Ibrahim Gardner
The cost of college education has been a source of concern for students and their families, with many struggling to keep up with tuition fees and other expenses. While some students rely on financial aid from their parents or guardians, an increasing number are paying their own way through college. According to various surveys, between 61% and 67% of college students are solely responsible for financing their education, with many working part-time or full-time jobs to make ends meet. This shift towards self-funding has been accompanied by a growing demand for more affordable tuition fees and increased support for students struggling with the cost of their education.
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What You'll Learn
Students' income and savings
The majority of college students are paying for their education themselves, with a higher percentage of two-year students paying their own way. Sixty-one percent of four-year students are solely paying their education costs, and 29% are splitting costs with parents or family. Meanwhile, 71% of two-year students are paying all costs while only 19% are splitting costs with parents/family. Students are struggling with education costs, and tuition is the biggest burden.
Many students work while in college to help pay for their education or other living expenses. In 2020, one-quarter (25%) of full-time students worked at least 20 hours a week, and two-thirds (66%) of part-time students worked at least 20 hours a week. 40% of part-time students worked at least 35 hours a week. The Federal Work-Study Program (FWS) helps place students with financial aid in jobs to earn money while attending college. Over 3,000 schools participated in FWS in 2017-2018, and about 613,000 students received FWS earnings. On average, students earned about $1,650 for the school year.
There are a variety of ways to save for college. One option is a 529 plan, which offers tax advantages and the potential to earn a return on your investment. Earnings in the account can grow tax-free, and withdrawals are also free from federal taxes when used for qualified education expenses. Another option is a Coverdell ESA, which also has tax advantages. There is an annual maximum contribution of $2,000 per beneficiary, and there are income restrictions for those who want to contribute. A custodial account can be used by adults to save money on behalf of a minor, and a traditional savings account can also be designated for educational expenses.
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Student loans
The high costs of tuition, fees, and other expenses at colleges often pose a challenge for students, with many struggling to finance their education. In fact, a recent report revealed that college students may even have to withdraw due to these high costs. According to various surveys, about two-thirds of college students are fully paying for their education, with a higher percentage of two-year students paying their own way. This amounts to 61% of four-year students paying their education costs and 71% of two-year students doing the same.
Before considering private student loans, it is advisable to explore free money options, such as grants, scholarships, and federal aid. The Free Application for Federal Student Aid (FAFSA) helps determine eligibility for need-based grants, including military family aid and grants for veterans. Additionally, students can work while studying to help finance their education. The Federal Work-Study Program (FWS) assists students in finding jobs, with participants earning an average of $1,650 for the school year.
When applying for student loans, individuals should evaluate their anticipated monthly loan payments and future earning potential. Lenders will also consider the applicant's credit score during the approval process. It is important to remember that loan repayment amounts include the borrowed sum plus interest, and timely repayment is essential.
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Scholarships and grants
Scholarships
Scholarships are typically awarded based on merit, but there are also scholarships available for students who can demonstrate financial need. Merit-based scholarships usually focus on grades, extracurricular activities, and skills. However, there are many other types of scholarships available, such as those for students from specific ethnic backgrounds, gender minorities, students with parents or grandparents who served in the military, and even scholarships for students of a certain height! There are also scholarships for students in certain states, or in a particular year of college, or even for students pursuing specific fields of study.
Grants
Grants are usually awarded based on financial need. The first step to determining eligibility for need-based grants is to fill out the Free Application for Federal Student Aid (FAFSA). This application is free and helps schools determine if you qualify for need-based grants. If you are a military service member or veteran, or from a military family, you may qualify for certain aid packages. Each military branch offers tuition assistance for active service members, and the Department of Veteran Affairs offers grants to veterans and their families.
Tips for Applying for Scholarships and Grants
The most important thing to remember when applying for scholarships and grants is to apply early and often. Competition for these awards can be fierce, but there are also thousands of dollars that go unclaimed each year. To maximise your chances of success, gather letters of recommendation, work on achieving high academic results, contribute to community service, and work on your application essays.
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Work-study programs
A recent report revealed that college students might withdraw due to high tuition fees and other expenses. The report also showed that two-thirds of students are fully funding their education, with 67% of college students paying their way through college without help.
To be eligible for the Federal Work-Study Program, students must:
- Be a U.S. citizen, permanent resident alien, or another eligible classification of non-citizen
- Be in good academic standing at college and maintain satisfactory progress according to federal guidelines
- Demonstrate financial need
Work-study earnings are based on the number of hours worked and are paid directly to the student. These earnings are typically used for day-to-day expenses such as food, transportation, and school supplies. However, some schools allow students to apply their work-study funds directly to their tuition, fees, or housing. It is important to note that work-study funds are not guaranteed each year and jobs are limited, so students should act quickly if they are interested in participating in the program.
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Tuition waivers
According to a Cengage survey of 1,200 students, 67% of college students are fully paying for their education. Two-thirds of students are shouldering education expenses completely on their own and are struggling to do so. Tuition fees are the biggest burden, with 46% of students saying it is a struggle for them or their family members to pay for their education.
- Out-of-state tuition waivers: Some colleges and universities offer out-of-state tuition waivers to students who reside in a bordering state or county. For example, Southern University provides waivers to students with a high school GPA of 2.75 or higher.
- Diversity waivers: Some institutions promote cultural diversity by awarding tuition waivers to minority students or members of the LGBTQ+ community. North Dakota State University, for instance, provides cultural diversity tuition waivers, with preference given to students with a high level of financial need.
- Need-based waivers: Students who demonstrate financial need may qualify for a tuition waiver. This includes students who grew up in low-income households or experienced an unexpected job loss or the death of a financial provider. California's Over 60 Program, for instance, provides free tuition to residents aged 60 and older.
- Military waivers: Many colleges and universities offer tuition waivers to military members and veterans. Each military branch provides tuition assistance for active-service members, and the Department of Veteran Affairs offers grants to veterans and their families.
- Employment-based waivers: Some colleges and universities offer tuition waivers or discounts to their employees and, in some cases, their children. Additionally, AmeriCorps and Peace Corps participants may be eligible for tuition waivers at certain institutions.
- Waivers for non-traditional students: Tuition waivers are often available for non-traditional students, such as senior citizens or adults returning to school. For example, Louisiana residents over 60 who attend Delgado Community College are eligible for tuition waivers for up to three credit hours each semester.
- Waivers for specific populations: Some colleges and universities offer tuition waivers to specific populations, such as adopted students, students who grew up in the foster care system, or students with experience in the juvenile justice system. Additionally, descendants of victims of the September 11, 2001, attacks qualify for in-state free tuition at public schools in Massachusetts and Connecticut.
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Frequently asked questions
According to a Cengage survey, 67% of college students are fully paying for their education. Another survey by College Ave Student Loans found that 45% of students paid for their education with their own savings and income.
Students who pay for their tuition without help may work part-time or full-time, take out student loans, or receive scholarships and grants. Some states and colleges also offer tuition waivers or discounts.
College students may pay their own tuition without help because they want to reduce their financial burden on their parents or guardians. Additionally, some students may not have the option to receive financial support from their families.
