College is becoming increasingly expensive. As a result, it is likely that you will need to seek funds for paying for college from multiple sources. First of all, though, it is a good idea to be setting money aside in some sort of advantaged account. Whether this is a 529 plan or a Coverdell, it is a good idea to be in the habit of setting aside money for college. However, if you are concerned that what’s in a college account will not be enough to cover the costs of college, it is a good idea to consider additional sources of college financing.
Some types of college financing are more desirable than others, as you might imagine. Below you will find ideas for college financing — in the order you should seek them:
1. Free Money: Grants and Scholarships
Your first efforts should be geared toward getting free money to help you pay for college. The government offers grants based on your income. If you qualify, you can get government help paying for your schooling. On top of this, there are scholarships available for different accomplishments. Some of them are available because of certain qualities you might have (such as being tall, or being of a certain ethnicity). FastWeb is one site that can help you locate scholarships to apply for. Check with the school, and in your local community, for scholarships.
2. Federal Student Loans
Scholarships are harder to come by these days, so you might need additional loans. Your first stop for student loans should be the federal government loan program. You can get loans at a lower interest rate. You should first get as much as your federal financing in subsidized loans. With these loans, the government pays your interest until you are done with school. If you don’t qualify for subsidized loans, you can get unsubsidized loans. With these loans, you can pay the interest as you go, or wait until you are done with school and the accrued interest is capitalized.
3. Private Student Loans
You can also get student loans from private sources. Banks offer student loans, but their interest rates and terms are often not as favorable as those offered by the government. You can go to web sites like TERI.org to find sources for private student loans. Another possibility is to go through a site like Tuition U, which offers P2P lending as well as access to banks and credit unions across the country. Before you go to a bank, it might be worth it to check the terms you can get with peer to peer lending. In some cases, you can get better deals. Additionally, you can ask friends and relatives to help you with your education by loaning you a portion of the sum through a P2P site.
Bottom line: Finding financing for college isn’t always easy — and it can be expensive. However, there are a number of options that can help you find some of the help you need to pay for college. Start out by working toward funding yourself through savings and scholarships, and then explore other options if needed.