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How to Financially Prepare for College

Going to college is one of the biggest leaps you’re ever going to take. How that first year goes is going to be a key factor, perhaps even determining the rest of your life. 

Your decision on what to study is vital, of course, but so is the question of how to pay for it. Chances are that you are going to be working in your field of study once you graduate until you retire. So you want to make sure you pick the right course and one that can pay the bills – especially those student loans, which you could be paying off for decades.

There’s also the matter of equipment. What tools do you need? You probably can’t get away with just a pen and a copybook. Then there’s the biggest issue of money to think about. College costs a good amount of money, and it’s unlikely you have the thousands of dollars for your first year just sitting around somewhere. So how do you raise money for it? 

After figuring out funding for your enrollment, you need to get the money together for everything else – all your equipment and textbooks (which is going to be pretty expensive), travel, food, and accommodation if you’re staying in a dorm.

This guide is here to shed some insight on the whole pre-college process. It’s going to provide you with some food for thought, tips on getting yourself prepared, and of course, some of the ways you can go about getting funding. 

Keep in mind that this is more of a general guide. Everyone’s situation is different, and what you need to do may be different from what somebody else does. From different courses to different financial circumstances to different living conditions, no two people are the same, and so no two people’s college experiences are the same. So take what you need from this guide, and do your own thing for the rest. 

Choosing the Right Major

What course you end up completing is critical. The importance of picking the correct one cannot be overstated. Not only does it determine what you’re going to be spending the next three, four, even five years of your life doing, but likely the the rest of your days until retirement. 

Picking the wrong course of study can be disastrous. Some people end up dropping out because they made the wrong choice and find themselves loaded down with student debt with no degree to show for it. If they devide to go back later down the line, there’s more debt to add to that and less time to pay it off before retirement. So to avoid this, there is one thing you need to keep in mind: What do you really want to study?

Sure, going to study something in high demand like computer science is going to net you a high paying job, but if you don’t enjoy it, you aren’t going to see the degree through. You’re not going to study math if you’re a writing whiz and vice versa. 

You can make a good living with any degree and a little bit of grit and boldness, so don’t worry too much about how much the average salary is. Instead focus on deciding what you want to spend the rest of your life doing. 

The key is to study to learn, not for a degree. So many people make the mistake of picking a course solely for the title of the degree at the end and struggle their way through the content. Don’t let this be you. Pick a subject that you have a desire to learn and master. Let the studying be the reward and the degree a bonus. 

Ask yourself: “If I had to become a professor of something, what would it be?” That’s not to say you have to become a professor or get a doctorate, but what topic would you be willing to devote your life to learning?

To help you with this, you should go and see a career advisor. There are plenty of them out there, and chances are, your high school has one. These guys have been through the mill, and they specialize in helping you pick what’s best for you, so their input should be well heeded. There are external career advisors too, if you don’t want to go to your local one. You could even email the career advisor of a college you’re thinking of going to. 

If you can’t make up your mind, send some emails out to the faculty of the department you’re considering studying and ask questions, and chances are, you’re going to find yourself picking one over the other pretty easily. 

Making a firm and informed decision now will allow you to avoid the hassle of changing majors several times, as well as the extra financial burden that would come from spending longer to obtain your degree.

Major Non-Tuition Expenses

In high school, especially for those of us who may not have been particularly studious, a pen and a piece of paper were all we needed some days. For the more invested, you had different color pens, different notebooks, and textbooks, and maybe a calculator, ruler, or whatever other devices were in your pencil case. That is the same in college to a certain extent. However, many students opt for a laptop for taking notes, research, and writing essays.

You can use the laptop for online research, to do assignments, take notes, store all your materials in one place, and access your online classroom. In fact, there are few, if any, college professors that accept handwritten assignments that are handed up. Most of them only accept digital submissions that are sent in through an online learning portal, so you’re going to need one. 

There is a belief that MacBooks are better for students all the time. This is not the case at all. While laptops and MacBooks are nearly identical in everything but their operating systems and price, the key difference is in performance and functions. MacBooks cost more because they are created for design and editing. They come with preinstalled tools and programs for that end and are optimized for it. Invest in a MacBook only if you’re doing art, design, editing, sound engineering, or a similar technical degree. If you’re studying history, for example, you do not need to go out and drop over $1,000 on one. An ordinary laptop does the trick just fine, and you can usually get one for about half of the cost of a MacBook.

A laptop with a decent processor (Intel i7 or up) does the trick and isn’t going to cost you too much. Budget yourself for around $800 at the most, but you can easily get a decent one for $400 to $500.

That’s a lot of money to dish out on top of the money for tuition, so how can you afford it? Well, there are loans catered towards this kind of thing. Many banks offer short term loans on amounts of around $1,500 dollars and up, so you could take this out, get the laptop, and keep the other money either for other necessities, like a car or rent, or use it to pay back a chunk of the loan to begin with. 

By far your best option, though, is to get a job and save the money yourself. There are plenty of jobs, albeit not high paying ones, that are going to allow you to work full time for the summer and then drop down to weekend work once the college season rolls around. It will mainly be fast food places and retail, but it gives you the time to build up the money you need. 

Lastly, a lot of colleges have a battalion of laptops that you are able to take out on loan, sometimes even without a fee unless you break it. If financing one is a problem for you, email the student information desks for your prospective colleges asking them about access to them and other equipment. 

While laptops are a universal need for university, there are two other major expenses that you may have to consider. One is a car. You can get a car loan from nearly any bank, which you can use either partially or fully to cover the price of the car, tax, and insurance. If public transport leaves you close to college, though, don’t prioritize this. A car can cost a fortune, and while it may save you money in the long term, it’s a lot of debt you want to avoid piling on top of everything else. 

