College is expensive. According to the College Board’s 2016 Trends in College Pricing report, the average full-time student at a four year nonprofit private university will pay $35,020 a year in tuition and fees. Add in room and board and the price balloons to nearly $45,370! Over 4 years, that’s over $180,000 in tuition, fees, room and board and that’s if your child graduates on time. If you’re one of the many parents with children heading off to college soon, it’s time to start thinking about how you’ll pay for this major investment. Here are four little known tips to help pay for college tuition.
Apply for Obscure Scholarships
There are thousands of obscure scholarships most college bound students have never heard of before. Everyone knows there are are scholarships for academic ability and athletic ability, but there are those for artistic ability too. There are scholarships for those families who have joined certain organizations and employers who offer scholarships to their employees’ children.
The more obscure the scholarship, the better your chances of winning because there are fewer entrants. How many people do you think enter or even know about the Chick and Sophie Major Memorial Duck Calling Contest each year? Probably not many, but the winner takes $2,000 home!
The American Association of Candy Technologists offers a John Kitt Memorial Scholarship that pays out $5,000 over two installments for college students with a demonstrated interest in confectionery technology. There are thousands of these types of scholarships paying out millions of dollars!
Remember the FAFSA
The Free Application for Federal Student Aid (FAFSA) is the key financial aid form you need to fill out to be eligible for financial aid. The form is used to determine Expected Family Contribution, which determines your need-based financial aid. Without this form, universities will often not extend any financial aid.
In addition to need-based financial aid, many scholarships and other contests will require you to fill out a FAFSA as well. Even if you feel like the FAFSA won’t result in any need based aid, you might be surprised and you won’t know until you fill it out.
Tap a Home Equity Line of Credit
If you own your home and have built up some equity, you can turn to a home equity line of credit as a means of accessing funds to help pay for college. A home equity line of credit (HELOC), sometimes called a second mortgage, is a line of credit secured by your home.
The rates on a HELOC are generally quite favorable, but the rate will vary depending on when you take out the loan. One additional benefit is that the interest is tax deductible. The only limitation is that since you’ll be using the money for college, and not on your home, you can only deduct the interest on amounts up to $100,000. This is only possible if you have built up some equity in your house, which will be confirmed by an appraisal, since the loan would be against that equity.
Consider Lending Sites
If a private loan’s interest rates have you scrambling for another option, lending sites like Prosper, SoFi and Lending Club may offer a better option. They offer loan amounts for as little a thousand dollars and fairly reasonable fixed interest rates. When you apply for a loan, your loan is given a grade based on a variety of factors, including your credit.
These are just four common ways to help pay for college. If you find yourself short, these might just help you get over the top.
Don’t worry about knowing tax rules. TurboTax will ask you simple questions about you and give you the tax deductions and credits you deserve based on your entries.