Smart Ways to Stretch Your College Financial Aid

Making the decision to get a college degree can result in one of the most rewarding experiences of your lifetime. Not only will your social life and professional connections grow, you will place yourself in a better position to earn more money during your lifetime with your continued education. But college does not come cheap. It is estimated that there is currently more than $1 trillion worth of outstanding student loan debt in the United States. This staggering debt indicates the need to make college financial aid funds last as long as possible so there is either very little resulting debt or the money owed is well worth the repayment.

Choose a school

One of the first things to do when investigating sources for college financial aid is to consider which school you might want to attend. Colleges have financial aid offices staffed with knowledgeable employees who know the ins and outs of applying for financial aid at their university. Much of the general information you find elsewhere can be helpful, but by going to the financial aid office at the school you want to attend, you will get financing options specific to that school.

You can find out about scholarships, loans, and grants you might be able to apply for. Some of these options may depend on your submitting a Free Application for Federal Student Aid, or FAFSA, to determine your financial need.

Consider cheaper avenues

There’s absolutely nothing wrong with wanting to attend a prestigious college or university. However, the more prestigious, the more expensive the tuition and fees will likely come out. If you know you can qualify for a certain amount of college aid, the school you attend will determine how far you can stretch those dollars. For instance, tuition and fees at a four year university can cost over ten times the amount it does at a community college. As a result, the same amount of aid will go further at a community college.

Borrow wisely

Sound college financial aid planning may well include loans. If the loans are need based, they will not be granted based on what is in your credit report, but on what is in your FAFSA. If you have to take out private student loans, you will want to plan for everything that comes along with any other private loan application, including

• A credit check—to determine if you are creditworthy, private lenders will review your credit report
• A steady income or a credit worthy co-signer with income—many students do not have an income, and while lenders understand this, they will still want to see that someone who is on the loan application has the income to repay the loan
• Possibly higher interest rates than federal student loans—federal student loans come with a lower interest rate than other loans that isn’t usually matched by private lenders
• An immediate repayment plan, well before you leave college—federal student loans allow for a grace period after you leave school, during which you will not be required to repay your loans; private loans may require that you begin repaying the loans while you are still in school

Before a private lender checks your credit score, you may want to check your credit score yourself. This way, you’re completely aware of how you might fare with a private loan application. Having your credit score beforehand can help you prepare to place yourself in a better credit situation, if need be.

Save money where you can

Many of the things college students spend money on are not necessary. There are several ways to cut costs so that the college financial aid you receive lasts longer. Rather than purchasing new textbooks, consider getting them used, or even renting them. Many textbooks are now offered as e-books and come with a much lower sticker price than brand new ones. You can also live off campus and save on the dormitory cost, or purchase your own food and skip the pricey meal plan at school.

Perhaps the most important thing you can do to help your college financial aid last longer is to create as little debt as you possibly can in the first place. If you finish school on time, or early, you can keep your borrowing to a minimum. Once you receive your degree, you can take pride in repaying the cost of your education with a lower outstanding amount.

Joy Mali is an active blogger who is fond of writing articles on credit monitoring and advising people to monitor your ID to keep an eye on wrong data entered in your report. Follow her on Twitter to know more on smart ways to stretch your college financial aid.