Tis the season for receiving college acceptance letters.  It is a very exciting time for parents and students alike. Now the important question – how will you going to pay for it? Of course, funds from savings can be used to pay tuition and other college expenses. Fortunate is the student who also receives a letter saying that he or she has been awarded a full scholarship. Unfortunately, that is not the case for most students. Financial aid comes in the form of scholarships, grants, loans, and work/study.

·      Scholarships are a form of financial aid that does not have to be repaid. It does, however, come with conditions to maintain a certain grade point average and/or perform specified activities (athletics, research, performances) related to the type of scholarship.

·      Grants are similar to scholarships but some grants may have a repayment clause.

·      Loans are funds that are borrowed to use for tuition and other expenses related to the college experience such as room, board, transportation, and books.  Federal loans may be subsidized with a delayed interest clause or unsubsidized where payment is delayed but the interest starts to accrue as soon as the loan is taken. Parent loans have payments that begin right after the loan is disbursed.

·      Work/study provides the student with a job through the college, on or off campus, with earnings that will be credited toward the college expenses. The student is given limited hours to work at a predetermined rate. The student cannot work extra hours on the work/study employment to make more money for school or personal expenses.

·      One of the forms of payment that is rarely discussed is the tuition payment plan.  Many schools have a 10-month interest-free payment plan that parents and students can use to pay all or part of the student’s tuition and related expenses. There is a small fee to enroll but it is nowhere near the amount of interest that is paid with a loan.

In addition to financial aid supplied through the school, a student can look for alternative sources of assistance through scholarship websites such as www.fastweb.com and www.collegeboard.com.  Some organizations provide scholarship opportunities for its members such as credit unions and unions. The internet is a great resource for finding information on colleges and the money to pay for it.

Some students go through school as they work part or full time jobs. There are employers that support employees’ efforts to improve their skills through tuition reimbursement (paying after the course has been completed and paid for) or through tuition remission (pay for the course up front). Either way, it is a great way to pay for college as a student gains work experience. It greatly reduces the amount of debt paid to complete an education.

However a student chooses to pay for college, he or she should consider the pros and cons the long and short-term implications of the decisions made to acquire an education.