by Carlos Reyes

Created on: February 18, 2007   Last Updated: May 02, 2007

How to get, and use, cash for college

This is old advice, butYOU must look for money. If you spend some time digging, you might be able to pay yourself to go to school.
You should also always be on the lookout for scholarships and grants. Many of these go unused because no one claims them. If your grades are up to it, look for any honor societies in your college or university (Phi Theta Kappa for 2-year institutions, and Phi Kappa Phi for 4-year institutions). These organizations can help you find and apply to scholarships, as well as raising your chances for receiving the award. Some schools have automatic scholarships if you are a PTK or PKP memberremember although there are Greek letters here, these are honor societies, not frat houses. If you are lucky enough to find free money, don't squander it all unwisely.

Being an undergrad student gives you lots of opportunity, but it's important to use that opportunity wisely. For example, you can apply for grants, which you do not have to repay, but you can also apply for loansthis is not always a bad thing if you can use the money well. Remember that student loans typically have the lowest interest rates out there, and are often locked, which you wantnever get a load with a variable rate because you don't know what that rate will be in the future. Finally, interest you pay on those loans will be tax deductible later, so it's better to get a $5,000 student loan, than a $5,000 personal loan later.

Some government loans are "subsidized." This means that not only do you pay no interest as long as you remain in school, but the government "subsidizes" your loan by paying the interest for you. If you borrow 1000 dollars on a subsidized loan, then stay in school for 4 years, at the end of the 4 years you owe 1000 dollars, not 1000 plus 4 years of interest. Additionally, many loans give you a grace period of 6 months after you graduate to find a jobduring which you do not have to pay interest. Additionally, if you go back to school for another degree, the interest stops again. If you borrow 1000 dollars, place that money into a certificate of deposit. Let it sit and accumulate interest while you are in school. A CD is ideal because you won't be tempted to spend the money. When you graduate and the CD matures, pay off the loan with one check, and keep the interest. You have built credit, and earned a little something on the sidebuy yourself a graduation treatand you have spent nothing in the process.

I have known people who have used grant and loan money to buy stocks, to invest in art and antiques, as a down payment for a house, and in all manner of other ways. These are other options and they might bring a better return on investment, but never bet money you can't afford to loose. The CD is a safe bet, which won't make you rich, but you never want to bet with someone else's money. Finally: ALWAYS ask questions. You should know the terms specific to your loans before you sign any paperwork, and know what you're getting into.

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