College is one of the most expensive purchases you’ll ever make, both financially and in time.
Often, the monetary cost becomes a huge factor in where you attend, as some students end up going to schools lower on their lists due to the costs involved.
It doesn’t have to be that way, however; there are ways to help offset educational costs – without graduating with tens of thousands of dollars in student loan debt.
There are many specific programs and avenues geared to help African American students pay for college. These can help offset the costs and make it more affordable - leading to a brighter financial future.
In this guide we will talk about the different options available for African American students and the steps they should take when deciding how to pay for college.
Step 1: Filling Out the FAFSA
The Free Application for Federal Student Aid, or FAFSA, is the first step to applying for financial aid of any kind. While filling it out, you’ll be asked about your financial situation in detail, as well as information about your parents’ income or others who might be helping you pay for school.
The FAFSA is meant to give an idea of what your financial need is, which is a criterion for many scholarships and grants. The application and instructions are available at http://www.fafsa.ed.gov/.Paying for college doesn’t have to be an impossible dream. We’ve just looked at a number of options, most of which don’t require repayment. Before you apply for a student loan, take the time to research scholarships, grants, and in-house programs at the colleges you’re considering attending.
Regardless of who you are or what you want to do, there’s probably a scholarship out there for you. Minority students are encouraged to apply for many of these programs – and some of them are specifically geared for you. With a little work, you may even end up going to college for free.
Step 2: Scholarships and Grants
Grants and scholarships are the best kind of educational assistance. You don’t have to pay them back, and they are given out by so many institutions and for so many reasons that there seems to be one available for everyone.
Some programs pay full tuition, some pay a percentage, and some are smaller amounts, but all of them add up to savings for you, both in the short-term and long after graduation. Receiving money you don’t have to pay back means more money in your pocket after graduation, when you land that first job.
Scholarships and grants have a wide variety of different criteria; while some might be predicated on academic achievement, others might be given out depending on where you live or even what your hobbies are. There are even scholarships for left-handed students, children of veterans, or single moms.
There is also a long list of programs specifically for African American students as well. In fact, over $50 billion dollars is given away to minority students every year. Let’s take a look at some of what’s available for African American students.
Scholarships at Historically Black Colleges & Universities
If you’re considering attending a historically black college or university (also known as HBCUs) you might be excited to know that many of them have in-house grants and scholarships designed for students who might otherwise have a hard time attending college due to financial hardship.
Spelman College in Atlanta, Howard University in Washington, D.C., and Tuskegee University in Alabama are all examples of HBCUs offering internal scholarships and grants for deserving or underprivileged students.
Check out this list to see all of the HBCUs in the nation.
Scholarships for African American Students
Even if you’re not planning to attend an HBCU, there is a whole world of scholarships out there for you as an African American student.
One such program is the Jackie Robinson Foundation, which offers not only scholarships but mentoring, internships, and much more. In order to be considered, applicants must be a graduating senior and member of a minority. In addition, you’ll need to be accepted to an approved four-year college or university in the United States, and show dedication and leadership through community service. Lastly, you need a minimum SAT score of 1000 combined in the math and critical reading sections, or a composite ACT score of 22. More information is available at the Foundation’s website, at https://www.jackierobinson.org/apply/.
If you’re a high school senior in Michigan, the Rosa L. Parks Scholarship Foundation might help you pay for your education as well. To apply, you’ll need a grade point average of 2.5 or above, submit an application and personal essay, and graduate by August of the year you’re applying. The website has further information and the application form at http://rosaparksscholarshipfoundation.org/Scholarship.htm.
The Thurgood Marshall College Fund offers four types of merit- and need-based scholarships for minority students. They are highly competitive, and applicants must be attending a bachelor’s, graduate, or law program. Because of their long-standing partnerships with hundreds of corporations across the United States, TMCF can offer programs across many fields of study, locations, and even member schools.
The Walmart Foundation First-Generation Scholarship Program is a joint venture with TMCF that awards $6,200 for one year to deserving black students who are first generation incoming freshmen at a historically black school.
The Apple HBCU Scholars Program is another TMCF offering that includes not only scholarship money but an internship with Apple and ongoing mentoring for the student’s senior year of college.
There are hundreds of scholarships available for black students – this is just a tiny sampling. It’s worth your time to do some research and find the ones that best fit your situation. There are other options available, such as educational savings accounts. We’ll take a look at those next.
