by Katerina Nikolas

Created on: February 19, 2010   Last Updated: February 25, 2010

If raiding the family coffers doesn’t cover the cost of your college education it will hardly be a surprise in this astronomically expensive age of schooling. If the costs don’t put you off, and you can handle the thought of debt to be repaid  over many years, in a thoroughly responsible manner, then it’s time to find ways to fund it.

Few can get away without using a student loan these days, but before you start on the application route plan ahead and see what kind of scholarship or grant you are likely to qualify for. There are literally thousands of scholarships up for grabs, some brain based whilst others are brawn based, left hand based, or dire need based. You can apply for as many as you like if you meet the requirements, but never fall for a scam and send money off. Individual colleges often have their own scholarships which could well make it worth re-considering your choice of school. Look within your state too as there are state funded grants. Always remember the more you can obtain via this route the less you will need to repay.

The next step is to apply for federal student loans through the FAFSA. Depending on the size of the family coffers this time you will be eligible for either a subsidized or unsubsidized guaranteed federal Stafford loan. These are free of credit checks, but needs based, so the more income your family can hide, the better the chance of receiving the subsidized loan. Both loans have capped fixed interest rates but the subsidized one has better benefits, as the federal government assumes the interest payments whilst you complete your education. Your actual repayments don’t begin until six months after graduation. With the unsubsidized loan you will be responsible for paying the interest on the principal whilst in college. There is a good chance that if you do qualify for the subsidized loan that you will also meet the requirements of the federal Pell grant, which does not need repaying.

If your parents happen to have enough money, and like you enough to help out with college costs, they can take out a federal PLUS loan themselves. This necessitates them having a good credit score, and they won't be able to transfer the debt to you, ever. If this is not an option then you are left with the last resort of taking out a private loan to meet those final costs, but it is unlikely anyone will give you one unless you have a responsible co-signer to endorse it for you. They really have to like you to

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