Mission Possible: Financing Higher Education, Part 2

The first time anybody brings up college, university, or getting degree there is one lingering question that a lot of folks have… how do I pay for all this? In today’s episode, we get into the many ways of financing your post-secondary education, as well as some methods that think outside the box. 

This is Part 2 of a 2-part series.

"Too Cool" Kevin MacLeod (incompetech.com)
 Licensed under Creative Commons: By Attribution 4.0 License
 http://creativecommons.org/licenses/by/4.0/

Sources:

https://www.usnews.com/education/best-colleges/paying-for-college/slideshows/tuition-free-colleges

https://www.usnews.com/education/articles/completing-the-css-profile-everything-you-need-to-know

https://www.irs.gov/pub/irs-pdf/p970.pdf

Live Better U: Walmart’s Education & Career Benefits

https://studentaid.gov/understand-aid/types/grants/pell

https://finaid.org/scholarships/

https://www.sofi.com/learn/content/how-to-pay-for-college-without-loans-or-financial-aid/

#PayingForCollege #FundingHigherEducation

Chapters

• 2:19 Scholarships
• 13:08 Grants
• 17:55 Out-of-Pocket
• 20:32 Loans
• 21:54 Recap

Transcript

SPEAKER_00: 0:10

Hello and welcome to the Thinking Ahead Podcast. My name is Ronaldo Stevens, and I'm your host on this journey to find out more and discover the truth about careers, college, and finance. In the last episode, I started discussing options for paying for college. Since 1978 around there, tuition has risen faster than inflation. And while on paper, the overall price of college hasn't shifted as fast as it used to, it is still hard for many families to catch up to what was already a rigged race to begin with. Thankfully, we have many more options now than my parents did in 78. So in the last episode, I started by mentioning the 529 plan, which is a savings plan that many states have to allow you to start saving for college ahead of time. I also mentioned the FAFSA, which is the free application for financial student aid or federal student aid. And we have the CSS profiles for private schools, which allows you to get scholarships from those schools' private funds and those private foundations. And I mentioned a few free college programs, including the West Point and other military academies, as well as some colleges that just have free tuition for students. And then I ended by talking about a few corporations or a few places where you can work and get tuition assistance so that you can make money to put into your pocket and also get free university or college classes. All in all, some really good options, but today I want to continue talking about how to pay for college, and I'm going to start with that good old elephant in the room, you know, the one that's right over there. Take a peek, yeah, over there in that corner. Yeah, yeah. And it is the one that people always look to when they first start to think about paying for college, and that is scholarships. Scholarships are the most stressed, most talked about, and most emphasized way of paying for college. But what is a scholarship? My high school English teacher would hate me for citing Wikipedia, but the definition on the site is pretty all-inclusive. A scholarship is a form of financial aid awarded to students for further education. Generally, scholarships are awarded based on a set of criteria such as academic merit, diversity and inclusion, which, for some reason, is controversial these days, athletic skill and financial need, research experience, or specific professional experience. In layman's terms, scholarships are free money for education based on whatever requirements and descriptions the person providing the money asks for. Because scholarships are such a well-known method for paying for university, there is a lot of misinformation about how to go about getting them. So let's start with the don'ts. Number one, don't apply for every single scholarship. The old quote-unquote wisdom used to be apply for every scholarship, whether you meet the requirements or not. The idea behind this was that the organizations need to get rid of the money anyway, so when they don't have enough people that meet the requirements, maybe they'll give it to others. This advice is a bunch of what my old coach would say, hoo-ha. Not only are you wasting your time by applying for these scholarships, but you're wasting the host organization's time as they sometimes reach out to make sure that a mistake wasn't made on your end. But now with the scholarship systems automated by computers and AI, if you don't meet the requirements, chances are they'll just kick your application out. Number two, don't use the same essay for every scholarship. You'll be able to get away with reusing essays every once in a while, but the important thing is that you need to refine your essays with each application round. If you are months into your search and you're not seeing success with your current essay, try again. Start over. This process is the same one that you'll have to do for cover letters during the job application process. Your essays should not only speak about you, but about your connection to the school or the topic that they ask you to write about. Mind you, the essay will probably read more like a narrative than an argumentative. And if you don't know the difference between those, go back to English class. Seriously. Number three, don't pay to apply for a scholarship. Why would people who are giving away money to poor families need to charge these families for applying for free money? That's not our scholarship, that's a pyramid scheme. 