Student Loan Dodgers

Students who are applying for college admission often do not consider the true cost of a college education. A student applicant’s primary concern is gaining admission to their college of choice. The cost of education does not factor in to a student’s college decisions until much later in the process.

When students do turn their attention to costs, they focus on the cost of tuition above all other expenses. This is a mistake because the other expenses – like fees, books, living expenses, and transportation costs – can increase the cost of a college education substantially.

Universities are under pressure to keep the cost of tuition down. Instead of passing along the increased costs of education in the form of tuition raises, some colleges and universities have imposed per-credit, per-class, and per-semester fees that can add as much as 40 to 50 percent to the cost of tuition. In most cases, the fees are mandatory and cannot be avoided.

To offset the out-of-pocket costs of tuition and fees, student applicants should look for grants and scholarships regularly. Most university libraries have grant and scholarship resources available to help students find unrestricted money that can be applied directly to a student’s tuition account. Scholarships and grants are the “gold standard” of financial aid. These monies do not have to be repaid. In many cases, the scholarships are not renewable, meaning that they’re a one-time-only award, and recipients will need to look for new scholarship sources each semester or year.

Federally-backed student loans are the next most desirable type of student aid. Subsidized student loans are meant for students whose family income levels fall within certain Federal guidelines. With these college loans, the Federal government pays the interest that accumulates on these student loans while the student is in school, reducing the overall amount of money a student must repay.

Unsubsidized Federal student loans are the next most desirable type of student aid. Unsubsidized student loans are available to all students, but are subject to lifetime lending caps, which may or may not cover the student’s college expenses. With unsubsidized student loans, the borrower pays the entire interest accumulation on the student loan, but payments are deferred until the student leaves the university.

Private student loans are the most widely available and flexible options, but they should be reserved for covering those costs that cannot be covered with scholarships or federal student loans. Student borrowers should shop for the best possible deals with private student loans. Often, the interest rates and borrowing terms on private student loans can mean tens of thousands of dollars in savings (or added costs!), so comparison shopping for student loans is definitely in order!

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