"Don't even THINK of it!" says Catherine
B. Reynolds, chairman of EduCap Inc., provider of the Loan to
Learn program (loantolearn.com). "Not getting a college degree
is the most expensive mistake you'll ever make in your life! I
can't say it often enough: A college degree is not a cost, it's
an investment. And the average return on that investment is about
20 times what you've invested into it."
Reynolds says that over the course of a lifetime,
a typical college graduate will make 80 percent more than someone
with just a high school diploma-that's more than $1 million over
Help for college tuition comes in three kinds:
free money (scholarships and grants), federal loans (from the
government) and private loans (from banks and other lenders).
Start with the freebies
"First look at free money-things that don't need to be repaid,
like grants or scholarships. There are so many scholarships out
there," says Erin Korsvall, a spokesperson for Sallie Mae,
a student loan company (collegeanswer.com). "Put a little
effort into it. If you get $200 here, $500 there, that's money
in your pocket."
Chances are, you'll still need more money for
school than you'll receive through scholarships and grants. That's
why there are student loans available.
Look into loans
Student loans come in two types: federal and private. Filling
out the Free Application for Federal Student Aid (aka the FAFSA;
get one at www.fafsa.ed.gov) will get you started on the process
to apply for federal loans and grants.
Korsvall says the Stafford Loan is the most common
type of federal loan. With the Stafford Loan, freshmen can borrow
up to $2,625. This loan is taken out in your name. You can also
take out a Perkins Loan, which is set aside for the neediest students.
If your parents want to help you with tuition,
they're allowed to take out a PLUS loan, which allows parents
to borrow all you need for college, including money for room,
board, books and travel.
How much you can borrow in private funding from
a private lender depends on your credit history and how much you
need. There is no deadline when applying for private student loans.
And your FAFSA doesn't count for private loans; you'll need to
apply directly to the lender.
Paying it back
"Believe it or not, the people who run student loan companies
are human!" says Reynolds. "We're very much aware of
the fact that life can sometimes play incredibly unfair tricks
Before you sign your loan agreement, discuss with
your lender when you'll start paying your loans back. Will you
have to pay back a little each month, or will your payments not
start until you leave school for good? Also ask your lender what
happens if you find you can't make the payments. Your lender can
work with you to come up with a repayment plan that accounts for
your problems. Another great resource is your future college.
The financial aid officers there will be able to answer any of
Korsvall says the key is not to panic. Need more
"I honestly don't think you can put a price on all the intangible
benefits of going to college," Reynolds says. "From
a social, intellectual and cultural standpoint, college is a mind-broadening
and life-altering experience that you just shouldn't miss out
This article is provided by The
Next Step Magazine (nextSTEPmag.com), a publication that helps
students prepare for life after high school.