Recent grads may have just gotten an extended break from student loan repayments, but college debt remains a significant hurdle for nearly all grads.
“Attending and paying for college can be nearly impossible without taking out a student loan, thanks to exponentially rising tuition fees,” said Bankrate.com analyst Sarah Foster.
With so many students borrowing to cover at least some of the costs, the outstanding student debt now exceeds $1.7 trillion.
“Student loan debt is a major burden that follows borrowers through every major financial decision, from moving and buying a home to saving for emergencies and retirement,” Foster said.
But there is another way. Experts say that reducing the amount you borrow up front will go a long way to easing your long-term debt burden. Here are three ways to do it.
1. Complete a FAFSA
Students must complete the Free Application for Federal Student Aid to access any type of aid, including scholarships and grants.
The US Department of Education awards about $120 billion each year to help students pay for higher education. And beyond federal aid, you may also be eligible for financial aid from your state or college.
Year after year, high school graduates miss out on billions in grants because they don’t complete the FAFSA. Many families mistakenly think they won’t be eligible and don’t even bother to apply.
In addition to gift aid offered by government and colleges and universities, there are many private scholarships available, often funded by foundations, corporations, and other independent organizations.
Free scholarship search sites, such as fastweb.com and bigfuture.com, also compare a student’s background against a scholarship database.
“You don’t have to be the highest ranked person in your class to win a scholarship,” said David Tabachnikov, CEO of scholarship search site ScholarshipOwl.
“Scholarships reward all types of students, such as those pursuing a STEM major or students who live in Indiana.”
Consider your financial aid award letter a starting point.
Many schools, even those in the Ivy League, are often receptive to calls for more help — they just don’t advertise it, said Stuart Siegel, president of FAFSAssist.
But first, make sure you understand the difference between grants and loans, whether these funds are renewable for all four years, and whether they come with contingencies such as maintaining a certain grade point average. .
Then contact the school’s financial aid office and frame the conversation based on the type of help you’re looking for.
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If there are issues related to needs beyond what was noted in the financial aid documents, such as an older brother who came home from college, care for elderly grandparents, increased health-related expenses or loss of employment, these must be explained. at school and documented, if possible.
Alternatively, if other comparable schools’ financial aid programs were better, it is also worth bringing to the school’s attention in a call for more merit-based aid.
“Given the current circumstances, colleges are very eager to hear from the families,” Siegel said, and “I see colleges ready to step up to offer more money.”