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 2018!
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2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay 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.
* 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.
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|3.54% – 12.07%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.95% – 12.10%||Undergraduate and Graduate||Visit Ascent|
|4.00% – 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|3.94% – 12.19%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.63% – 9.71%||Undergraduate and Graduate||Visit LendKey|
|3.62% – 9.79%||Undergraduate, Graduate, and Parents||Visit CommonBond|