Recent graduates may get an extended break in their student loan payments, but college loans have become a major barrier for almost everyone, including degrees.
Sarah Foster, an analyst at Bankrate.com, said: “In order to increase the index of college tuition, it may be almost impossible for students to attend and pay for college without taking out a loan.”
With many students borrowing to cover at least part of the cost, outstanding education loans now top $ 1.7 trillion.
“Student loan debt is an important burden that follows borrowers through every major financial decision, from moving and buying a home to emergency and savings for retirement,” Foster said.
But there is another way. Experts say that reducing the amount you borrow will reduce your debt burden in the long run. Here are three ways to do it.
1. Complete an FAFSA
Students must complete a free application for Federal Student Aid to access any assistance, including scholarships and grants.
Unlike student loans, scholarships and grants are basically free money, which means you don’t have to repay them.
The US Department of Education awards about $ 120 billion each year to help students pay for higher education. And outside of federal aid, you may also be eligible for financial assistance from your state or college.
Year after year, high school graduates lose billions upon billions of grants because they do not complete the FAFSA. Many families mistakenly assume that they will not be eligible and will not even bother to apply.
2. Take advantage of private scholarship money
In addition to free aid provided by the government and colleges and universities, many private scholarships are available, often funded by foundations, corporations and other independent organizations.
Free scholarship search sites, such as fastweb.com and bigfuture.com, also check a student’s background as opposed to a scholarship database.
David Tabachnikov, executive director of the scholarship search site ScholarshipOwl, said: “You do not have to be the highest ranking person in your class to win the scholarship.
“Scholarships are awarded to all types of students, such as those seeking STEM majors or students living in Indiana.”
3. Negotiate a good deal
Consider your financial aid reward letter as a starting point.
Stavart Siegel, president of FAFSAssist, says many schools, even Ivy League schools, often accept requests for more help, not just advertise it.
But first, make sure you understand the difference between a scholarship and a loan, whether those funds are renewable in four years, and whether they come with a contingency to maintain a certain grade point average.
Then contact the school’s financial aid office and frame the conversation based on the type of help you are seeking.
There is great news for the more than half a million people who have student loans and why they may be able to say goodbye to their loans soon.
If there is a need-based problem beyond what is mentioned in the financial aid document, such as an older sibling returning home after college, caring for elderly grandparents, increasing family-related expenses or losing a job, the school and the enrollment should be explained. If possible.
Alternatively, if the financial aid packages of other comparative schools are better, it is also worth noting the school in an application for more qualifying assistance.
“Considering the situation at the moment, colleges are very interested to hear from families,” Siegel said, and “I see colleges willing to go ahead and offer more money.”
This article Originally published in English by Jessica Dickler For our sister network CNBC.com. Write for more from CNBC Here.