Post by Citizens 

Preparing for college is an exciting journey, but it can also be stressful. Between choosing a major, taking the SATs and ACTs, researching schools and applying for scholarships and financial aid (just to name a few), there’s so much work that goes into getting ready for and applying to college.

Once the acceptance letters and financial aid offers start rolling in, a whole new challenge can arise — if your financial aid offer and existing savings don’t cover the cost of college, how can you close that financial gap?

Don’t panic — there are plenty of options we’re going to cover to help you figure out how you can pay for school. While this time can be stressful, it’s also exciting! So take a deep breath and read on to find six ways to help you close the college funding gap when financial aid isn’t enough.

1. Seek additional scholarship opportunities

One common way to help pay for college is through “gift aid,” or grants and scholarships. These are referred to as gift aid, because while there may be other obligations, they typically don’t need to be repaid.

Most grants are awarded to students based on financial need and will be included in the financial aid offer based on the information that was filled in on the FAFSA. Scholarships are both need- and merit-based. There are many companies and organizations that offer scholarships, including ones you probably haven’t even thought of! While there may be some scholarships already included in your financial aid offer, you can always apply to more on your own.

According to Ann Lague, Vice President, Student Lending Sales at Citizens, applying for scholarships is well worth a student’s time. She said, “If you spend five hours applying for scholarships and you win $1,000, you just made $200 an hour. And remember, scholarships are not limited to students who are going into their freshman year of college. Apply every year.”

The Citizens college planning platform, College Raptor^®, has a free Scholarship Search tool for students looking for additional aid. There are thousands of scholarships on the site along with a whole library of articles and resources on planning for college. In addition, check with your local library, banks, churches, your guidance counselor, and small businesses to see what types of scholarships they have.

One important note is that when you receive a private scholarship from a company or organization other than the school, you’re required to report it to the college. This could potentially result in a reduction of other types of financial aid, such as grants or loans. This is known as scholarship displacement or financial aid displacement. You should check with your college’s financial aid office to see what their scholarship policies are to make sure you’re maximizing your scholarship efforts.

2. Discuss options with the financial aid office

A college’s financial aid office is also available to help navigate financial aid, scholarships, tuition payments, and more.

“If you have your heart set on a certain school but it is financially out of reach, you may want to contact the financial aid office to discuss your options,” Lague said.

The financial aid office can review the offer and discuss if there are additional grants or scholarships that are available. They can also walk you through work study opportunities or federal student loans you can apply for. If federal work study isn’t included in the offer, you can research part-time jobs that are hiring in the area (there may even be some available at the school), and put that money toward tuition every semester.

While you’re meeting with the financial aid office, it might be beneficial to make an appointment with the billing office as well. It wouldn’t make it cheaper, but being able to set up a tuition payment plan could make the cost easier to manage.

3. Consider more affordable colleges

It’s no secret that college is expensive — but depending on the type of college, there’s also a wide range of costs. Community colleges are usually the least expensive option, plus you can save money on room and board if you’re able to live at home. If you opt to register for a community college to save money for the first two years, you could transfer to a four-year school after graduating with an associate degree (just make sure all of the credits can be transferred).

If a community college isn’t for you, you could consider attending an in-state public college instead of a private college. According to College Board

, a public four-year in-state school is about 75% less than a private nonprofit four-year college.

You may have had your heart set on a certain school, but sometimes it truly just isn’t feasible. If you and your family can’t make the first-choice college work, consider the other less expensive colleges you were accepted to — chances are, they have similar majors, programs, clubs, and sports that you’ll enjoy just as much.

4. Ask for contributions

Parents or guardians may or may not be already helping to finance your college education, but there are other ways to help supplement it. Instead of asking for birthday or holiday gifts this year, you could ask for contributions to help fund your education, or even set up a crowdfunding site to make contributing simple and easy. Every little bit helps, and you might be surprised by how many people want to chip in.

5. Explore student loans

After maximizing grants and scholarships, you may need to consider student loans to fill the financial aid gap. If you do, start with federal student loans. These usually have lower fixed interest rates compared to private student loans and other benefits like income-driven repayment plans and student loan forgiveness programs.

Most federal loans have lower borrowing limits than private student loans. For example, consider the borrowing limits for Federal Direct Subsidized and Direct Unsubsidized loans. For dependent students who are first-year undergraduates, the annual loan limit is $5,500 ($3,500 of that can be subsidized). If there is still a shortfall after maximizing federal student loans, private student loans could help with the remaining cost.

Private student loans are provided by banks, credit unions, and other lenders. Most private student loans max out at your college’s cost of attendance, minus other financial aid you’re receiving. There may be a variety of options to choose from, such as fixed or variable interest rates and different repayment types. Since the application process for these loans includes a credit check, a cosigner is often needed for students who haven’t yet established a credit history.

If parents are willing to take out their own loan on behalf of their student, they can see if they qualify for a federal parent PLUS loan (also known as a Direct PLUS Loan) or a private student loan for parents. Parent PLUS loans don’t have the same borrowing limits as other federal student loans, but they have higher interest rates, plus an origination fee.

Interest rates on private student loans vary by lender and are based on many factors, including the borrower’s credit quality (and cosigner’s credit quality, if applicable). “Most private student loan lenders, like Citizens, don’t charge an origination fee on student loans. A lower interest rate and lack of origination fee could save students and parents thousands of dollars throughout the life of the loan,” Lague told us.

Bottom line? It’s worth doing your homework to compare each type of student loan and see what gets you the best deal that suits your financial situation. Most financial institutions will give you a rate quote without a hard credit check, so you can see which option is most beneficial for you. You can get your rate quote from Citizens in about two minutes.

6. Appeal your financial aid offer

Lastly, if you think there was an error with the financial aid offer, you’re able to appeal it. Common reasons for submitting an appeal letter include major life changes or if there was a mistake on your FAFSA. Some reasons include:

• Job loss or income change
• Death of a family member
• Severe health issues
• Unexpected medical emergencies and costs
• New childcare costs

If you want to appeal, you would have to work with your college’s financial aid office. You’ll likely have to submit a letter explaining why you’re appealing and provide any supporting evidence that’s required.

Closing the financial gap

Attending your top choice might result in some gaps between what was received in the financial aid offer and the cost of college. There are ways to close, or at least make the gap smaller, and we can help give you options to tap into when financial aid isn’t enough. Explore our student loan options that may be able to help turn going to your dream school into a reality.