As previously discussed on this website, where you attend college can have a massive impact on your student debt story. Indeed, decisions you make when choosing colleges can determine how much student debt you ultimately need to borrow. Some of our guest articles have already included tips on choosing colleges that will minimize the amount of student loans you need to borrow in order to pay for college. By following this and other advice, you can set yourself up for success right at the beginning of your student debt journey.
One of the most important resources that will help you minimize student debt as an undergraduate is need-based financial aid. Everyone knows about merit or athletic scholarships, and these awards can minimize the student debt burdens of those who are selected for these accolades. However, need-based financial aid is available to more students than might be eligible for merit scholarships.
For those of you who may not know, need-based financial aid is money provided to eligible students from government sources or colleges themselves. In order to be a candidate for need-based financial aid, you need to demonstrate financial need by showing that your family cannot substantially assist you in paying for college. Usually, you must fill out forms like the FAFSA and the CSS Profile, and provide supporting documents like tax returns and bank statements in order to apply for need-based financial aid.
Many prospective college students might not think that they qualify for need-based financial aid, since they are not poor and have a middle-class background. However, as I can attest to from first-hand experience, you do not need to have dire financial need to qualify for need-based financial aid. Indeed, if you are one of many children, only have one income-earner in your family, or have a number of other circumstances, it is likely that you will qualify for need-based financial aid. Even if you are from a family that has an annual income in the six figures, you should still apply for need-based financial aid, since you could still receive a surprising amount of assistance.
Not all universities offer need-based financial aid, and many state schools do not disburse as much need-based financial aid as private colleges. This is important to keep in mind when choosing colleges that will minimize the amount of student debt you need to borrow. I had been told all my life that attending a state school was a more affordable option than enrolling at a private college. And it is true that state schools typically have lower price tags than private colleges and universities.
However, the amount of financial aid available at private colleges can easily make up for the fact that tuition at most private institutions is higher than at state schools. Indeed, I only borrowed $21,000 to earn my B.A. and M.A. degrees from a private university, since I obtained generous need-based financial aid. I am sure that I would have borrowed more student debt if I attended a state school. None of my family members who advised me during my college admissions journey went to college themselves, and they kept telling me the age-old wisdom that attending a state school would help me minimize my student debt. This advice turned out to be incorrect, and if you qualify for financial aid, you might be able to borrow less student debt by attending a private college.
Of course, college is typically just one part of an educational journey, since many people earn graduate degrees as well. As such, it is important consider your future aspirations when choosing colleges that will minimize your total student debt burden. For instance, if you know that you will eventually apply to medical or law school, you might want to attend a higher-ranked college even though it costs a little more. Of course, if you qualify for need-based financial aid, you will likely be able to attend the best institution that admits you. However, even if you do not qualify for need-based financial aid, it might be better to decline merit scholarships at lower-ranked schools to set yourself up for the graduate school admissions process.
As will be discussed in future articles, many graduate programs also offer merit scholarships, and some top institutions provide need-based financial aid to qualified graduate students. Indeed, I received need-based financial aid as a law student, and many law schools offer merit scholarships to qualified candidates. So long as you do not borrow more than $50,000 or so to earn an undergraduate degree, it might make sense to attend a better college to set yourself up for success when applying to graduate school.
If you know that you will eventually attend graduate school, you might also want to select a college that has dual undergraduate and graduate degree programs. Many colleges like my alma mater have programs through which students can complete a graduate degree in a number of disciplines while earning their college degrees, and in less time than it would take to earn both degrees separately. Indeed, I earned my B.A. and M.A. in only four years through such a dual-degree program even though it might take five or six years to earn those degrees separately. Since I was paying very little for college due to need-based financial aid, I basically earned two degrees for the price of none, and dual degree programs can help you minimize student debt.
All told, choosing colleges that will lessen your student debt burden is a complicated process. Everyone should apply for financial assistance if eligible, and sometimes it might make sense to attend the best institution regardless of price. In addition, you should also seek out dual-degree programs that can minimize the total amount of debt you need to borrow to complete your education.