4. Don't do as much extracurricular work and activities as possible to quote unquote maximize appeal. This, like most advice, comes from a place of care and concern for the future. However, when the scholarship companies or the scholarship organizations see a huge list of a bunch of unrelated things, they don't see a diverse student. They see a confused student, someone who can't commit. And to a few scholarships and college applications even, this may be a plus, but it is a tiny, tiny percent. Do hobbies and activities because you like them, or because they're tied to the career or major that you want. Not just because it's there. Number five, don't use AI or artificial intelligence to write your essays or apply to scholarships. This is really a modern problem, and it is something that especially in the past couple of years has become a fixture in the minds of students. But even if you feel like you will be successful using Chat GPT to apply to a thousand scholarships, you won't be as successful as you think. The fact that scholarship committees use AI and computers to sort through the essays is not an excuse for you to use AI to write essays. It's not that it's cheating, though in my opinion, I think it is, it's actually for two other good reasons. One, AI is not perfect. When it makes mistakes, they are glaring and obvious to the human eye, and you will easily get kicked out of the running. Number two, it is not authentic. Most scholarships are looking for the human voice to appeal to them. The emotion behind the scholarship, the reason behind the scholarship, the person behind the application. If funds are limited, people will say, Who do I want to help the most? If you have a scholarship application that's blander than a McDonald's burger, which is what ChatGPT will mostly do, you probably won't win. Now, on to the do list. Do use a scholarship search engine to help you with the search. That's the first one. The engine won't do all of the work, but sites like scholarship.com, FastWeb, and Redkite can help you in the long run. There are also scholarship gurus you can hire, but I feel that that's mostly unnecessary to pay for someone to do the scholarship search for you when they'll be using a lot of the tools and search engines that are available to you for free. You are kind of paying for their knowledge, and some of these gurus do help you write your essays in a very special way, but if they're just doing the scholarship search for you, then it's not worth it. Number two, do find scholarships that appeal to your interests and hobbies. As I've said before, don't apply to every single scholarship you find. Look for scholarships that are tied to the person you are and the person you want to become. Not only will you most likely qualify for these scholarships, but you'll be able to write more authentic essays that show emotion and engage the reader, i.e. the scholarship judge. Number three. Do a daily consistent search. A mistake you can make in doing anything is by trying to cram hours of it into one day instead of spreading it out over time. Taking 15-20 minutes each day to work on finding scholarships is enough to properly find and apply to scholarships that you qualify for. I recommend keeping a scholarship search journal so that you can go over each action and record each daily action that you've done that shows progress in your search. You can also list and check off scholarships you've applied to or plan to apply to. Number four. Do let everybody know you're searching for scholarships, and I mean everyone. This seems like a minor tip or even a not important one, but it is. Many people, especially teenagers, no offense to you guys, don't like opening up about what they're doing or what's going on in their lives unprompted, meaning they wait for people to ask them what's going on and what they're doing. But all of the people you know, well, most of the people you know, want you to succeed. Gonna shake off the haters here. But friends and colleagues of parents and other family members may have information about a scholarship that you may otherwise have missed, and they will help you in finding a few. And tip number five, as I just added this in today, use AI as a search engine for your scholarship search. Now, as you can tell from earlier, I don't promote artificial engines for much, but source finding and list making is a great use of AI. It saves a lot of time. A simple prompt like Find 50 Scholarships for University for people who like science fiction can bring you results that you wouldn't get until the 37th page of your Google search. You can also ask it to list scholarships by application date or application deadline. You can ask it to list them by amount. There are many things that you can ask the AI engine to do that just saves you time in the long run. However, again, don't use it to apply to scholarships. Don't use it to write essays, use it to find sources and make lists. My last thought, and this is what I'm going to leave you on about scholarships, is really the