Whether you're a parent, another family member, a mentor, or a family friend, you may be concerned about a college student you know who is struggling financially. On the other hand, you could know someone who hopes to attend college but doesn't know whether they can afford it. College tuition isn't cheap, and when you add in the general cost of living just to get by, it can look like an impossible hurdle. However, there are several ways that you can help.
Investigating Financial Help
There's plenty of help for students, but it can be hard to find. Essentially, the types of aid available are both government and private loans, scholarships, and grants as well as additional aid programs, such as work-study. Unfortunately, there isn't really a single clearing house for getting all the information on all these opportunities, and this is where you can step in and make a big difference by helping them sort through all these options.
A first step should be filling out the FAFSA, which is the form they need to get federal financial aid, but there is more out there as well. States may offer loans too. There are many scholarships, some of which are given by schools themselves and others by small private organizations or other entities.
Some of these may have very specific criteria that mean they have only a few applicants. You can help the student research scholarships and plan for applying for them that doesn't leave them too overwhelmed with writing essays and filling out paperwork. Like scholarships, grants have the advantage of not needing to be repaid. Private loans are another way to cover some of these costs, but there are a few complexities involved, as discussed below.
Private Loans and Cosigning
Federal loans offer plenty advantages and protections, but there are drawbacks as well. Some are need-based, and there may be caps on how much can be borrowed. This is where private loans can come in handy. There are several lenders online who offer them, and you can also check with your local bank or credit union. However, there's an issue that many students may face when going the private route, and that is a lack of credit history.
This means that they may be turned down or they might only be offered an option with a very high interest rate or an otherwise unfavorable repayment plan in some other way. This can all change with a cosigner, which is something you can do for them. It's also important that you fully understand student loan cosigner requirements, including that you will be responsible for repaying it if the student defaults. However, taking on this role can make a big difference in their ability to access higher education.
Financial Education
Another hurdle many students face is simply not understanding how to manage money. If this is your own child, teaching financial literacy is much easier; you can start when they are young and teach age-appropriate lessons throughout their childhood. However, even if you didn't do this or aren’t the parent and the person is already in their late teens, you can help them better understand financial management.
One of the most useful things you can do in this situation is teach them how to make a budget. If they haven't started school yet, you'll need to ballpark various expenses, but current students or the school itself may be able to offer some rough guidelines for what housing, food, and other costs of living will be. You can start with this information and then refine it. An app that tracks spending will help get a more accurate picture of actual spending.
However, even an estimated budget can give you a starting point for how much money will be needed. You can then help the student see how much they need to set aside for various expenses and what they can spend on things such as entertainment and meals out. The other priority here should be explaining credit cards and why they should be reserved for emergencies if the balance can't be paid off monthly. This can help prevent a situation where they graduate with a load of credit card debt on top of the loans that must be repaid.
Finding Work
Unless an employer is willing to cover tuition costs, it's not feasible for students to work their way through college any longer, but a part-time job can still be a great way to supplement other funding. It can also be a good launchpad into a career even if the job itself is not directly related to their field. A paid internship or a job in the industry they hope to work in is ideal, but any work experience is helpful. You can help with encouragement, interview tips, and discussions on workplace culture.