College costs have risen over the decades. Bloomberg
reported that costs rose 500% between 1985 and 2013. As such, paying for school
has become a big concern for parents and students alike, since many students
are graduating saddled with mounds of debt. The Institute for College Access
and Success reported that the average for 2014 grads was nearly $30,000.
A recent Gallup poll noted that seven of ten parents said
they were worried about the issue and that paying for school is a top money
concern. So, how you borrow to pay for school has never been more important.
The same Gallup poll found that 73% of parents turn to their
financial institution to help them through major life events. Many
credit unions are doing their part by offering fair-value private student
lending, along with financial wellness programs. This helps members choose what
kind of funding is right for them and how they can maximize their dollars.
One thing
every student should do before selecting funding options is to fill out a Free
Application for Federal Student Aid (FAFSA). Filling out that application and sending it in as soon as possible
will leave you open to more forms of funding.
Here is a short primer on student loans and how credit
unions are working to help students and families cover the costs of college.
Types Of Student
Loans
Grants and
Scholarships
The best way to get money for higher education is to get it
for free. Scholarships can be given by schools, businesses, community groups
and other organizations, and usually an application process is involved. You
can earn scholarships for academics, extracurricular activities, sports,
volunteering and other factors.
Grants are based on need, meaning your ability to pay, and
are given by the federal government, local governments or private and
non-profit organizations.
Federal Loans
Federal student loans are the main source of funding for
many students, and Federal Direct loans are usually the least expensive option.
You must repay these loans with interest. Find out more about Federal Student
Loans here.
Work-Study Programs
Federal work-study programs provide part-time jobs for
students to help them pay for college.
Find out more about work-study programs here.
Private Student Loans
These loans mostly come from your financial institution,
like a credit union. They provide a low-rate loan to cover educational
expenses. Many parents and students use these loans to cover what scholarships
and Federal loans do not. Credit scores are often checked for these types of
loans, meaning students may need a co-borrower. Make sure to check rates to get
the lowest one possible with the best repayment terms to make things
affordable. Oftentimes credit unions will have the lowest rates, and with
partners like Credit Union Student Choice, you’ll be able to make an informed decision.
Credit Union Student
Choice
Credit Union Student Choice is a credit union service organization
(CUSO) that partners with credit unions to offer a comprehensive solution that
helps them deliver fair-value private education loans and corresponding
financial education to students and families, including navigating the various
obstacles of attending college.
The program is supported across multiple channels,
including helpful seminars at partner credit unions and local high schools and
colleges. An online financial wellness platform helps students and their
families make effective personal finance, student loan, and career decisions.
This platform, featuring financial literacy tools for college students and
recent graduates, helps before, during and after the college years, providing
resources and information on schools, career paths, budgeting and workplace
expectations. There’s even an interactive job bank to help graduates find
employment in cities across the country.
For more information, visit here.
Whatever choice you make for funding your education,
you’ll be more prepared to pay knowing that there are multiple options
available to you.
