Paying for college tuition can be a daunting task: for the 2019-2020 school academic year, the average cost of attendance for private colleges and public colleges is $53,980 and $26,590 respectively.1 Among those who borrow, the average debt at graduation is $25,921.2 Luckily, there are some unique ways to fund college that can help you avoid the same fate.
These strategies may take some time and effort, but may be well worth it in the long run. The four funding options explored in this article include: applying for scholarships and grants, student research positions, income-share agreements (ISA), and public service loan forgiveness. Each of these options are effective given the current circumstances and can often be used in tandem as to possibly avoid student loan debt all together.
Scholarships and Government Grants
Scholarships and grants are great because they are both funding options offered by private and government institutions that do not need to be paid back. Scholarships are typically merit based or awarded based on the basis of belonging to a certain class of citizens, while grants are typically awarded based on your financial need. Some examples of qualifications for scholarships include: winning certain competitions, scoring high on a standardized test, showing exceptional talent in a skill that is difficult to master, athletic-based, or other individual achievements based on a wide range of criteria.
When selecting which scholarship to apply for, it’s important to remember that there is no amount too small to have an impact on your goal to graduate debt-free. Often, the best resource is an online scholarship search tool to help you identify what scholarships you may qualify for. Following is a short list of websites to reference when conducting your search:3
- https://myscholly.com/
- https://bigfuture.collegeboard.org/scholarship-search
- https://www.fastweb.com/
- https://www.scholarships.com/
- https://www.cappex.com/
- https://www.chegg.com/scholarships
- https://www.niche.com/colleges/scholarships/
- https://www.petersons.com/scholarship-search.aspx
- https://www.careeronestop.org/toolkit/training/find-scholarships.aspx
- https://comparite.ch/scholarship-scams
The other options that may be available to you is also widely considered “free money” if you qualify for it – a federal or state grant. You can learn about the grants that are available in your state by contacting its higher education authority via the Department of Education.4 In Indiana, for example, there are grants available for undergraduates with financial need, adults returning to school, and for attending trade schools.
Student Research Positions / Jobs on Campus
Student research positions or getting a job on campus in your department, such as a student assistant or graduate assistant, can also be great options for you to help fund your college education. These are unique not only because they offer you the possibility to cover some of your college expenses, they also provide real-world experience that can help you to land a job upon graduation. In order to secure one of these positions you should reach out to your advisor or a department head as soon as possible to inquire about opportunities, as these positions are typically interviewed for or filled the semester prior.
Also, organizations outside of your school such as hospitals, research institutions, and community-based organizations often look for students to fill research positions that are backed by grants. If you would like to pursue this funding option during your first semester, you need to be extremely proactive. A great way to help make this happen is to bring this option to someone you want to intern with or work for. They will likely be impressed by the innovation - and it shows them you just paid for your own job.
Another important note is once you arrive on campus, keep your eyes peeled for emails from the college or university because these positions can become available at any point and are typically filled pretty fast.
Income-share Agreement
An income-share agreement (ISA) is a funding option that’s not as well-known as the prior two as it is of the more recent trends when it comes to paying for college. An ISA is a contract offered by certain colleges and universities5 in which you receive money for your education from an investor or pool of investors. In return, you promise to pay the ISA provider a fixed percentage of your income for a set amount of time after you finish school.6
An ISA comes with its own set of advantages and disadvantages. The key advantage is there’s zero interest and zero balance. The key disadvantage is if you get a higher paying job upon graduation you could end up paying more for the ISA than federal or individual loans. The effectiveness of an ISA depends entirely on your individual situation and the terms of your agreement.
For example, if you sign an ISA for 10 years and 10% of your income. If you graduate and earn $60,000 a year, you’ll repay your investor $60,000. If you compare that to a situation where you might have only borrowed $40,000 in education loans. Even with 5% interest, repaying $40,000 over that same 10 years results in a total repayment of $51,802. It’s important to do the math before signing an ISA, so research your options - there are plenty of resources available online.7
Public Service Loan Forgiveness
Finally, if you are considering a career in government, non-profit, or other certain public service jobs, you may qualify for the public service loan forgiveness program. This program was created under the College Cost Reduction and Access Act of 2007 and allows borrowers who work full time for non-profits and government agencies to have their outstanding debt forgiven tax-free on Federal Direct Loans, after making 120 qualifying monthly payments under a qualifying repayment plan.8 This program’s requirements are very stringent, but are worth looking into and abiding by if you are already interested in these occupations. Employment that qualifies you for the program include:
- Employment with a government agency (federal, state, local or tribal)
- Employment with a charitable non-profit tax-exempt under 501(c)(3)
- Full time AmeriCorps or Peach Corps members
- Full-time teachers in low-income elementary/secondary schools*
This program was designed to attract more talent to positions in the public service sector and encourage them to remain in that sector. For more information on this program please direct all of your questions to the government websites.9
Hopefully, this article has provided some awareness of different options to assist you in funding your college education. Remember, these strategies are not mutually exclusive and can often work in tandem together. There are more options out there, so by all means do the research for alternatives to fit your unique situation.
*A certain set of criteria applies: 5 consecutive years of employment and only eligible for $17,500.
- https://www.collegedata.com/en/pay-your-way/college-sticker-shock/how-much-does-college-cost/whats-the-price-tag-for-a-college-education/#:~:text=In%202019%2D2020%2C%20the%20average,out%2Dof%2Dstate%20residents)
- https://www.aplu.org/projects-and-initiatives/college-costs-tuition-and-financial-aid/publicuvalues/student-debt.html#:~:text=Among%20those%20who%20borrow%2C%20the,debt%20at%20graduation%20is%20%2416%2C300.
- https://studentloanhero.com/featured/scholarship-search-tools-free-money/
- https://www2.ed.gov/about/contacts/state/index.html
- https://studentloanhero.com/featured/schools-bachelors-income-share-agreements/
- https://www.nerdwallet.com/article/loans/student-loans/income-share-agreements-what-students-should-know-before-borrowing
- https://leif.org/students
- https://www.councilofnonprofits.org/tools-resources/public-service-loan-forgiveness#:~:text=Full%20time%20employees%20of%20nonprofit,making%20payments%20for%20ten%20years.
- https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service