This article is published in the 2014 I’m First Guide to College.

Smart Borrowing for College

By Ann Coles

Paying for college can be very intimidating, but smart borrowing ensures your investment in youreducation will pay off. Here are some tips to help make going to college affordable.

1. Use scholarships, grants, savings, and work-study earnings before taking out loans

• Grants and scholarships are gift money that you never have to repay. Work-study requires you to earn the money awarded.

• Complete the FAFSA (Free Application for Federal Student Aid) as soon as possible after January 1 and definitely before March 1 of the year you plan to go to college. Some colleges also require you to complete the CSS PROFILE. If your family has limited income, you may be eligible for a fee waiver.

• Search scholarships in online databases and talk to high school counselors, public librarians, community organization and church staff, parents’ employers and college financial aid officers.

• Save as much money for college as you can from after-school and summer jobs.

• Talk to a financial aid officer at the college you want to attend if your family has special financial circumstances that make it difficult for them to help you with college costs.

2. Reduce borrowing by using other options

• Use an interest-free monthly payment plan that allows you to spread the cost of paying for college over the school year. Your college financial aid office can recommend a plan.

• Work part-time but preferably not more than 15 hours a week so that you will have enough time to do well in your studies.

• Consider going to a college that has eliminated or limited loans for most students and gives aid only in grants and scholarships.

3. Borrow wisely

• Borrow only what you need because loans need to be repaid— even if you don’t finish college. Never use student loans to pay off other bills or buy things you may want but don’t need.

• Carefully compare your financial aid award letters from different colleges. If you don’t understand an award letter, call the financial aid office and ask someone to explain it to you.

• Borrow federal student loans first. Federal loans (Perkins and Stafford Loans for students, PLUS loans for parents) have low fixed interest rates and flexible repayment plans. Apply for a private student loan only if federal loans are not enough.

• Consider options for having your student loans forgiven, such as volunteer service (participating in the Peace Corps, VISTA, or AmeriCorps).

4. Never use credit cards to pay for your education

• Credit cards are the most expensive source of funds. If you must borrow, exhaust all federal loan options first and then consider private education loans to pay for expenses.

• If you have an emergency, talk to a financial aid advisor to see if your college has an emergency loan fund or can help you in some other way.

Ann Coles has been working on college readiness since the 1960s and currently serves as Senior Fellow for College Access Programs at uAspire, an organization dedicated to ensuring that all young people have the financial information and resources necessary to find an affordable path to—and through—a postsecondary education.