I Didn’t Get Enough Financial Aid: Now What?

Tuition and fees for the 2020 to 2021 academic year averaged $11,171 at in-state public colleges, and a whopping $41,411 at private colleges. And the price tag for an undergraduate degree keeps going up every year. Any way you look at it, college is a huge expense for students and their family.

Most schools offer financial aid to make college more affordable. But sometimes your initial financial aid offer, whether that includes need-based aid, federal loans, or perhaps both, just aren’t enough to cover the cost. And your family may not be in a position to help you make up the difference.

You know that a college education is valuable and are hopeful that it will set you on the path to higher earnings over the course of your career. But what do you do if you can’t afford college, even with financial aid?

Take heart: You don’t need a trust fund to be able to earn a college degree. There are many options out there to help you pay for higher education. Of course, navigating them can be a challenge, especially if you haven’t had to manage major financial responsibilities until now.

The key is doing the research and giving yourself enough time to take advantage of all the opportunities potentially available to you. Here’s a few ideas on how you could get more money for school:

Applying for Scholarships and Grants

There’s lots of “free money” out there—in the form of scholarships and grants—to help fund college tuition. You can start by asking the admissions or financial aid departments at the school you plan to attend about opportunities the institution offers.

Aid might be need-based, merit-based, or even a combination of both.

But you can also look for funding options outside your school of choice. Many local, regional, and national organizations also offer scholarships for college students. A search engine like FastWeb or FinAid can help you hunt down those that are a good fit.

It’s important to take the time to carefully prepare your application materials, which often include a transcript, personal statement, and personal references. You may want to have a teacher, parent, or guidance counselor read over materials and give you feedback. And don’t forget that a bunch of smaller scholarships or grants can add up and help defray the cost of college.

Getting a Work-Study Job

Another way to help pay for college is to work while you’re in school. Federal student aid packages may include a job through the Federal Work-Study program, which aims to fund part-time jobs that are (ideally) in the public interest or related to your field of study. Federal work-study is awarded based on financial need, so it may not be part of every federal student aid package.

These jobs may be on or off campus, at a non-profit organization, a government agency, or simply within your university. Some schools also set up work-study jobs with for-profit employers, which ideally are relevant to what you’re studying. These jobs pay at least minimum wage, but sometimes more, depending on the position.

With a work-study job, you’re typically paid by the hour by your school, at least once a month. The number of hours you can work is limited and set by your school. To get the full low-down, you can ask your school’s financial aid office whether they participate in the Federal Work-Study program, how many hours you qualify for, and what job opportunities exist.

Note that qualifying for work study doesn’t automatically guarantee you a job—you may still need to find one and apply for it. These opportunities are often limited, so it’s probably a good idea to start gathering information early if you decide to go this route.

Finding A Part-Time Job

If you can’t find a work-study opportunity, and you’re unable to qualify for any additional scholarships or aid, you can look for a part-time job on your own. Your college might have internal job boards that list on-campus jobs for students or jobs that alumni have posted. Because you’re in the same network (either at your school or via alumni), you might have a leg up on outside applicants.

If you don’t find the right fit, you can check external job sites for part-time opportunities. You can be proactive by asking your professors, academic departments, family friends, or establishments around town whether they are looking for help.

A part-time job can not only be a great way to earn money, but it can also help you build your resume. Potential gigs could include serving as a research assistant, tour guide, waiter, catering assistant, tutor, and more. Once you start earning a part-time income, you’ll, of course, have to decide what to do with it. You’ll likely want to prioritize using the additional funds for tuition and basic living expenses.

Taking Out Federal Student Loans

If you still need more funds to fill the tuition gap, taking out additional student loans may still be an option. It’s likely that if you filled out the FAFSA® and received a federal financial aid package, you may have already been awarded federal student loans.

However, it might be worth considering whether you can take out additional federal loans, because they offer fixed interest rates and more flexible repayment terms than most private lenders. In most cases, student loans from the federal government don’t require a credit check or a cosigner, which can be especially helpful if you haven’t had time to build up a credit history.

As an undergraduate, you can take out two different types of loans under the William D. Ford Federal Direct Loan program. One of these being the Direct Subsidized Loan, which is awarded based on financial need. If you qualify for this loan, you will not be responsible for the interest while you’re in school or for six months after you graduate.

You can also take out a Direct Unsubsidized Loan, which does not depend on financial need. Interest on this loan will accrue while you’re in school and during the six-month grace period, though you will not be responsible for paying that interest until your repayment period begins. And you don’t have to start repaying subsidized or unsubsidized federal loans until you graduate or drop below half-time enrollment (and after the six-month grace period).

Currently, you can take out anywhere from $5,500 to $12,500 per year in federal loans for your first year as an undergraduate. The federal loan limits change depending on whether you are a dependent and your year in school.

A parent can also take out a Direct PLUS Loan from the federal government to help you pay for school. They can borrow as much as your total cost of attendance, after any other financial aid you’ve gotten.

In order to qualify for a Direct PLUS Loan as a parent of a dependent undergrad, they will have to go through a credit check and must not have “adverse credit history.” And if parents request a deferment, they don’t necessarily have to start repaying their loans until six months after their child graduates or drops below part-time enrollment.

Adding Private Student Loans

If you weren’t able to get enough in federal aid, and your parents aren’t able to take out a loan on your behalf or cover the balance of your tuition, you may be able to borrow additional loans from a private lender.

You can start learning what private student loans are available by inquiring with a variety of lenders. You may want to compare their interest rates and loan terms to make sure you’re finding the best loan fit for you. As you’re shopping around, keep in mind that a fixed interest rate will stay the same for the life of a loan, while a variable rate can change over time as market interest rates change.

It is important to read the terms carefully to understand what you will owe and when payments will be due. If you don’t qualify on your own, possibly due to your credit score, income, or employment status, you can ask a parent or family friend with a good credit history to serve as a co-signer.

Considering Student Loan Refinancing

If you take out student loans, refinancing them once you graduate can be a way to save money when it comes time to repay. Refinancing involves taking out a single new loan and using it to repay all your existing loans, which can include federal loans, private ones, or both. However, keep in mind that refinancing your student loans with a private lender means forfeiting federal loan benefits like deferment, forbearance, or income-driven repayment plans.

A new refinanced loan comes with different terms and a different interest rate, which can typically be either fixed or variable. If you’re able to get a lower interest rate than your existing loans, that can save money over time—depending on your new loan term, of course.

Among other factors, private lenders might take into account your credit history and income when determining your refinanced interest rate and loan terms.

The Takeaway

A higher education is an investment in your future. And just because you didn’t get enough financial aid doesn’t mean you can’t afford to attend college. By applying for scholarships, taking on part-time jobs, applying for loans, and looking into refinancing student loans after college, you can find a responsible path to achieving your dreams.

If it seems like a private student loan will help you tackle some of the expenses, consider the options SoFi has to offer. You can apply online in minutes and if needed, easily add a cosigner. Plus, flexible loan repayment options like partial, deferred, or interest-only payments put a bit less strain on your budget upon graduation.

This post originally appeared on SoFi and has been republished with permission.

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