The other thing is accommodation. If your college is too far away from home, you’re going to have to rent out a place, either on-campus accommodation in a dorm room or an apartment or house off-campus. No matter what you do, you’re going to want to have roommates to help deal with the cost, so look into that in the area you’re staying in. There are grants that help you deal with costs like this (which we talk about later), but otherwise, you’re going to need to pick up some work to stay on top of rent. 

Paying for Tuition

For a minimum four-year program, you can expect to pay, on average, about $30,000 and up, and that’s for a public school. If you go to a private school, it could easily reach $100,000 or more, just for four years of education. Then, if you decide to do a master’s degree, you can throw another several thousand on top of that at least, and don’t even get started looking into PhDs. 

Fortunately, you don’t have to pay that all out of pocket, but the reality for most people is that you are going to be in debt for a while. This is a truth you’re going to need to accept, but if you plan out your finances correctly and work hard, you can keep your head above the water. 

There are three different sources of finances to look into: subsidized student loans, unsubsidized student loans, and grants. 

Subsidized Student Loans

Subsidized student loans are the better of the two loan options you have available to you. The reason for that is that part of the loan is paid for you, hence the subsidized part. What that means exactly is that the Education Department is going to pay off the interest repayments on your loan for the duration that you’re studying and for six months afterward. 

Not just anyone can get a subsidized student loan, though. There are a few requirements, the biggest of which is that you need to demonstrate a financial need for the loan in the first place. You have to reveal things like your household’s income, social welfare or child support payments your guardian has received, and your income history. 

The second requirement for a subsidized loan is that you are an undergraduate, meaning you can’t get a subsidized loan the second time around or for a degree above your bachelors. 

Aside from that, there are a few other things to keep in mind when it comes to subsidized loans. Firstly, the college you go to determines how much money you can apply for, with the amount being proportional to your financial need. 

Due to the fact that the Education Department is paying the interest on the loan back for upwards of three and a half years, the upper limit on how much you can borrow is set lower than an unsubsidized loan. Specifically, it is capped at $3,500 dollars for the first year, $4,500 dollars for the second year, and $5,500 dollars for the third year. 

What that means is that chances are you’re going to have to mix the two types of loans and get a portion of a larger unsubsidized loan as well.

Unsubsidized Loans

With unsubsidized loans, you take out a lump sum of cash to pay for tuition and other costs and then repay it back plus interest over the course of an agreed amount of years.

There is no proving financial need, so your chances of being accepted for one is drastically higher. 

The government isn’t paying any of this loan back for you, meaning you can borrow more than you could otherwise. However, there are more metrics that play into that amount, primarily whether or not you’re a dependent student and if your parents are eligible for a PLUS loan, which is a loan your parents take out in their name.

Being a dependent student means that you are relying on others to survive. This mainly constitutes those living at home, unable to afford to live by themselves yet. An independent student is the opposite of that – those who pay rent and bills, go food shopping, and all the rest of it. 

If you’re a dependent student and your parents are eligible for a PLUS loan, the cap sits at $5,500 dollars for the first year and then climbs up by $1,000 dollars every year after. If you are an independent student or a dependent student whose parents can’t get a PLUS loan, that number starts at $9,500 and again climbs by $1,000 dollars every year. 

One thing you need to remember is that you can’t combine loans. For example, you can’t get a subsidized loan of $3,500 dollars and an unsubsidized loan of $5,500 dollars for a total of $9,000 dollars. Instead, the subsidized chunk of the loan would take itself out of the unsubsidized loan, but it is still just one loan. So rather than a total $9,000 dollar loan, with $3,500 dollars subsidized and $5,500 not subsidized, you would have a total $5,500 dollar loan, with $3,500 subsidized and $2,000 dollars not subsidized. 

After you attain your bachelor’s degree, you are considered independent regardless of circumstance. If you want to pursue a higher qualification, the loan cap starts at $20,500 dollars.

Grants

Grants are an absolute lifesaver for plenty of students out there, so at the very least, you should have a look into them. Grants offer students with extreme or unusual circumstances the chance to go to college, affording them opportunities they wouldn’t otherwise have.

The grants do this through financial aid, and this financial aid doesn’t need to be paid back, so make sure you check if you’re eligible, which you can do with your school’s financial aid office or the career guidance counselor.  

Many are eligible for the Pell Grant. The grant is up to $5,920 dollars and intended for learners with a financial need or who are studying a post-baccalaureate teaching certificate. 

Another is the Iraq and Afghanistan Service Grant. The maximum amount you can get from this grant is $6,195. There is one other requirement for this grant, and that is that you had to either be enrolled part-time in college or younger than 24 when your parents were killed in action. You also cannot receive the grant for more than 12 semesters.

The TEACH grant is a supplemental grant of up to $4,000 dollars and is for those seeking a teaching education. 

The last grant at your disposal currently is the Federal Supplemental Educational Opportunity grant. The limit here is again $4,000 dollars, but the grant is only available with select schools. The only requirement for this grant is that you have an extreme financial need for it. 

Direct PLUS Loan 

The PLUS loan is a loan offered to your parents to help fund your tuition. The loan is easy to get, with your parents not having a poor credit history being the only requirement. 

The loan is purely supplemental, so the limit on how much can be taken out is determined by your tuition; specifically, it makes up the difference between the cost of enrollment and your student loan. 

Think of it like this: Direct PLUS Loan amount = Cost of enrollment – Student loan amount. 

The reason that this loan exists is that it helps make up the difference without the child taking on that additional debt. Often, parents are in much stronger positions than their children to consistently pay back loans, so the difference is offered to them instead of you as a safer investment.

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