Embarking on a journey of higher education can be exciting, confusing and stressful all at the same time. To help with the financial aspect of education, current and prospective community college students are in a unique position to choose from various forms of student aid available. As you navigate your way through the myriad of financing options out there, let this overview help you in making the right decisions about financing your education.
While the average college tuition rates are rising fast across the country, you may be pleased to learn that the average cost of tuition at a community college is just under $2,300 per year (American Association of Community Colleges 2007). Although this cost is relatively low when compared to 4-year institutions, many students still find themselves looking for ways to finance their community college education. Unfortunately, it is also a fact that most parents are either unwilling or unable, for various financial or personal reasons, to finance all of the costs of sending their child to a community college.
You may be surprised to learn that there are over 1,200 community colleges across the country. In fact, 11.6 million students, just under half of all U.S. undergraduates, attend community colleges. Of those students, 47% receive some sort of financial aid (American Association of Community Colleges 2007).
The federal government alone provided more than $78 billion in various types of aid to college students last year (U.S. Department of Education, 2007). Although there is some indication that financial aid increases steadily year after year, it is unfortunate that tuition costs increase at an even faster rate (Specht 2006).
Financial aid comes in various forms:
- Loans - Education loans are given to students or their parents, usually based on demonstrated financial need. Loans may be administered by the government or by the individual colleges.
- Grants - Need-based educational grants are given to those students who demonstrate exceptional financial need. The Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant are two common examples.
- Scholarships - Educational scholarships are usually given based on some merit, such as excellent grades or some outstanding talent. Scholarships and grants do not have to be repaid.
- Work-study programs - Such programs are usually subsidized by the federal government, and place students in various on-campus and off-campus jobs.
Many community colleges offer on-campus and off-campus jobs to students in order to help them with college expenses. Although the specific job you are offered may or may not directly relate to your chosen major, it is sure to provide you with valuable work experience and added financial flexibility (Financial Aid: you can afford it, 2004). The key to getting the most well-balanced financial aid package is to apply to various sources of aid, and to combine them in a way that is best for you. Financial aid can be broken down into two major categories: need-based and non need-based. To qualify for need-based aid, your family must demonstrate that they do not have enough money to pay for your college education. Depending on the aid program that you qualify for, need-based aid may cover all or part of the student's tuition, books, and other expenses.
Non need-based aid, on the other hand, uses certain merit-based criteria to qualify students. A very competitive environment surrounds merit-based aid, which also comes in various amounts depending on the student's qualifications (Financial Aid: you can afford it, 2004). If a student's family is able to demonstrate the necessity for need-based aid, the student should not rule out merit-based aid as well. A special talent or ability can mean hundreds or even thousands of dollars towards your community college education.
Student financial aid can be broken down into four major sources:
- Private - These include various community and religious groups. You can find out more about these sources by approaching them directly or by checking in the reference section of your local library.
- Institutional - This type of aid is provided by the colleges themselves, and varies from college to college. The financial aid office at your community college will be able to provide you with detailed information and have all necessary applications.
- State - Each state has a dedicated agency that is responsible for awarding aid. Different types of state aid may vary in their attendance and residency restrictions. They may also be based on demonstrated financial need or academic achievement.
- Federal - Federal aid can be both need-based and merit-based. The U.S. Department of Education provides funds to colleges, who in turn give federal aid to students based on established guidelines (Financial Aid: you can afford it, 2004).
Prospective community college students are eligible for various loans, some of which are subsidized and guaranteed by the government. While taking out a loan certainly adds on to the debt you will graduate with, it can be an effective way of being able to afford a college education. Be sure to read the following article that goes into detail on the types of loans that are available.
Grants and scholarships are, essentially, free money. They do not have to be repaid, and can be a great addition to your financial aid package. While grants are usually based on the student's financial need, scholarships are often based on some outstanding achievement. The following articles discuss these two types of aid further. As a general guideline, a student must remain enrolled in full-time or part-time coursework in order to continue receiving aid. A change in academic standing, transferring to another school, or withdrawing from classes can affect the amount of financial aid you receive. Be sure to check with your source of aid for any other conditions upon which your aid depends on.
To be sure that you are getting the best financial aid package you are eligible for, be sure to apply for financial aid every year. This includes completing the FAFSA form, the government's Free Application for Federal Student Aid. The information you provide in the FAFSA is used to calculate each student's Expected Family Contribution (EFC) score. This score in turn determines the amount of money the student and his or her family are able to contribute to higher education. It is very important to provide very accurate financial information on the FAFSA, since any qualification for aid will have to be supported by proof of financial eligibility. Although both a paper version and an online version of the FAFSA are available, the online version will provide better accuracy and a faster turnaround time.
As you embark on completing the FAFSA and other forms, be sure to keep a close eye on all applicable deadlines. The window for completing and turning in the FAFSA form is only from January 1st to March 1st (Kantrowitz, 2007 - 2). There should be no good excuse for not completing the aid forms on time, especially since your education could depend on the amount of aid you receive.
One other note on the benefits of community college financing: your higher education expenses are tax-deductible. In fact, you can deduct as much as $2,500 per year. Whether you are paying for some of your college costs out-of-pocket, or are repaying back on your federal or private student loan, all of these expenses have an impact on your bottom line at tax time. Be sure to check with your tax professional for more information on ways of maximizing your tax return.
Your community college experience is sure to be an exciting one, filled with learning both inside and outside the classroom. It is crucial to plan ahead in order to be able to pay for all your college expenses every quarter or semester. While it is certainly best to borrow as little as possible and to have very little debt once you graduate, your complete financial package may consist of various types of financial aid. The key is to determine as early as possible exactly the type of aid that you qualify for.
American Association of Community Colleges. (2007). Community College Fact Sheet. Retrieved May 2, 2007 from www.aacc.nche.edu/Content/NavigationMenu/ AboutCommunityColleges/Fast_Facts
Financial Aid: you can afford it. (2004). What Financial Aid is Available? Retrieved May 1, 2007, from www.nasfaa.org/SubHomes/DoItAffordIt.
Kantrowitz, Mark. (2007 - 2). Student Loans. Retrieved May 1, 2007 from www.finaid.org/loans
Specht, M. (2006, August 30). Financial aid can't keep pace. Retrieved May 3, 2007 from www.usatoday.com/news/education/2006-08-30-financial-aid
U.S. Department of Education. (2007). Financial Aid. Retrieved May 3, 2007 from www.ed.gov/finaid