Need Help On That College Tuition?
You have a big decision to make. You can either go to college and get your degree, or you can put that dream on hold and just work a normal job. The key question is which will pay off in the future?
College graduates on average earn around $900,000 more than high school graduates over their careers. That’s not all though; those who are able to get through college contribute $250 billion more in taxes than those who only have a high school diploma each year.
According to a study by the Federal Reserve, for every dollar people with a college degree earn, those who went to high school but have no credential earn 58 cents. And when you factor in the rising cost of tuition these days, it can actually cause people to be stuck in an endless cycle of debt that they could never find their way out of.
That’s why getting government help on your tuition is so important; that’s what this article is all about. There are actually a few different ways you can get financial help on your college tuition: grants, scholarships, and student loans are just some examples.
Grants
We’re going to start off with the most important type of help on your college tuition, grants. A grant is essentially free money that you don’t have to pay back. The total amount of grants offered each year is actually over $150 billion. You can find the two most common types of grants online, here on government websites and here on colleges themselves.
Scholarships
While a lot of people don’t realize it, scholarships are a much better kind of financial aid than student loans. To explain why, we need to go into some detail about how student loans work.
Student loans are taken out to pay for your tuition, but they work a little differently than what you may think. In short, student loans will get paid back with interest over the course of 10-20 years depending on how much debt you take on. You see, student loans are saddled with an interst rate that starts at 4% and can go up to a cap of 8.25%. Even if you don’t end up paying off the entire loan, you need to pay at least some of it off or else face penalty fees for defaulting on your credit and not paying your loans.
Because of this, you need to look at the percentage of your total education costs that you’re going to have to pay not just for tuition but for the cost of food, housing, transportation, and more. When looking at scholarships, it’s possible that out of every $5 you spend on tuition only $1 will go towards your actual education costs. That means $4 of every $5 is going towards interest and even more is going to cover things like taxes. That means a scholarship is actually paying off your entire tuition in around 5 years because that kind of interest rate would just be terrible.
Scholarships are out there because they lower interest rates and make it so that your education can actually be paid off within a year or two. So if you’re wise you’ll go for one of these scholarships instead because student loans will never be able to pay off your life-long dream.
Student Loans Vs. Grants Vs. Scholarships
This is going to come down to your personal choice and what type of expenses you have financed in your life already so we’re not going to compare them side by side (although we’re sure the people who read this blog will eventually go out of their way to do so). There’s one thing you should keep in mind though: if you can avoid taking on a single dime of debt and still graduate from college that’s what you want to do. Don’t make the mistake of thinking that student loans are a better option than grants or scholarships just because they can technically be paid off.
Student Loans
Student loans are taken out to pay for your tuition costs. Unfortunately though, it’s not all as simple as it seems because taking out student loans will saddle you with interest rates as high as 8.25% (that doesn’t include the hidden fees and penalties). In reality, you’re going to be paying off student loans for the rest of your life.
So if that’s not a bad idea in itself, think about it from an economic standpoint. A study by the Federal Reserve shows that those who were able to get through college were able to contribute $250 billion more in taxes (in 2015) than those who only went through high school. Even when your education is paid for and you don’t have any debt-related expenses it makes sense for you to go for something that is going to help out with tax revenue even more than grants do because of the interest rates that come with federal financial aid programs such as Stafford loans.
Grants Vs. Scholarships
Grants are free money. High school graduates on average earn around $900,000 more than college graduates over their careers. And when you factor in the rising cost of tuition these days, it can actually cause people to be stuck in an endless cycle of debt that they could never find their way out of. That’s why getting government help on your tuition is so important; that’s what this article is all about. There are actually a few different ways you can get financial help on your college tuition: grants, scholarships, and student loans are just some examples.
Scholarships vs. Loans vs. Grants
Grants are free money. High school graduates on average earn around $900,000 more than college graduates over their careers. And when you factor in the rising cost of tuition these days, it can actually cause people to be stuck in an endless cycle of debt that they could never find their way out of. That’s why getting government help on your tuition is so important; that’s what this article is all about. There are actually a few different ways you can get financial help on your college tuition: grants, scholarships, and student loans are just some examples.
Scholarships vs. Loans vs. Grants
Grants are free money. High school graduates on average earn around $900,000 more than college graduates over their careers. And when you factor in the rising cost of tuition these days, it can actually cause people to be stuck in an endless cycle of debt that they could never find their way out of. That’s why getting government help on your tuition is so important; that’s what this article is all about. There are actually a few different ways you can get financial help on your college tuition: grants, scholarships, and student loans are just some examples.
Grants vs. Loans vs. Scholarships
Grants are free money. High school graduates on average earn around $900,000 more than college graduates over their careers.
Conclusion
If there’s one thing you should understand it’s that taking out student loans to pay for your tuition is like signing away the next two decades of your life. You will spend more money in interest than you will on actual college costs and even then you could still face penalties and fees for not paying off the entirety of your loan. If you have the chance to go for a grant or a scholarship, don’t pass it up because your education puts more money into taxes than ever and no amount of interest rate is even going to be able to match that. So once again, if you can avoid taking on a single dime of debt and still graduate from college that’s what you want to do.