I read how some people whine about the student loan crisis while others complain how exploitative college loans/tuition are to students. OK, less than half of a college's income is from tuition. Much more of it is from endowments, sporting events, federal grants, and state government funds. Colleges are hardly exploiting students by giving them an education. If one thinks college is worthless, then good luck finding a job that doesn't require education beyond a high diploma in this digital world. Many middle aged people go/return to college to get better paying jobs so many would disagree college education is worthless.
To pay college expenses, it is best to figure out first what occupation you want to do when you graduate. What are your interests and what are you good at? If you can't decide, work summer and/or part-time jobs until you figure it out. I have met people who didn't go to college until their late 20's when they decided what they wanted to do. If you are still a teen living in your parents' house, then exploring different occupations would be good for you and you will quickly learn what employers expect from their employees (like they are paying you to work not text your friends all day and wanting time off to attend a party mostly likely will demand that you find a replacement for your shift). And working teens learn about paying income taxes, knowledge they will need in adulthood (Children are dependents of their parents until they stop being full-time students at least 5 months out of the year or turn 24, whichever comes first, so your parents will receive any education credits and not you).
Second step after deciding on a occupation is to research what education and experience is required to get there. Not every occupation requires a PHD or professional license and of course, there are occupations that do. Some occupations require internships or apprenticeships, which are often planned a year in advance. And if income is an issue, then remember a licensed welder makes about the same amount of money as a CPA. Math and Science areas tend to make more income than English and Social Studies (History, Geography, Philosophy) areas. Brain work often pays more than physical labor.
Now that you researched what degree you need to get your foot in the door, then you research what colleges or universities offer the degree you need. Next, research how much money you need to attend your college choices. It is best to research the cost of tuition before applying for admission.
Next you figure out how to pay for your required tuition of the college/university that accepted your admission application. There are more than student loans available to pay for tuition. If your high school offers college credit classes, take them to save on tuition expenses. Many colleges will accept transfer credits up to 8 years. There are community colleges that offer classes to high school students (for a fee) so check those out in your area. Many drop out high school students go to community colleges to obtain GED certificates. Since general classes are required the first two years of a 4 year Bachelor degree, many poor students go to cheaper community colleges for the first two general studies years and state funded university the second two specialized in major years. Apply for scholarships, there are academic and athletic scholarships available. There are also scholarships for minorities, single mothers, artists, and vets. Even more scholarships can be found through businesses, religious organizations, and schools. Research all scholarships you qualify for. Some people join the military to get free higher education. Some grandparents buy savings bonds for their grandchildren that can be cashed in when attending college (Series EE bonds don't pay income tax on interest if use for education). Parents can set up education savings accounts for their children. Funds from IRAs can be used to pay for education without early withdrawal penalties. All colleges have a tutoring program so if you get an A in a class, be sure to apply to tutor other students in that class for pay.
Once all available above funds are exhausted, you apply for federal student aid. Apply to several colleges or universities and go to the one that offers the best financial aid package. Just because you get accepted doesn't mean you have to attend if you find a better deal somewhere else. Scholarships do effect financial aid in that less student loans are offered the more scholarship money you receive. There are grants that you don't have to pay back. There is work study where you work a job on campus and get paid a certain amount per semester(and looks good on a resume). Work study is set up to no more than 20 hours a week and pay rate is determined so that the allowed amount is earned by the end of the semester (so not exactly minimum wage). There are student loans for parents (PLUS). There are student loans for students (FAFSA) which have limitations on amounts given to the student depending on degree, what year the student is in, and if dependent on parents or independent adult. There are 3 kinds of student loans and must start repaying once student leaves the school whether they graduated or not. 2 kinds are government backed loans that go through government chosen banks. The interest rate on these loans is determined by Congress and can change over time (often in single digits). One type is Subsidized loans where interest does not start accruing until after student leaves school. Second type is Unsubsidized loans where interest accrues instantly so student may pay on interest while they are taking classes. Any interest accrued by the time student leaves school is capitalized, meaning Interest is turned into Principal that you have pay interest on. The third type of student loan is Private loans that are not government backed. Many banks and student loan companies offer these loans. The amount limit is determined by the company/bank which is dependent on income of the student and/or required co-signer. The interest on these loans are determined by credit scores of the applicants.
Once student leaves the college/university, there is usually a 6 month grace period before student loans repayments are required. If you are considering student loan forgiveness, then you much research to see if you qualify for that. And remember you must pay income tax on any cancelled student loan amount. If you are considering the student loan forgiveness route, then do not consolidate or refinance your loans because consolidated or refinanced loans cannot receive forgiveness. Student loans are usually 10 years in length, unless you refinance them to make them longer. If you do not qualify for student loan forgiveness, you can refinance your loan(s) at anytime during your repayment which means change the interest rate and/or repayment amount. If you can get a better rate or repayment amount, it is worth researching. If you don't like the result you can cancel the refinancing (if you say nothing then they refinance anyway). To save on interest on these student loans, you can pay an extra amount on your repayments. Repayments go to interest first and then Principal second which is why these amounts are different each month on your statement. For example, your repayment amount is $100 and you write your check for $150. That extra $50 will go towards principal and therefore, less interest you have to pay overall.
