College financial aid options and 8 money-saving tips

By Brian Fairbanks

At a glance

• Loans refer to money that is borrowed and has to be repaid with interest, while grants and scholarships do not have to be paid back. Find your right fit.
• There are various federal loans offered to students and they may vary by school, location, financial needs and other factors.
• Online college is often cheaper than its traditional counterpart.
• University of Phoenix offers fixed tuition, scholarships and other ways to help you save. Read on to learn more.

Finding the right financial aid

When it comes to paying for higher education, you are not alone. There are a number of options to help make college more affordable. Financial aid — from scholarships to grants to loans — comes in many forms and can be applied in many different situations.

Before going back to school, however, Krystal Christopher at University of Phoenix encourages people to look at all resources available by the school, including Pell Grants, scholarships, tuition reimbursement and/or any military or Tribal benefits. From there, she suggests saving up enough cash to pay upfront for two classes. Therefore, if there are any hang ups, the student can reach back into those funds to continue moving forward.

"Most students have no idea some of the benefits that schools offer to assist with helping with time management and other pivotal situations that a student may go through while in school," she adds.

Below, we’ll explore several options (including federal student aid) for financial assistance to pursue higher education. Read on for more information and tips regarding the kinds of grants, loans and scholarships currently available.

What is federal financial aid and who qualifies for it?

Federal student aid is one of the biggest opportunities for financial aid. This is money provided by the U.S. Department of Education to assist college and university students with tuition and expenses.

There are two types of federal financial aid for students: loans and grants. Loans refer to money that is borrowed in order to pursue an education. This money must be repaid, with interest, after completing/leaving school.

Unlike loans, grants are generally considered gifts. They don’t, in other words, have to be repaid. When looking for financial aid options, it is best to understand the right fit for your circumstances.

To learn more about your options, visit the Department of Education's Student Aid website. There you will find available federal financial aid options, which include grants, loans and work-study programs. You’ll also be able to learn more about the differences between these two major types of financing options, as well as what you can apply for.

Most common federal grants

• Pell Grants, which are geared toward undergraduates with "financial need" and who have not yet achieved a bachelor’s degree (or higher). The amount of Pell grant a student may be eligible for varies depending on their financial need, cost of attendance at their selected institution, and other eligibility criteria.
• A Federal Supplemental Education Opportunity Grant, which is awarded to undergraduate students pursing their first bachelor’s degree with exceptional financial need.

Three loans offered through the Federal Direct Loan Program

Federal student loans help an eligible student cover the cost of higher education.

• Direct Subsidized Loan, which are for certain undergraduate students who demonstrate financial need. Interest for these loans do not accrue while in school at least half time
• Direct Unsubsidized Loans are similar to Direct Subsidized Loans but with a caveat: Financial need does not factor into this loan. Interest for these loans accrues beginning on the date the loan is disbursed.
• Direct Plus Loans, are specifically for graduate students or parents of undergraduate students looking for help in covering their child’s education expenses. Unlike Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans require a review of the applicant’s credit history. Adverse credit history will require an applicant to appeal the credit decision or obtain an endorser.

If you receive a Direct loan through federal financial aid, be aware that you will likely need to complete two steps online before your loan disburses. These are known as Master Promissory Notes (MPN) and Entrance Counseling forms.

How do I apply for federal financial aid?

The first step toward securing any type of federal student aid, however, is the FAFSA^®. This form, which also known as the Free Application for Federal Student Aid, must be completed to apply for financial aid.

For most programs, students must demonstrate financial need. There are exceptions, of course (see above about unsubsidized and PLUS loans), but these are the main eligibility requirements.

You must be:

• A U.S. citizen or eligible noncitizen.
• Registered with the Selective Service Administration, if required by law.
• Enrolled as a regular student in a qualifying degree or certificate program. And for Direct Loans, enrollment must be at least half-time.
• You must not be in default on a prior student loan or owe an overpayment on any federal financial aid grant or loan program funds.
• Students must also have a Social Security Number and maintain satisfactory academic progress in college.
• You must have a high school diploma or GED certificate, or pass a test approved by the U.S. Department of Education, or have completed a high school education in a home school setting approved under state law.

Want to learn more? The eligibility criteria can be read in full here.

Where can I find more resources?

The U.S. Department of Education’s Federal Student Aid website is your best resource for help in paying for college. It offers an array of information on federal financial aid options, FAFSA® deadlines and information on the financial aid process.

Of course, the FAFSA® form is just a springboard or starting point. The federal government encourages students to explore several paths for paying for college, including both federal and other types of financial aid. Check out its other recommended aid options and resources here.

What other financial aid options are out there?

While you may decide to apply for financial aid with the FAFSA^®, you may also want to explore other tuition payment plans including the following:

• Scholarships

Similar to financial aid grant options, scholarships can help reduce the overall cost of tuition and generally do not have to be repaid. Applying for scholarships often depends on availability and deadlines.

Scholarships can be awarded through many different sources including universities, employers, communities, professional organizations and a host of other providers. They are often merit-based but can also be awarded based on a variety of criteria including academic achievement, financial need or socioeconomic background.

University of Phoenix offers several different institutional scholarships and provides access to resources through iGrad to search for additional scholarship opportunities offered through outside organizations. You can search for available scholarships on the U.S. Department of Labor’s website or contact a University financial aid officer.

