6 Ways to Help Cut College Costs

Updated: Aug 25, 2020

According to the College Board, in the 2012-2013 academic year, the federal government provided 170 billion dollars in financial aid, with an additional 68 billion dollars coming from states and other sources.

Navigating the world of financial aid can be tricky. Often, there’s not a lot of explanation regarding the different kinds of aid available and what it all means. To help you better understand the important financial aid terms, here is a list of terms for both parents and students


The Free Application for Federal Student Aid, also known as the FAFSA, is an online application completed by prospective and current college students (undergraduate and graduate) and their families to determine their eligibility for student financial aid. The vast majority of students are eligible for some form of aid, but you will not receive any aid without filling out the FAFSA. And finally, pay attention to the application deadlines. There are federal, state, and school-specific deadlines. The federal deadline is typically June 30th. State and school-specific deadlines vary, so make sure you know the deadline in advance.

2. Grants

Grants are free money, meaning you never have to repay them. The federal government, state governments, colleges, and sometimes independent organizations award students to help cover the cost of their college education. Grants are typically need-based and are often awarded on a first come, first serve basis, so it is important to submit your FAFSA as soon as possible in order to receive the maximum amount of aid.

The most common federal grant is called the Pell Grant. In Texas, we also have the Texas Public Education Grant which provides money for students attending in-state schools.

3. Scholarships

Scholarships also provide students with free money; however, unlike grants, scholarships are generally merit based. Some scholarships are "full scholarships," which means they cover the entire cost of your attendance: tuition & fees, room & board, books & supplies, and other expenses. And other scholarships are "partial scholarships," which means they only cover part of your cost of attendance such as the tuition. Either way, scholarships are typically awarded to students of high merit, which means the student has demonstrated excellence for years such as the valedictorian of the class or has an extraordinary ability such as a student-athlete.

The sources of scholarships are nearly endless, but having the discipline and committed to receiving one are rare.

4. Work study programs

Work study programs offers students the opportunity to earn money while attending school, i.e. a college or a university. Students work part-time jobs either at the school or through a non-profit affiliated with the federal work study program. In general, work study participants are given jobs that, in some way, are related to their field of study. This gives students an advantage for their post college careers by giving them experience they can use once they're in the workforce. Participants are then expected to use the money they earned to help pay for the cost of their education. While it’s not easy to work and go to school, the experience you gain may be invaluable to your future.

5. Loans

The vast majority of financial aid comes in the form of loans. Unlike other forms of financial aid, loans must be repaid. As with any loan, it is critical to understand the terms of the loan, i.e. the principal amount, interest rate, period of time, and payment schedule before signing the dotted line.

Most loans are awarded through the federal government, and they are either “subsidized” or “unsubsidized”. The differences between the two types of loans are slight, but the main difference is in a subsidized loan, such as the Perkins Loan, the government pays the interest while you are in school, while with an unsubsidized loan, such as the Stafford Loan, the interest begins accumulating as soon as the funds are disbursed. Although this may seem like a minor difference, it translates into thousands of dollars over the term of the loan. So make sure you know the type of loan you’re accepting.

6. Loan Forgiveness

And finally, if you have a heart for public service, then make sure to research loan forgiveness programs. Students who decide to work full-time in public service fields, i.e. education, military service, law enforcement, and public interest law, may qualify for forgiveness of the remaining balance due on their loans.

Attending college requires a substantial investment of time and money. As the cost of college attendance continues to soar and government subsidies for higher education decrease, understanding the financial aid process is more important than ever. Knowing these terms and what they mean empower you to take control of your future and can help make college as affordable as possible.

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