Post-secondary education is invaluable for many reasons. An educated workforce not only strengthens the economy and drives innovation and change, but it also leads to improved social and cultural conditions across the country.

Aside from societal benefits, having an education can also make you a more attractive candidate for employers because you have the training to enter into markets that require specialized skill sets.

Though going to school has no shortage of advantages for significantly improving yourself and society, it can be expensive to enroll and take these courses, which not everyone is able to afford.

Here are some of your options for financing your post-secondary education and the pros and cons of each option.

Federal and Private Student Loans

Loans are a common form of financial aid given to students to pay for college tuition, school supplies, books, transportation, and housing. Because it is borrowed money, loans must be repaid with interest.

Students can apply for a loan from the federal or state government or for a private loan from a bank, credit union, or other private lender.

Federal student loans have quite a few benefits over private loans, including:

Easy application process: With federal loans, the process for applying is quite easy and all you have to do is submit an application online. There is no need for a credit check, and in fact, a federal loan can actually help you to build credit. Alternatively, private loans, like regular loans, require a clean credit record and may also ask that you have a cosigner.

Low, fixed Interest: Federal loan interest rates tend to be lower and fixed in comparison with private loans, which may fluctuate with the market. Also, government loan interest may be a tax write off, whereas a private loan may not.

Flexible repayment: Federal loan payments may not need to be paid until after you’ve completed college, whereas private loans usually require payments while you are enrolled in school. Generally, federal payment plans have greater flexibility too and might adjust your payments if you enter into public service or discharge your loan for certain circumstances.

As you can see, getting a private loan is not always the best choice, given the expense and stricter lending terms. However, if you have exhausted all your other financing sources, a private loan may be worth considering to cover the remaining portion of your education. Just be sure you can commit to making payments and shop around at several lending institutions to find a good interest rate.

State loans have their own lending programs and usually require that the applicant be a resident of that state or attend school in that state. The terms of state loans vary from region to region.

Scholarships and Grants

Scholarships and grants are two forms of student aid that do not need to be repaid.

There are many different scholarships out there, each based on its own set of criteria. Some are awarded based on academic merit, athleticism, community involvement, religion, chosen major, love for animals—you name it.

So long as you apply and meet the requirements, scholarships can be a great way to add some extra cash to your college fund, and the greatest benefit is that you don’t have to pay them back.

While free money has seemingly no downside, scholarships rarely cover your entire education costs, which is why it’s recommended that you research and apply for as many as you can before school starts.

Grants are different from scholarships in that they are need-based. The federal and state government, post-secondary institutions, and organizations issue grants to help those in financial need. The amount is determined through the applicant’s individual needs and the cost of enrollment.

Keep in mind that if you withdraw from school, you might have to repay the grant back to the entity who issued it.

Miscellaneous Financing Options

DIY: Another option for paying for post-secondary is to do it yourself. Of course, not everyone has that option, but if you can manage to pay at least a portion of your tuition, there are some decent tax saving benefits involved.

Work-Study: As part of Federal Student Aid, students can apply to be a part of a program known as Work-Study, which gives part-time work to students in need of financial assistance. Usually the job is related to their field of study. Earning potential varies with financial need, if you are an undergrad or graduate, and more factors.

Family Loan: Another alternative includes getting a loan from a family member. Any time family members are tied up in loans or money, it can be tricky, so discuss their decision to fund your schooling and make sure there are no strings attached. If they do require a payment plan, or want to charge interest on top of their loan, draft a promissory note to keep track of the details and lessen the chances of any future misunderstandings.

Employee Benefits: Several companies (Best Buy, Starbucks, Apple, Home Depot, etc.) have demonstrated their support for higher education by adding tuition reimbursement to their employee benefit packages.

Generally, to be eligible for this funding, the courses must be relevant to the employee’s role at the company. For instance, if you worked at Bank of America, you might be eligible to take a course related to Corporate Finance or other financial sectors.

Funding Your Future

The decision to go to college is an investment in your future—one that will give you work-skills and also the knowledge to contribute to society as a whole.

If you are considering a course, a program, or a degree, take time to evaluate your financing options and put together a plan that works for you. For additional guidance, work with a Financial Aid professional who can offer helpful advice on managing your finances, applying for financial aid, and staying organized throughout the process .

What financial aid options are you looking into? Do you have any tips to share?


Posted by Kristy DeSmit

Kristy is a blogger, Twitter enthusiast, and company legalese interpreter.