only issue that I have with scholarships, is that people tend to over-emphasize it as a way to pay for college. Yes, it is the best way to pay for college because it is essentially free money, but applying for independent or school-based sports or other extracurricular activities scholarships is not the only way. Oftentimes, misguided parents or counselors will lean into the sports scholarship or lean into that extracurricular scholarship as the only way to pay for college. It's important to remember as we go through the rest of this list that all of these items work together to create a financial package. A several sourced income, because that's basically what it is, you're using several sources to finance your college goals. Whether that's tuition, housing, books, you're looking at things as a financial package. It all works together. Moving forward, I'd like to talk about grants. Now, the difference between grants and scholarships seems minor, but the biggest one is that grants usually have some more stipulations put upon them. And so we're gonna start by talking about the Pell Grant, which is probably the most well-known and the easily most easily accessed grant that you gain access to when you fill out the FAFSA. As stated on the student aid site, federal Pell Grants are usually awarded only to undergraduate students who display exceptional financial need and have not earned a bachelor's, graduate, or professional degree. Another benefit to this grant is that it is available to incarcerated individuals if they are enrolled in an approved prison education program. I kind of like that little point that they added on because it's nice to know that even if you've made a mistake before, that you're given an opportunity to improve yourself. And that's an important lesson for all of us, incarcerated or not. Another federal grant that is lesser known, or I haven't seen it discussed as much, is the Teacher Education Assistance for College and Higher Education Grant, or the Teach Grant. This program grants you money with the understanding that you'll teach for four years in a high needs field in a low-income area and get a high ranking or highly effective in your teaching score. That's right, teachers are graded now. When I was a student in college, I never would have considered spending four years teaching in order to help pay for college. But now, with hindsight, of course, knowing that the job market is fluctuating while conversely the need for teachers is rising, I would have probably taken this to help eliminate my student debt. Not to mention the steady paycheck and the summers off. Teaching is a perfect transitional job when you're coming out of college or any career field, because if you pay attention, you can learn a lot of the soft skills. How to lead a group of unlike people, how to talk to different personalities, how to plan ahead and think in terms of weeks, not just the day. Teaching is a weird job that is both highly respected and highly criticized, but as the old proverb says, can't judge a man until you walk in his shoes. Getting a teach grant will not only give you money to pay for college, but it may give you some additional wisdom after college. The other federal grant program that's worth mentioning is the Federal Supplemental Educational Opportunity Grant. I know it just rolls off the tongue, but they call it the FSEOG for short, and it's from Federal Student Aid. And this is basically a grant for undergraduate students, again, with exceptional financial need. The FSEOG program is administered directly by the financial aid office at each participating school, which means you have to apply for the FAFSA, then you have to apply to the school of your choice, and then they'll take a look at your needs and maybe give them out. Each school will probably have different cases for handing this out. In my case, we had pretty high financial need, and the school was able to add in that supplemental grant based on my needs, circumstances, and my background. Most grants out there are granted to universities based on their research, and then the school's departments of colleges can determine what that grant money is used for. Many schools are the many of the school's work programs, I should say, are based on grant funding from the federal government as well as private enterprise. The National Science Foundation and Google are two groups, are two organizations that provide grants to schools for them to research certain subjects. And in return, many times these corporations or organizations get to own the research that comes out from that grant. It's no coincidence that universities researched LED lights, and then within the first year after the discovery of blue LED lights, LED television started popping up everywhere. Coming towards the end of our financing higher education episode is the payout-of-pocket route. Possibly, and I would say it definitely is, in my opinion, the more difficult ways to pay for college if you're thinking of a traditional four-year education. However, if you are currently employed and can't cut back on hours due to obligations or circumstance, then paying out of pocket can be affordable as you take your classes piecemeal or bit by bit. I once had a friend that was working full time at night and then had a full college schedule