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Student Loans: Filling the Gap to Pay for College

How to find the perfect student loan to help you pay for school.

Kathryn Knight Randolph

June 23, 2020

Student Loans: Filling the Gap to Pay for College
2020 can be characterized by one word: unprecedented. It seems that the world has been hit with everything this year: wildfires, a pandemic, global unrest and protest in support of the Black Lives Matter movement. While we’ve experienced this unprecedentedness on a global scale, it’s also hit close to home – especially for college students. During the summer months, college students are typically worried about next year’s housing arrangement or course schedule. This year, however, the concerns are a lot bigger. Students and parents are having to ask themselves, “Can we even afford college at this point? Should we pay such a high sticker price for virtual learning? How can we bridge the gap between what we can pay – and what we can’t?” Looking for more COVID-19 student-impact information? Find it here.

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While you can’t personally control a pandemic or a culture shift, you can control how you pay for college – even in these unprecedented times. Let’s take a look at what you can do to make a college education more affordable right now.

1. Apply for federal student loans.

First, you can apply for student loans in order to bridge the gap between your existing financial aid package and what you can afford to pay. Oftentimes, the thought of taking out student loans in order to pay for college is enough to make students give up on their dream of attending college altogether. But student loans don’t have to be scary. In fact, it’s never been a better time to borrow, ironically enough. In May, Congress passed legislation on the student loan rates for the upcoming academic year, making them drop to a historic low of 2.75% on July 1. For reference, just last year, the interest rate on federal student loans was 4.53%. A full list of this year's student loan rates can be found at To qualify for federal student loans, you must submit the Free Application for Federal Student Aid (FAFSA). Even if you don’t qualify for financial aid, you can get access to several federal student loan programs simply by filling out the form. These federal student loans include a direct unsubsidized loan, the Parent PLUS Loan and the Grad PLUS Loan. There are limits to how much you can borrow per year under these loan programs; however, the amount may just be what you need to bridge the gap. At the same time, students and their families need to consider borrowing smartly. Never borrow more than the total amount of your expected annual salary after graduation. According to the National Association of Colleges and Employers (NACE), recent college graduates make on average about $51,000 per year. With that, students should not borrow more than $12,750 per year – if they plan to attend and graduate college within four years.

2. Appeal your financial aid package.

Did you know that your financial aid package is actually negotiable? It’s true. If your financial aid package has left a large gap between what you can pay and what the college costs, you may be able to appeal your financial aid package. This is especially true if your family has met some unexpected financial circumstances, such as job loss. Given the number of Americans filing for unemployment because of the Coronavirus pandemic, it’s very likely this will apply to many families. If you wish to appeal your financial aid package, you can speak to a financial aid officer at your college. You will be required to detail the change in circumstances, and then the financial aid officer will be able to make a professional judgment on your case. It’s possible that you will receive grants, scholarships or work study to help alleviate college costs. It's also very likely that you may qualify for subsidized student loans now. The main difference between the subsidized and unsubsidized student loans is that the federal government actually pays your student loan interest while you’re in college on a subsidized loan. As far as loans go, this is a great deal; you’ll never encounter another loan program quite so generous again in your life.

3. Apply for private student loans.

If you still have a gap after exhausting your federal student loan options, it’s time to consider taking out a private student loan. These are available from independent financial institutions, banks, credit unions and online providers. To narrow down your list of who to apply with, contact your school’s financial aid office and ask for their preferred lender list. This is a list of banks and institutions that the school has a rapport with, which can make the process more seamless. Be sure to compare your student loan options to save money on the cost of borrowing. Though you can take out a private student loan at any point during your college career, you should apply within a reasonable time frame of tuition being due. Don’t wait until the week beforehand. Loan experts recommend applying between 30 – 60 days before the school year starts in order to have your funding ready. Finally, you’ll very likely need to find a cosigner. According to MeasureOne, 92% of undergraduates required a cosigner for the 2019 – 2020 school year. This is typically the case because students have a very limited credit history, low credit score and don’t earn very much income. Ask your parents or a close family friend to be your cosigner; but remember, if you fall behind payments after graduation, it reflects poorly on their credit score in addition to yours.

4. Other Ways to Pay for School

If this is any consolation to you, many students and their families are in the same boat this year. Given the cost of college, job loss and the economic downturn, a sizeable percentage of students are opting to make different plans from what they had originally intended to do this school year. In fact, SimpsonScarborough predicted that colleges may see as much as a 20% decline in enrollment this fall. So, what are your options then? First, consider attending community college close to home. This is a much more affordable option and is especially convenient for incoming college freshmen and sophomores who may only be taking general education courses. Many students are also opting to take a gap year. Though this is actually a very familiar path for Europeans, Australian and New Zealanders, it’s actually pretty rare to find a student in the U.S. who is opting to put their college education on hold for a year. However, given the unprecedented circumstances, many students are opting to do just that. Continue your scholarship search. So often, students only search for scholarships during their junior and senior year of high school. However, there are just as many opportunities for current college students. Check your Fastweb profile frequently, and commit to applying to one to two scholarships per week. Finally, try to find a part-time job to help offset the cost of college. Many employers will work around your student schedule, and some may even help you pay for college through an Employer Tuition Assistance program. You can find part-time jobs in your area right here on Fastweb. Whatever circumstances you’re facing this year – or over the next four years – you should know that you have options. From student loans to scholarships to part-time jobs, there is more than just one way to pay for college. In fact, many students combine all of these resources in an effort to pay for college. You can too, and Fastweb is the perfect place to get started.

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