What Types of College Financing Options Are Available?
Many college financing options are available to those who need assistance in paying tuition and related costs. Read on for more information regarding the types of college financing options available to students and their parents.
College Financing Options
From high tuition to the cost of textbooks, attending college is an expensive venture. However, these costs can be offset by a variety of college financing options. Among the types of college financing options available are those shown in this list:
- Student loans
- Parent loans
Important Facts about College Financing Options
|Common Types||Federal loans, school loans, private loans, grants, sports/academic scholarships|
|Interest Rate||6.84% (Parent Loan for Undergraduate Students)|
|Online Availability||Free application for federal student aid online|
|Eligibility||U.S. citizen, eligible noncitizen, financial need, enrollment (federal loans)|
Source: U.S. Department of Education Federal Student Aid Office
Students can apply for both federal and private loans. Federal loans are low-interest loans guaranteed by the U.S. government. Students must submit a Free Application for Federal Student Aid (FASFA) to determine eligibility for federal student loans. Private student loans are offered by lending institutions and are popular choices for those looking to cover additional costs not covered by federal loans.
Many federal and state grants are made available to students to help pay exorbitant college costs. Specific grants are available to low-income students, minorities, graduate students and students with exemplary academic records. There are also grants for women and specialized grants for students majoring in particular areas of study.
Students can apply for many types of scholarships, including those for athletics, minority status or academic excellence. Students must typically submit an essay or at least a personal data form when applying for a scholarship. There are thousands of scholarships made available by private organizations, non-profit organizations and corporations every year.
Many students turn to parents as a college financing option. Through federal loan programs such as the Parent Loan for Undergraduate Students (PLUS), parents can borrow up to the entire amount of a child's college tuition. The amount of the loan is less any other financial aid given to the student. These fixed-rate loans have a standard repayment period of up to ten years.