Common Financial Mistakes Community College Students Make and How to Avoid Them
Many students choose community college over a traditional four-year university because it is the more affordable option. With each passing year, however, college tuition costs are rising across the board. Attending community college may still be the more affordable option, but it is by no means cheap.
If you are thinking about attending community college, take the time to do some research to learn what kind of costs you can expect and how much financial aid you might quality for. You should also familiarize yourself with some of the most common financial aid mistakes that community college students make so you can avoid making them yourself.
How Much Does Community College Cost?
When you think about the costs for attending community college you have to consider more than just tuition. Most community colleges charge for tuition on a per-credit-hour basis, though that is not always the case. The average cost for one year of tuition and fees to attend a public 2-year college is around $3,500 for in-state students. For a public 4-year college for in-state students, the average yearly cost is closer to $9,500. In addition to the cost of tuition and fees, you also have to think about things like school books, housing, and various living expenses like food and transportation. Many community college students are able to minimize these costs by continuing to live at home.
Financial Aid Options for Community College
To help you cover the cost of community college, there are a number of different kinds of financial aid you might apply for. Grants and scholarships are generally financial rewards that you do not have to repay. There are some, however, on which you might have to pay taxes. Student loans are financial rewards that you do have to repay – some come with high interest rates while others do not. Another option is to work part-time during school through a work-study program. Most students utilize a combination of these financial aid options to finance their education. How much aid you qualify for will depend on a number of factors such as your residency, your income, your age, the program you choose to attend, and more.
Common Financial Mistakes of Community College Students
Even though community college is widely considered to be more affordable than most four-year universities, you should still make an effort to minimize your costs as much as possible. To avoid paying more for your education than you need to, avoid making these common financial aid mistakes:
1. Not filling out your FAFSA promptly. The Free Application for Federal Student Aid (FAFSA) becomes available on January 1st of each year. This is the form you must fill out if you want to apply for federal aid including grants and scholarships. Filling out this form doesn’t guarantee that you will receive aid, but unless you fill it out you won’t know whether or not you qualify. Surprisingly, the American Association of Community Colleges reports that only 62% of community college students ever fill out the form and many of them wait until a few weeks before classes start. If you put off filling out your FAFSA, you might miss out on scholarship opportunities.
2. Not applying for school-sponsored aid. Federal student loans account for a large percentage of the financial aid college students receive, but they are not the only option. Check your college’s website or talk to the admissions office to see what kind of scholarships the college itself has to offer. Many community colleges offer need-based scholarships as well as merit-based scholarships, some of which are general and others that are connected to a certain program. You’ll also need to apply to the school for financial aid if you want to get a work-study job.
3. Not looking for outside scholarships. In addition to checking with your school to see if they offer scholarships, you should also look for private scholarships offered by outside organizations. Many of these scholarships are fairly small (a few hundred dollars at most), but they could help to cover your cost for books or living expenses while you are in college.
4. Borrowing more than you need. While it might be tempting to take out extra loans to cover your living expenses, you might regret that decision later when you get your first bill to repay those loans. Consider whether you’ll be attending school part-time or full-time when deciding how much to take in loans and think about whether you might have time for a part-time job to finance your school books and living expenses. When your student loans come due, they may come with hefty interest fees that can compound quickly, racking up an astronomical amount of debt in a short period of time. If you can avoid taking out loans, do it!
5. Taking too many classes at once. Many college students assume that if they take more classes they’ll receive more financial aid. While many scholarships, grants, and loans have a requirement that students maintain full-time status, that doesn’t mean you have to overload your class schedule. If you take on more than you can handle, you might end up performing so poorly in one or more classes that you have to retake it and that can cost you money. Some loans, like Direct Loans, only require that you be enrolled half-time and Pell Grants can be adjusted according to your class load.
6. Waiting to repay loans. While certain types of student loans do not accrue interest while you are enrolled in school, some of them do. Make sure you know exactly what kind of loans you have and whether you can receive deferred interest while you are a student. If you do have loans that accrue interest, consider making payments toward that interest while you are in school. If you don’t, the interest will compound each month and drive up your principal balance. That can lead to higher monthly payments when it comes time to pay back the loan.
7. Relying too heavily on credit cards. Credit cards have become so common that many people don’t even bother to carry cash anymore. The problem with credit cards is that it removes you from the act of spending – you don’t feel like you’re actually paying for anything the same way you would if you paid with cash. Credit cards often come with extremely high interest rates and if you start to fall behind on payments, you could rack up thousands in debt over a period of just a few months. If you want to keep better track of your spending, set a budget for yourself and dole out that amount in cash – once the cash is gone, you are done spending for the month.
8. Ruining your credit score. While you are in college you don’t have to worry about things like paying for utilities or paying rent (unless you live off campus). But if you make poor financial decisions during college, you may end up graduating with an awful credit score and that will make it hard for you to get your own place and to open utility accounts after you graduate.
If your primary reason for attending community college is to save money, then you should take your financial aid very seriously. The more you plan ahead and the more research you do to learn about your options, the more money you can receive to finance your education. Be smart about borrowing money and talk to your advisor to determine what your costs are likely to be and how you can best meet those costs with financial aid options.