• Private Student Loans

Getting your loans from a private company is another option (or an additional one, if you still need assistance after receiving federal financial aid). But be careful accepting loans from an entity other than the federal government — you’ll want to make sure you are protected from high interest rates, predatory lenders and suspicious sources. These loans are credit-based and may require a co-signer.

University of Phoenix strongly recommends exhausting all of your state and federal financial aid opportunities before trying the private sector. Note, too, that private financial aid programs are not subsidized or protected by the federal government. So, if you accept this type of loan, you do so at your own risk.

How to pay for college with no financial aid

Though it may seem daunting, paying for college is doable even if you don’t qualify for financial aid. Luckily, there are numerous resources and strategies to not only secure help paying for college, but saving money, as well, either during or prior to attending.

Financial planning for students

As Christopher notes, you may not be able to get financial aid if you already "have student loans that are in default." Also, if your loans have reached their aggregated limit or if your eligibility may be limited.

“Someone may not want to use financial aid," she adds, "if they are receiving money from an outside source," such as a trust fund, or have military benefits.

Unfortunately, many people do not qualify either for scholarships or enough financial aid to get their education covered. This includes the most expensive part: the tuition. The good news is that there are great options out there at most universities, including work-study programs, that may be able to help you continue to earn money while working.

8 money-saving areas for college students

While you may incur debt as a college student. One way to make sure you tamp this down is to budget everything out for the month in advance and pay for as much as you can with cash. Here are a few money-saving areas to consider.

1. Internet expenses

A major expense you can save money on is internet access. If you use your phone, iPad or laptop a lot, especially if you plan to use a mobile device for research, studying, homework, etc., you should consider a Wi-Fi usage monitoring app. These apps analyze usage to find the most affordable plan and alert you if you exceed your monthly data limit.

2. Groceries

Cooking at home instead of eating out can save money in the long run. Buying in bulk can save money over the two to four years of your program. When you go to the grocery store look over the receipt and remove items you won’t see each week from your weekly food budget. Multiply the new sum by about four (as there are typically four weeks in a month) and you have your average monthly grocery store expenses. With this in hand, plan to set aside that amount in your budget.

3. Textbooks

Two more ways that can save you a lot of money are to avoid paying full price for textbooks and, if you can manage it, not buying a car or buying one that requires monthly car payments. Buying used textbooks or securing loaners and either commuting through more affordable means, such as public transportation.

4. Car payments

You might also consider purchasing an older vehicle or borrowing a family car for those days you may need it. All of these are good ideas to consider to cut costs. One of the most viable aspects of online college classes is that they typically do not require paper textbooks and you won’t have to commute to in-person classes.

5. Credit card debt

Using a debit card or paying off a small credit card payment each month can also save you money, as paying off balances avoids interest charges. Credit card rewards programs can also help mitigate costs down the line, such as trading points for travel stays, credits for some travel costs, and other benefits depending on the issuing card.

6. Existing loans

Make sure you are always making minimum payments on any loans, including car loans and mortgages, as well as credit card statements, as late fees and other avoidable surcharges can add up quickly.

7. Lifestyle expenses

Just make sure you always spend only what you’ll earn each month (or better yet, less), as you’ll start to eat into your savings or budget if you go over. As College Ave. notes, cooking and/or eating at home, find someone to share costs like streaming subscriptions, gas, housing and other bills can be a great way to chop your expense in half.

8. Unexpected costs

Also, you’ll want to make sure you cushion each month’s budget for surprise expenses; put "surprise costs" as a budget line and place up to a few hundred dollars there, if you can afford it. Then do what you can to not spend that money unless there’s a true unexpected need, emergency bill or expense. If you don’t spend it, put it toward your next month’s emergency allowance or pay down debt.

How online college can help save money

Another way to save money is in the choice of college itself. Online college classes are often cheaper than their traditional counterparts, and many online universities offer one-at-a-time class schedules to give you more free time to continue working and earning money to pay for your education.

You may also be able to apply college transfer credits or work or life experience toward a new bachelor’s degree (or another program), such as one from the online school University of Phoenix.

If you have them, transferring existing credits that qualify will save you in the long run, as you may have to take fewer courses to earn your degree. Alumni may also be able to return to school at a savings.

Ways to save at University of Phoenix

The average cost of tuition has risen 2.6% every year, so finding the right financial aid options can help you save on your education. University of Phoenix is dedicated to making tuition simple with no surprises and provide opportunities to earn a degree for less. Here are a few ways we can help you save:

• Fixed tuition. At University of Phoenix, you’ll pay one flat rate from enrollment to graduation. Per credit costs start at $398 for undergrad, $698 for masters and $810 for doctoral.
• Scholarships. Each month, we offer up to $1 million in scholarships. Visit https://www.phoenix.edu/tuition-financial-aid/scholarships.html to learn more.
• Transfer credits. We evaluate credit for college education as well as life and work experience. Bachelor’s students saved $11k and 1 year off their undergraduate degree on average.
• Employer assistance. We work with a number of companies that offer employer-sponsored tuition assistance and reimbursement programs.
• Military benefits. Military experience may count toward college credit and we offer GI Bill^® and VA benefits.
• Alternative credits. We have teamed up with alternative credit providers to allow students to take classes online and transfer eligible credits toward a degree.
• Alumni tuition rates. Alumni can receive a total savings of up to $2,880 on a bachelor’s degree and $2,200 on a master’s.

Whether you pursue federal financial aid, scholarships, or grants, paying for college is possible when you do your research and plan ahead. For more money saving tips, visit phoenix.edu.