Step 3: Using Educational Savings Accounts
Your senior year of high school isn’t the time to start thinking about college. In fact, you’ll want to start thinking about it far earlier. One way to save for college is a special kind of account called a 529 Plan.
The 529 plan is an account operated by either a state, or a specific college/university, and it allows you, your parents, or someone else to contribute to a ‘college fund’ that you can use for educational expenses. What makes the 529 plan advantageous is that when you withdraw the money for school, it’s not subject to federal taxes – as long as the funds are used for tuition, fees, books, and other approved school expenses. More information on 529 Plans can be found at the Internal Revenue Service website at https://www.irs.gov/newsroom/529-plans-questions-and-answers.
Other educational savings accounts are offered by specific banks. Wells Fargo, for instance, offers a Coverdell ESA, which is a tax-deferred account that allows someone to make contributions before taxes, up to $2,000 per year until you’re 18. You’ll need to use those funds before you turn 30, and they can only be used for direct educational expenses. If your family has an adjusted gross income of less than $95,000 per year, you can set up a Coverdell ESA.
Step 4: Using Student Loans
While student loans are often the first thing people think of when they consider how to pay for college, we’ve just talked about all kinds of ways to avoid taking out a loan. Borrowing money for college, in fact, should be a last resort.
While students understand that they’ll have to pay back their loan with interest, they often see it as something they can deal with later after graduation. The problem is that interest often continues to accrue while you’re in school, and that interest is then compounded – added to the principle balance.
This means you’ll end up paying interest on your interest, and the total amount continues to grow. When you do graduate, you’ll be starting out with a pretty big amount of debt; the average student with loans graduates with $27,000 worth of legal obligation that needs repayment starting only a few months after you finish school.
Sometimes loans are a necessary evil. You might have a GPA too low to qualify for certain scholarships, or perhaps your FAFSA doesn’t show you to have enough financial need to qualify for other types of free money. Whatever the reason, sometimes you can’t pay for college any other way.
If you do decide to take out a student loan, you need to understand that it is a legal obligation that could cause serious problems for you if you borrower smartly and stay on top of repayment.
There are two main kinds of student loans, and while each type has different benefits and characteristics, they both need to be paid back – and if they’re not, you can find yourself in very hot water for a long time. We will go over these below.
Federal Student Loans
When most people think of student loans they think of the kind that are offered through the federal government. They usually offer lower interest rates than other kinds of loans, and have much more flexible repayment options - such as income-based plans - that can help you when you’re first starting out after college. Federal student loans should almost always be taken out before private student loans.
You can find out more about federal loans at the Student Aid website, at https://studentaid.ed.gov/sa/types/loans.
There are two main types of federal student loans: subsidized and unsubsidized. Subsidized loans are reserved for those with considerable financial need. For these, the government pays the interest while the student is in school and during periods of deferment.
Unsubsidized loans, on the other hand, are available to any student attending an eligible college or university, regardless of financial need. With these, the government does not pay the interest while in school and during periods of deferment. It is wise for unsubsidized borrowers to make interest payments while in school to avoid excessive interest accrual.
Private Student Loans
Private student loans, unlike federal loans, are offered by private banks or other financial institutions. These are often less forgiving and have more strict repayment terms.
Private student loan lenders often want you to start paying them back while you’re still in school, and they can have very high interest rates. This is because, in order to be approved, you need established, solid credit history. Many high school and college students have not yet established credit history so they, in turn, are given higher interest rates as they are a greater risk.
Students can, however, add a cosigner to the loan to help them be approved - also often helping lower the interest rate as well.
If you do have to take out a private student loan to help pay for college, be sure to know the risks and read all of the fine print. Also, it would be wise to make a plan for repayment before stepping foot on campus.
College is an exciting time for any young adult. It can be exhilarating leaving the house for the first time and experiencing more freedom than they've ever had before. The problem is, however, that it isn't cheap. The cost of college is a huge issue for thousands of students every year.
Luckily for African American students, there are tons of opportunities designed specifically to help them afford their college educations without having to take on massive amounts of student debt.
If you are an African American student looking to pay for college, sit down, do some research on your options, and make a plan. Remember: Always look for free money first - such as scholarships and grants - before turning to savings and student loans.