Tag: financial help for college

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Career & Education Debt Education Financial

Is It Better To Finish College Faster Or Debt-Free?

Is It Better To Finish College Faster Or Debt-Free?

A college degree is a significant investment in your future, but no one wants to be saddled with student loan debt for the rest of their life. There are ways to finish your college education faster, but the cost of tuition can add up quickly. As you prepare to choose your college, it’s important to ask yourself: is it better to finish college faster or debt-free?

Working Through College To Be Debt-Free

One of your options to finish college with less debt is to work full-time while you attend classes part-time. If you’re supporting a family or already in a steady employment position, this can be a great option. However, attending school part-time means you will be in school longer, which can mean higher tuition in the long run.

To decide if this is the right option for you, consider how your earning power will increase once you graduate with your degree. Will the costs of attending full-time be offset by the increased income? If you have a lot of financial responsibilities, this might not be a factor as you have to meet your other financial obligations instead.

Applying for College Scholarships

If you qualify for scholarships and grants, you could attend school full-time and graduate faster without racking up student loan debt. There are so many scholarships out there that could help in whatever situation you’re facing, so before taking out student loans, be sure to search for scholarships you may qualify for.

Ask everyone you know if they’re aware of any scholarship opportunities or take your search online to any of several college scholarship search sites to figure out if you’ll qualify for any free money.

Taking Out Student Loans

Of course, if you don’t qualify for a scholarship or grant, you always have the option to take out student loans to cover your college expenses without working. Attending school full-time is expensive, but it also means you’ll graduate more quickly and can start earning more money faster.

If you can’t feasibly work and attend college, consider increasing your course load to graduate faster. Reduce your expenses by living as cheaply as you can and working during the summer to reduce the amount of money you have to borrow each year.

Finding a Balance

So, is it better to finish college faster or debt-free? There’s no single right answer. Some students have a hard time trying to work while attending college, so they’ll work over the summer and save money to balance out the amount of money they have to borrow. Other people have financial obligations to meet outside of school, so they work full-time and attend classes part-time or over the summer instead.

Finding the right balance for your needs is crucial, and a lot of it will depend on your major, your expected income, and how much you end up having to borrow. No matter which option you choose, make sure to follow a college budget and keep your expenses down.

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Career & Education Education Government Grants

How to Finance Your Child’s College Education

pay for your child's college tuition

Finding out that your child has been accepted into college is most likely going to be one of your proudest experiences. But then the reality sets in of how much it’s going to cost to pay for tuition, fees, and even room and board for four years at a private college. With averages that top $30,000, paying for a college education isn’t as cheap as it used to be.

Thankfully, there are a handful of ways to make sure there is some financial wiggle room for when your little genius starts their higher education. Let’s take a look at the top ways.

1.   Federal Loans

This should be the student’s first stop If the funds haven’t already been saved. Filling out the Free Application for Federal Student Aid or FAFSA will help determine the amount of aid your student may be eligible for through federal and state programs. Some of these programs will be grants, but a major portion of the cost will likely be paid for by Federal Student Loans.

If your child is a dependent, they may also be eligible to get a Parent PLUS Loan, if you provide your information. It will depend on your credit, but it’s a fixed-rate and will cover up to the entire cost. The other option for federal loans is Stafford Loans.

2.   Private Loans

Even after grants, scholarships, and federal loans, depending on where your child is going to be enrolled, there still may be some costs due. This is where private student loans may be of benefit. They will often be at varying levels of interest, depending on credit, and each lender will have their own terms, just like with any other type of loan. Loans can be obtained either in the parent’s name or in the student’s with the parent as a co-signer.

3.   Leverage A 529 Plan

The 529 College Savings Plan is becoming increasingly popular these days. These savings plans allow a higher contribution than other savings plans, and the funds can be used for any college-related costs tax-free. The plan can be diversified significantly and offers a much better return than traditional savings accounts.

4.   Use Home Equity

This is one of the two “last resort” options. If you are the owner of your home you may be able to fund some or all of your child’s tuition with the equity in your home. This is not the highest-risk method, but it’s second in line. You can use either a home equity line of credit, take out a home equity loan, or even do a cash-out refinance. All carry some risk.

5.   Use Retirement Funds

This is an absolute last resort option. The type of funding available would depend heavily on the type of retirement account that was being drawn from. If this is an option you would like to pursue, you should reach out to your financial institution, as well as your tax professional, to discuss how to impact your retirement minimally.