Going Back to School: 7 Ways to Finance Your Education and Earn Higher Pay

All most all students need some form of financial aid to successfully complete their postsecondary education program. However, there are so many different types of financial aid available it’s hard to know which is best for you and at times can be very confusing. While there are several types of aid, most types can fit into one of four categories; scholarships, grants, work-study and loans. Scholarships There is nearly an endless amount of scholarships available to apply for. The key here is not only to do your best job applying but also to effectively search for scholarships that you are most qualified for. Check with your college or university first to see what scholarship opportunities they have open. Then search the web for local, state and national scholarships that you would be a good candidate for. One search tool is ScholarshipExperts, which has been voted by Forbes magazine as the best scholarship website every year since 2003. ScholarshipExperts even has listings of weird and wacky scholarships for those who do not necessarily have high grade point averages or trophies but who may have other more unusual characteristics or talents. Grants Grants are a form of financial aid that never has to be repaid and is therefore highly coveted. On the federal level there are many types of grants. The Federal Pell grant is one of the most broadly awarded although only undergraduates are eligible. The amount of the grant is based on need and cost of attendance with the maximum Pell Grant award for the 2008-09 award year (July 1, 2008 to June 30, 2009) being $4,731. Another, the Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with exceptional financial need. This grant is only awarded to those students with the lowest Expected Family Contributions (EFCs) and offers up to $4,000 per year. There are also more specialized types of grants such as the Academic Competitiveness Grant that was recently created in the 2006 – 2007 school year for those students with high grade point averages and excellent academic performance records. Also the National Science and Mathematics Access to Retain Talent Grant, sometimes called the National Smart Grant, is available to third and fourth year undergraduates majoring in the sciences. A new grant instated just this year, the TEACH Grant, is for undergraduate or graduate students who will go into teaching in the public school system after graduation. For more information or detailed eligibility requirements for federal grants you can check out the website of Federal Student Aid, an office of the U.S. Department of Education. Also it is important to note that each state has several grant programs as does nearly every post secondary institution, and these options should be thoroughly explored in addition to federal grant opportunities. Work-Study The Federal Work-Study (FWS) program awards campus based part time jobs to students who have financial need. These jobs offer a set amount of hours but provide a flexible schedule that accommodates a student’s need for study time. If possible the program will encourage and facilitate students doing work related to their course of study. Earnings vary and undergraduates are paid by the hour and graduate students are paid either by the hour or on salary depending on the nature and type of work. All institutions participating in this program must pay working students at least once per month. Loans Loans must be repaid and terms on loans vary greatly and are sometimes complex. In general there are two types of loans; federal and private. Federal loans will always have more favorable terms for you than private loans and should be considered first. Here is a breakdown of all the federal loans: Federal Perkins Loan A Federal Perkins Loan has a very low-interest rate of only 5% and is available to undergraduate, post baccalaureate, and graduate students with a preference to students with exceptional financial need. Undergraduates can borrow up to $4,000 per year and graduate students can borrow up to $8,000 per year. Stafford Loans Stafford loans come in a few different forms and are one of the US Department of Education’s major aid programs, as nearly every student is eligible for at least one type of Stafford loan. Stafford loans come subsidized (interest does not accrue while in school) or unsubsidized (interest accrues from the day the loan is disbursed), and which one a student is offered is dependent on need. There are two basic types of Stafford loans; Direct Stafford loans and FFEL Stafford loans, either of which can be subsidized or unsubsidized. The loans themselves are very similar, the only real difference being that under the Direct Loan Program, schools get the funds for the loans directly from the U.S. government. But not all schools participate in the Direct Loan Program, and so then funds for the loan are lent from a bank, credit union, or other lender participating in the FFEL Program. Interest rates for both of these loans are variable and are reset in July of each year, however the interest rates will never exceed 8.25% PLUS Loans PLUS Loans are available to parents supporting dependent students and graduate students with good credit histories. However, repayment begins on the date of the last disbursement of the loan. Interest rates are fixed and range from 7.9% to 8.2% Finally, as far as loans, you do have more options than just federal loans. Most students with credit worthy cosigners can apply for and receive private loan funding. While private loans (sometimes called alternative loans) can help bridge the gap if other forms of more favorable aid fall short they should always be a last resort. Interest rates on these loans vary vastly by lender and can sometimes be reasonable and not much higher than federal loans but sometimes can be as high as 18 – 20%, which is right on par with the interest rates charged by most credit card companies. Rates can also be variable or fixed and the interest rate you’re given is dependent on your credit and your cosigner’s credit, the lender and the state of the economy in general.