Only 35 percent of Hispanics between the ages of 18 to 24 were enrolled in college in 2014 even though 83 percent claim education is a very important political issue.
A college degree is more important than ever before, but at the same time, college is very expensive. The high cost of an education has made it difficult for many to get a degree, and this fact holds true for Hispanics.
Those who find themselves dealing with this conundrum have options. There are ways Hispanics can pay for two- and four-year degrees at local and out-of-state colleges.
Scholarships and Grants
Scholarships and grants are the most attractive option for Hispanics and other students. They are essentially free money given to students to use for college. Unlike loans, scholarships and grants do not have to be paid back.
Grants are awarded based on need while scholarships are awarded based on merit.
Various organizations and government bodies award scholarships and grants. Students can get them from the state or federal governments, private organizations, nonprofit organizations, or college or trade schools.
General Scholarships and Grants
There are lots of scholarships and grants available to the general public. Students should begin the process by applying for these.
For instance, students can apply for the $5,000 Nitro College Scholarship or the $1,000 Abercrombie and Fitch Global Diversity and Leadership Scholarship.
Search for scholarship offers using the U.S. Department of Labor’s scholarship search tool. This tool also includes a search function which allows students to look for specific types of scholarships.
Students also have lots of options for grants. The Federal Pell Grant is a popular option. Typically awarded to undergraduate students, the amount of the grant is based on financial need, cost of attendance, and status. For the 2017-2018 award year, the maximum amount is $5,920.
The Federal Supplemental Educational Opportunity Grant is another option. The award amount ranges from $100 to $4,000 per year, and it depends on financial need, the date of the application, the amount of other aid received, and the amount of funds the school has available. Not all schools offer this grant.
Students who are interested in becoming teachers are encouraged to apply for the Teacher Education Assistance for College and Higher Education Grant. In order to be eligible, students need to teach in a high-need field that is located in a low-income area. Those who fail to meet the criteria have to pay the grant back.
Finally, students can apply for Iraq and Afghanistan Service Grants if their parents died while serving in Iraq or Afghanistan.
Scholarships and Grants for Hispanics
There are ample scholarships and grants specifically for Hispanics. The Hispanic Scholarship Fund General College Scholarship is one such option. This scholarship has an award amount of $1,000–$5,000 and students must have at least a 3.0 GPA to qualify.
The United Health Foundation National Association of Hispanic Nurses scholarship is another choice. Those who want to pursue nursing can apply for this scholarship.
Finding scholarships specifically for Hispanics is easy. Go to the U.S. Department of Education’s scholarship search tool and type the word “Hispanic” into the search box. That should bring up all the scholarships geared toward Hispanics.
Minority grants are available on the state level. The Jose Marti Scholarship Challenge Grant Fund is one such option. This need-based merit grant is awarded to Hispanic students who attend various public or private institutions in Florida. Students are encouraged to check with their state governments to find grants in their area.
How to Get Grants
Students who are interested in obtaining grants from the federal government need to fill out the Free Application for Federal Student Aid, or FAFSA. The FASFA is also required to obtain loans and some scholarships.
Filling out the FASFA should be the first step all prospective college students take before beginning the financial aid process. It is quick and easy to fill out, and it helps students determine how much federal aid they qualify for.
Students and parents that plan for college in advance can take advantage of 529 savings plans. These tax-advantaged savings plans are sponsored by educational institutions, states, and state agencies, making it easier for people to save for higher education expenses.
There are two types of 529 savings plans. There are college savings plans and prepaid tuition plans. Let’s take a closer look at both.
College savings plans allow account holders to deposit funds and choose investments to grow those funds. Fund holders can invest in bond mutual funds, stock mutual funds, and money market funds, among others. Many invest in riskier options at first and then switch to safer investment options as the beneficiary gets closer to college.
This fund typically can be used at the college or university of the beneficiary’s choosing. These plans often have a contribution limit in excess of $200,000, and they are open to both adults and children. Enrollment is open all year and there is no residency requirement.
However, these plans don’t come with a state guarantee. When people invest their money they have to deal with market risk. That means the investment can increase in value or it can decline, depending on the market.
That is why people typically switch to safer investments when the person gets close to attending college. A market drop could deplete the plan right before the person is set to enroll in college.
Prepaid tuition plans allow people to purchase credits at a college or university. The credits are redeemed for tuition when the person enrolls in college. Some plans also allow people to purchase credits for room and board, but that option isn’t common.
These saving plans lock in tuition prices, so people will know how much they will pay when they open the plan. The plans typically are guaranteed by the state, and they have an age limit in place for the beneficiary. There is typically a residency requirement and they often come with a limited enrollment period.
People can buy a 529 plan through a broker or get a direct-sold college savings plan. Direct-sold plans allow people to go straight to the source to buy the plan. This is a good way to avoid some fees. The Vanguard 529 is a good example of a direct-sold plan. This is one of the most popular 529 plans on the market.
Some students might have to take out student loans to pay for college. Loans can be used for tuition and other expenses incurred by the student. While many students do not like the idea of taking on debt, some do not have a choice. Many students see loans as the only way they can attend a college or university.
Students can choose between federal and private loans. Many students get a combination of both types of loans.
Federal Student Loans
The federal government offers student loans. These loans come with fixed interest rates, and the government offers income-driven repayment plans. Students often don’t need a cosigner for these loans, and they can be consolidated with ease. These loans don’t have a prepayment fee, and repayment can be deferred until the student graduates.
The federal government offers Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Federal Perkins loans. The Federal Perkins Loan Program is a school-based loan and awarded to students with exceptional financial need. The U.S. Department of Education issues all other federal loans.
Direct Subsidized loans are available for up to $5,000 per year while Direct Unsubsidized loans are available for up to $20,500. The maximum amount for Direct PLUS Loans is determined by looking at the cost of attendance and other aid received. Direct Plus Loans are awarded to parents and are the only federal loans that require a credit check.
Ungraduated students can receive up to $5,500 per year from the Federal Perkins Loan Program while graduate students can get up to $8,000.
Private Student Loans
Various financial institutions also offer private student loans. While some students have to supplement their federal loans with private ones, there are some drawbacks.
Payments often can’t be deferred with these loans, and they typically have variable interest rates that can be as much as three times that of a federal student loan. They also aren’t subsidized, so students are responsible for all of the interest.
Also, unlike federal loans, private student loans require a credit check. That means people often have to get a cosigner.
Paying for College Is Possible
Many students feel like college is just a pipe dream, but financing is possible. Hispanic students are encouraged to begin with grants and loans in order to get free money. Then they can branch out and try other options.