If most parents offer to fund their child's tuition fees, it is assumed that their financial situation will remain relatively unchanged. Even with minor drops in income or temporary periods of unemployment, a solid plan is likely to take the child through to graduation.
Unfortunately, what these plans fail to take into account is a global pandemic that is devastating the economy and the labor market.
Now, many parents of college-aged children struggle to stay afloat – and even less do they afford tuition fees. This leaves their children, who previously planned to graduate from college with little or no debt, in an uncomfortable position.
What can you do if you're a college student suddenly stuck with the bill for your college expenses? Below are some strategies to help you stay on track.
Contact the university
Your first step is to contact the university and let them know that your financial situation has changed. You may need to write something that explains how your parents' income has decreased.
Many students believe that the federal government is responsible for distributing aid to students, but federal aid is actually distributed directly by the schools themselves. In other words, your university is the only institution authorized to provide additional assistance. If they decide to stop giving out loans or grants, you are out of luck.
Ask your advisor if you can apply for scholarships. Ask about both general university scholarships and department-specific scholarships if you've already signed up for a major. If you have a good relationship with a professor, reach out to them for suggestions on where to find more scholarship opportunities.
Some colleges also have emergency grants for students. Contact the grant office and ask how to apply for this.
Try to graduate early
Getting an early degree can save you thousands or even tens of thousands in tuition fees, as well as room and board costs. The sooner you graduate, the sooner you can get a job and pay back your student loan.
Ask your advisor whether an early deal is possible for you. You may have to take more courses per semester than you planned, and the courses you enroll for should be strategic.
Fill out the FAFSA
If your parents have never completed the Free State Student Aid Application (FAFSA) because they paid your college in full, now is the time to complete it. The FAFSA is used by universities to determine eligibility for needs-based and performance-oriented help. Most schools require the FAFSA to provide scholarships and assignments.
Because the FAFSA uses income information from a previous tax return, it doesn't show whether your parents recently lost their jobs or went on vacation. However, once you've submitted the FAFSA, you can send your university a message explaining your current situation.
Be sure to explain this to your parents if they think submitting the FAFSA is a waste of time. Some schools don't even offer merit-based scholarships to students who haven't completed the FAFSA.
look for a job
If you don't already have a job, now is the time to get one. Check out online bulletin boards to see what opportunities are available around campus. Check on job posting sites like Monster, Indeed, and LinkedIn. Make sure you have a well-drawn up resume and cover letter.
Try to think outside the box. If you are a talented graphic designer, start a freelance business and look for clients on sites like Upwork or Fiverr. If you are fluent in Spanish, you will teach other students. Look for jobs that allow you to study when things are slow or that provide nourishment while you work.
Ask everyone you know for suggestions, including past and current professors, senior students, and counselors. If you had a job at home, contact your old boss. With so many people working remotely these days, they may be ready to hire you even if you are in another city.
It may be too late to apply for a Resident Advisor (RA) position now, but consider this as an option for next year. An RA lives in the dormitories and receives free or discounted room and board in exchange for monitoring students, answering their questions, performing regular inspections, and other duties.
Take out personal loans
If you still need more cash after you've used up your federal student loans and applied for more scholarships, private student loans may be the next best option.
Private student loans usually have higher interest rates and fewer repayment and forgiveness options than federal loans. In 2020, the federal student loan rate was 2.75%, while the private student loan rate was between 3.53% and 14.50%.
Private lenders have higher credit limits than the federal government and typically loan out the cost of tuition minus any financial assistance. For example, if your tuition fees are $ 35,000 per year and federal loans and grants cover $ 10,000 per year, a private lender will offer you $ 25,000 annually.
Getting personal loans should be a last resort because the interest rates are so high and there is little recourse if you graduate and can't find a job. Using personal loans can be fine if you only have a semester or two left before graduation. Freshers should be reluctant to use this strategy, however.
Consider moving to a less expensive school
Before resorting to private student loans to finance your education, consider moving to a cheaper university. The average tuition at a public state university for the 2019-2020 school year was $ 10,440. The cost of a public university out of state was $ 26,820 and the cost of a private university was $ 36,880.
If you can move to a public college and move home, you can save on both tuition fees and housing.
Moving to another college may sound like a drastic step, but it might be necessary if the alternative is to borrow $ 100,000 from student loans. Remember, no one knows how long this pandemic and recession will last. So it's better to be conservative.
Zina Kumok (104 posts)
Zina Kumok is a freelance writer who specializes in personal finance. As a former reporter, she has covered murder trials, the Final Four, and everything in between. It has been featured in Lifehacker, DailyWorth, and Time. Read how she repaid $ 28,000 in student loans at Conscious Coins in three years.