in the day. I honestly don't know how he still managed to have a social life in between those hours and to be one of the most popular people around, but that's a testament to the kind of person he is, and the kind of person you would need to be to have a full-time work schedule and full-time college schedule. One of the best ways to prepare for paying for college out of pocket is to cut costs ahead of time. Dual enrollment, AP classes, IB, CLEP courses during high school can save you multiple credit hours, which could equal to several thousands of dollars saved. You should probably also stay in-state or go to a smaller college, as out-of-state tuition for most colleges is three times higher than in-state tuition. You can also consider starting your degree at a community or state college and then transferring the credits to a bigger university. Since the 2010s, most state colleges have programs to ensure all your credits count towards state university programs. Check with your state's higher education governing organization. That's a mouthful, to find out whether schools are covered by the system. Again, for most states it would be just state university system. If you're sticking to a local college or vocational program that would only be a few credit hours, then paying out of pocket is definitely feasible and not too much of a burden. However, unless you have a parent or are a parent that is making over$150,000 a year, and you have a house that's fully paid for, then paying out of pocket for a four-year degree or master's degree or any other degree is not really the best option. Use one of the other methods discussed in the episode. Last and most definitely least on this list of how to pay for college are loans. Student loans are a bane on the American economy, keeping money that should be circulating in local economies or savings accounts locked in the pockets of both the government and private lenders. I have no shame in my disgust of student loans, but there is a valid debate on the subject. On the one hand, student loans can help cover the gap of education, or the cost not covered by scholarships or grants interest-free, if it's subsidized. On the other hand, it can take years to get a job that pays you well enough to have a decent life while paying back loans. Not to mention that schools are now using loans to calculate their tuition increases, which is one of the reasons tuition has inflated faster than the economy and pay as a whole over the past 20 years. My general advice is to not get a loan at all. A message I would have stamped on my brain if I could go back to my high school self. Alright, it's time for a recap! You gotta you gotta let me play every once in a while, guys. Here is a non-exhaustive, that means incomplete, list of how to pay for continuing and higher education. 529 savings plan prepaid college in select states, TAFSA or the free application for federal student aid. CSS Profile, which is again select private school aid, free colleges for select schools, military academies, and the like. Work or corporate funded education, this could be tuition assistance or tuition in exchange for employment. Scholarships, again the student initiated way to search and apply for money. Grants, mainly federal that you apply for through the school you're going to, out-of-pocket payments, and student loans. Lots to digest here, but again, if you are more financially concerned, you should still be thinking in financial aid packages. And if I were to put this into percentages, I would argue that no more than 20% of your college funding should come from loans. If we were to take a$40,000 a year cost, that would mean$8,000 from student loans. You could get another$7,000 from the Pell Grant if you filled out your FAFSA early. Let's say parents contribute another$8,000 from their 529 plan that they started 10 years ago. That leaves$17,000 that you would have to get in scholarships or other grants. Not a small number, truthfully speaking, but significantly less than the original 40k. And with that said, we're reaching the end of another wonderful episode. Thank you for tuning in, and if you are actually interested in following along with some of what we do here, your homework, if you are funding college or trying to get your student to fund college, is to get a composition notebook. Or you can start with just several pieces of paper, and to spend 20 minutes a day over the next seven days to start your scholarship search. I'll also have a link to a free download for a worksheet for listing down scholarships that has slots from up to, or not from a list up to 100 scholarships. Believe me, you're going to have to apply to at least double that over the course of your schooling, but finding them is the first step. This may seem like a difficult task, but a wise man once said that struggle brings strength. And again, if you bite it up or split it up into small pieces, then you'll be able to take care of it. 20 minutes a day. That's it. In the journey, you find the way. And in this journey, you'll find the way to fund your future. Be sure to like and subscribe so you can catch the next episode where I speak with job seekers in the area to see how they feel about our local economy. Until next time, set your goals, do the daily work, and of course, keep thinking ahead.