Your teenager is packing their bags and maybe asking for the car keys, excited to head to college.
But is your family behind the eight ball when it comes to paying for college costs? If so, here’s some good news: Although your financing options might have dwindled, it’s never too late to play catch-up.
For last-minute solutions to afford your child’s college costs, consider these three steps.
1. Contact the school’s financial aid office
Start by reaching out to the school’s financial aid office and explaining your situation. It could give helpful information about the following:
- Leftover aid: If the college earmarked grants or scholarships for students who declined admission, that aid still might be available. Ask if you and your student could avail of it.
- Campus employment: Ask about your student’s best opportunities to find on-campus employment so they can help pay for college costs.
- Payment plans: See if you can pay for tuition in smaller installments over the course of the year instead of in one lump sum.
- Emergency school loans: About 7 out of 10 schools have emergency student loan programs, according to the National Association of Student Personnel Administrators. One downside is that some school-based loan programs have three-figure borrowing limits and are meant for smaller expenses, such as books and supplies.
Your child’s financial aid office likely will instruct you to complete the Free Application for Federal Student Aid (FAFSA) as soon as possible (if you haven’t already). The FAFSA remains available until June 30 before your student’s freshman year, although your state or college might have an earlier deadline for completion. You can find your deadlines on the FAFSA website.
You also could negotiate your child’s financial aid package. However, that might be an uphill battle if you’ve left everything to the last minute. Still, you could appeal the award amount via a professional judgment review, particularly if your family’s finances have changed suddenly.
2. Raise as much cash as you can
Once you’re in touch with your student’s financial aid office, you should have a better handle on exactly how much money you’ll owe for the coming or current school year and when you’ll owe it.
Say you’ve enrolled in a payment plan under which you agreed to pay one-third of the outstanding fees for three consecutive months. Although the payment plan lessened your upfront costs, it didn’t diminish the total fees.
To meet the cost of tuition, ask your son or daughter to pitch in. You might offer them motivation to apply for scholarships on rolling deadlines or encourage them to start a side hustle to earn some extra cash.
Here are a few more ways to scrounge up the money you need to clear your outstanding balance with your student’s school:
- Fundraise: You could ask members of your family for help or solicit strangers online or offline. Graduates have been known to crowdfund student loan payments. You also could use online tools such as YouCaring and GoFundMe to raise money.
- Tap into retirement savings: You could tap into your retirement savings to offset college costs, although this likely will set back your retirement plan. You could borrow from your individual retirement account (IRA), for example, because the IRS doesn’t penalize early withdrawals from IRAs if they’re for qualified education expenses.
- Talk to your employer: Discuss your financial situation with your company’s human resources department. It could direct you to helpful resources for employees.
3. Consider federal and private student loans
If you have a bill coming due from your student’s school and no feasible way to raise the money on your own, you have the option of borrowing from a qualified lender. The federal government and top private student loan companies fall under that category.
Although you might be in a rush, don’t hurry through the process of choosing the right lender. Study the differences between borrowing from the federal government and from a private online lender, bank, or credit union.
With the federal government, for example, you or your student could borrow at a fixed interest rate and receive repayment protections and benefits, including pathways to loan forgiveness. Even the best private lender can’t match that.
Still, top-rated private lenders might suit your family if you have an excellent credit history. You could borrow a loan in your name or cosign your student’s loan. Either way, your superior credit score could net you a lower interest rate than what the federal government offers.
Be aware of timing, though. If your FAFSA was on file in time to receive a college award letter in early May before your student’s freshman year, you likely were offered federal student loans. Talk to your school’s financial aid office if you neglected this notice until later, as it can help you claim your unused federal aid.
You likely will work hand in hand with the aid office even if you take the private loan route. Top lenders such as College Ave will ask your school to certify your loan, a process that could take a few days or a few weeks. College Ave estimates that the entire process from application to disbursement could take as little as 10 days, but the exact timeline depends on your child’s school.
When comparing emergency loans from the school with federal and private loans, be wary of offers of instant student loans from shady lenders that promise next-day funding. In exchange for that speed, you might be stuck with a high interest rate and short repayment term.
Once you’ve paid for your student’s freshman year, begin the process of figuring out financial aid for their sophomore stint. You’ll have more time to prepare this second time around, so take advantage of it.
Need a student loan?Here are our top student loan lenders of 2021!
|1.04% – 11.98%1||Undergraduate, Graduate, and Parents|
|1.13% – 11.23%*,2||Undergraduate, Graduate, and Parents|
|3.80% – 9.36%3||Undergraduate and Graduate|
|1.05% – 11.44%4||Undergraduate and Graduate|
|1.22% – 11.66%5||Undergraduate and Graduate|
|2.76% – 7.14%6||Undergraduate and Graduate|
|1.24% – 11.99%7||Undergraduate and Graduate|
|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers. |
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.
4 Important Disclosures for Earnest.
5 Important Disclosures for SoFi.
UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.22% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.12% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.29% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.22% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
Undergraduate Rate Disclosure: Variable interest rates range from 2.76% – 7.14% (2.76% – 7.14% APR). Fixed interest rates range from 3.01% – 7.50% (3.01% – 7.50% APR).
Graduate Rate Disclosure: Variable interest rates range from 2.19% – 6.73% (2.19% – 6.73% APR). Fixed interest rates range from 2.89% – 7.09% (2.89%-7.09% APR).
Business/Law Rate Disclosure: Variable interest rates range from 1.36% – 9.54% (1.36% – 8.82% APR). Fixed interest rates range from 4.13% – 9.84% (4.13% – 9.12% APR).
Medical/Dental Rate Disclosure: Variable interest rates range from 1.36% – 8.34% (1.36% – 8.04% APR). Fixed interest rates range from 4.03% – 8.64% (4.03% – 8.34% APR).
Parent Loan Rate Disclosure: Variable interest rates range from 2.10% – 7.41% (2.10%-7.41% APR). Fixed interest rates range from 4.69% – 7.83% (4.69% – 7.83% APR).
Bar Study Rate Disclosure: Variable interest rates range from 4.45% – 9.60% (4.45% – 9.53% APR). Fixed interest rates range from 7.39% – 12.94% (7.38% – 12.81% APR).
Medical Residency Rate Disclosure: Variable interest rates range from 3.55% – 7.05% (3.55% – 6.77% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.07% APR).
Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2021, the one-month LIBOR rate is 0.11%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.
Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7 Important Disclosures for Discover.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.