships are offered by the school you will attend. An NCAA Division I women’s basketball program may offer up to fifteen scholarships at a time, whereas NCAA Division III programs may not offer athletic scholarships. (Many Division III athletes attend schools on academic scholarships, just like their non-athlete peers.) Academic scholarships can be university-wide and offered by the financial aid office, or you might have to apply through a particular department. (When I was in college, I was fortunate enough to secure a generic university scholarship initially, after which I was eligible to compete for departmental scholarships in subsequent years.)
You can apply for scholarships at multiple institutions simultaneously while you decide where to go. Available scholarships should be an important factor in your decision! In future years, you can be more targeted at your own school.
The point is that scholarships can be very general or incredibly specific. You may find scholarships for first-generation college students, left-handed students, or students from a certain county who wish to pursue agriculture. The possibilities are endless.
Do not feel limited by your school’s offerings, either. You, a parent, or a relative may work for an employer or be part of a community organization that offers scholarships or tuition assistance. These “outside” scholarships can typically be used at a school of your choosing as long as you meet the award’s requirements.
Pursue work-study opportunities.
Work study is another type of need-based financial aid. This is not as ideal as a scholarship, but is still preferable over loans. A work-study job allows you to earn money by working on campus. All else being equal, an on-campus job is usually preferable to working off-campus because they will be more flexible with your school schedule.
Where do you go to find out about work-study positions? Your financial aid office, of course!
Tap into a 529 plan.
No doubt you have heard of a “529” plan, also known as a qualified tuition program. (Older folks may remember “education IRAs.” Same concept.) It gets its name from the section of the Internal Revenue Code providing for these types of plans.
A 529 plan allows folks to contribute towards a beneficiary’s higher education expenses. Contributions are not deductible for federal income tax purposes, but they grow tax-free while the funds remain in the plan. Distributions are also tax-free when used to pay for qualified higher education expenses.
Higher education is not limited to a traditional university. It includes community colleges, technical, and trade schools as well.
Besides strictly higher education expenses, you can access funds in a 529 plan (up to $10,000 per year) to pay for private school tuition for kindergarten through twelfth grade.
Plans are administered at the state level, but the owner need not reside there, and the beneficiary can typically use it for higher education expenses anywhere. For example, you could live in Tennessee, establish a Utah 529 plan for your niece who lives in Arizona, and she could use it to pay tuition at Notre Dame in Indiana.
Each state plan has its own investment choices and expenses involved, so be sure to shop around!
While contributions to 529 plans are not deductible for federal income tax purposes, they may be deductible at the state level if you contribute to a plan administered by your home state. Some states also offer additional incentives to motivate people to start, or contribute additional funds towards, a 529 plan, so be sure to check out what is available in your state.
Another fun aspect of 529 plans is that anyone can contribute. For instance, my youngest brother established 529 plans for each of his two children shortly after they were born. He then provided us with links that allow us to contribute to those plans whenever we wish. Their birthday and Christmas gifts have always included a 529 contribution. Rather than buying stuff for a child that does not need any more toys, and will not remember what you got them in their first few years of life anyway, you can buy a semester’s worth of books later for just a small amount now.
Consider career-based incentives.
There are many programs that provide tuition assistance, or forgive loans, for folks pursuing certain professions. Here are just a few examples:
If you are pursuing a career in the nonprofit world or in public service, consider that the Public Service Loan Forgiveness program could be a way to finance your education.
There are educational benefits for military members and veterans.
Many states have incentive programs for aspiring teachers.
The National Health Service Corps offers loan repayment programs.
Educational benefits are available for Americorps and Peace Corps volunteers.
There is always a path forward.
No matter what type of postsecondary education you wish to pursue, there is always a way to make it happen. Tap into one, or many, of the myriad opportunities available!
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