In the 2015-2016 school year, women represented 11.5 million of the 20.2 million students pursuing a college education at a college or university in the United States.
More and more women are following their dreams to earn a degree, and in today’s job market, having an undergraduate degree is a requirement for most entry-level jobs.
Earning a graduate-level degree is necessary for women who want to climb the corporate ladder or create their own businesses.
While these are inevitable truths for today’s prospective college students, there are challenges inherent to the process of earning a degree. We will talk about these below, as well as the best options for women looking to pay for a college education.
The Cost of Attending College
The cost of attending school to complete a degree program has skyrocketed over the last two decades, with the average cost of an in-state public university coming in at just under $25,000. The price tag for private colleges and universities is even higher, averaging $49,320 per year.
As these tuition expenses continue to rise, the ability to pay out of pocket is an unrealistic goal for most students. Although the opportunity to borrow to fund one’s educational aspirations is almost always a possibility, graduating with a heavy burden of student debt is not a comfortable place to be. That’s why it is important to know what resources are available to make college more affordable from the start.
Setting aside money in advance of attending college is also a sound way to prepare, but it is necessary to know the account types available and limitations on each.
Finally, tapping the federal government of a private lender to help fund college expenses is a useful resource when all other avenues have been explored. Any woman can be more financially prepared to earn a college degree when these simple steps are followed.
Step 1: Scholarships and Grants for Women
Scholarships and grants can make all the difference in paying for college, as these awards do not require repayment. Funding from a scholarship or grant are offered by nonprofit organizations, private donors, community and religious groups, as well as directly from colleges and universities to students who are enrolled or plan to attend an accredited institution of higher education. These awards are given to recipients who are able to show financial need, past academic achievement or community involvement and leadership, or a combination of the two.
Several organizations have created scholarship and grant programs to benefit women students working toward an undergraduate or graduate degree. Scholarship and grant awards vary greatly from funder to funder, as do the requirements for eligibility, making it important for women students to do their research on which opportunities may fit their unique skills, personal traits, religious affiliations, or academic merit. Fortunately, there are a handful of scholarships and grants for women that include minimal qualification criteria – the most being a women student.
Many scholarships and grants require a student to submit the Free Application for Federal Student Aid, more commonly referred to as the FAFSA. This form is intended to streamline the process of qualifying for and receiving financial aid, and it includes a variety of questions about a student’s net worth, income, and family contributions.
Grant funding is based on the information detailed on the FAFSA, and some scholarships based on financial need may look to a student’s FAFSA to determine eligibility. To understand more about the FAFSA and its purpose in making college more affordable for women, visit here.
Awards that fall under the grant category differ slightly from scholarship awards in that they are almost always based on a pressing financial need rather than merit. Grants can be found through associations, the federal government, and community organizations in most cases. However, grant funding may also be available through private or public companies committed to supporting women earning a degree.
Several organizations offers scholarships to encourage and support women attending college. The National Federation of Republican Women, the Lifetime Adoption Foundation, and the American Association of University Women all offer scholarship opportunities to women who have financial need or can show academic merit.
Several universities and colleges understand the importance of having women on campus, and as part of their recruitment efforts, scholarships geared toward the women student population abound.
For example, the Joyce Ivy Foundation provides scholarships to women from the Midwest. These awards are specifically geared toward women participating in summer programs at select colleges and universities.
Northwestern University offers up to a $1,000 scholarship to six women students planning to attend the university in the upcoming years. Similarly, the University of Michigan awards up to 40 women students each year in amounts ranging from $1,000 to $8,000. These are just a few - in reality, there are hundreds of other programs specifically designed to help women pay for college.
Visiting any school’s financial aid website will provide information on what scholarships are available and if there are any awards specifically geared toward women.
Several businesses offer scholarships to women students pursuing a degree in a related field. The Kellogg Company, for instance, offers financial opportunities for high school seniors who are women in varying amounts, based on both academic prowess and financial need.
General Electric also offers up to a $5,000 award for qualified women applicants, in an effort to support women who want to work in the fields of engineering or business.
Women students may also qualify for the Adobe Research Women in Technology scholarship, awarded to individuals who are currently enrolled in a computer science, engineering, or closely related technology major.
Step 2: Using College Savings Accounts
Traditional savings and investment accounts may also be used to save for future college costs.
Traditional Savings Accounts
A savings account for college works like any other savings account – it accrues a small percentage of interest over time, and funds can be used for whatever purpose the account owner deems fit.
An investment account is similar in that funds can be added at any time and in any amount, and invested in line with the account owner’s risk tolerance and overall goal for funding education. Both savings accounts and investment vehicles may have gains over time that are taxable to the account owner.
In addition to scholarships and grants, there are efficient ways to set aside money for future college costs.
The most common method for college savings in advance is what’s known as a 529 plan, named after a section of the IRS tax code. With a contributory 529 plan, parents, grandparents, close family members, or the individual planning to attend college can add funds to an account offered by a sponsored 529 plan custodian.
Most states use mutual fund companies to run and manage 529 plans, and some require an investment advisor to be part of the account creation and management process. Money contributed to a state 529 plan may offer a small upfront tax deduction, up to certain limits, and the funds within the plan grow on a tax-deferred basis.
So long as the balance of the account is withdrawn and used for qualified education expenses, including tuition, room and board, and books, there are no taxes owed on the withdraw or the investment gains. However, money taken from a 529 plan and not used for qualified education costs may incur a tax penalty.
Step 3: Borrowing for Education
When a student is in need of financial assistance above and beyond out-of-pocket savings, scholarships, or grants, student loans may be the only viable option for paying for college expenses.
Unfortunately, all student loans available on the market today include interest, and over time, the accrual of interest charges can make repaying student loans a significant financial burden. Repayment can extend up to 30 years for some borrowers which may lead to putting off contributing to other financial goals.
Both the federal government and private lenders offer student loans to women pursuing undergraduate or graduate degrees with accredited institutions, regardless of major, academic performance, or special skills. However, federal student loans and private student loans have many differences.
Federal Student Loans
Federal student loans are distributed through the Department of Education and subsequently serviced by one of several student loan companies.
Individuals who take on federal student debt to help pay for their college expenses are required to repay the full amount borrowed, plus interest that accrues over time. The amount of federal student loan funding available to women students is dependent on information collected in the FAFSA. Federal student loans have a fixed interest rate for the life of the loan.
There are many different repayment programs available for students after graduation, including options that base the monthly payment on discretionary income earned. Some federal student loan borrowers may be eligible for forgiveness of their loan balances after making several years of on-time payments, which helps to reduce the financial burden of borrowing to earn a degree.
Private Student Loans
Private student loans are offered by private lenders, and unlike federal loans, they are based on qualification criteria like credit history, credit score, and verifiable income.
Many private student loan lenders offer both fixed and variable interest rate loans, long and short-term repayment plans, and co-signer availability when the student does not have a strong credit history.
Private student loans do not offer income-based repayment programs, nor do they allow loan forgiveness. For most women students, private student loans should be used when all other resources are depleted.
College is an exciting time for any young woman. For most, it is the first time venturing out of the houses they grew up in for an extended period of time. Unfortunately, college is expensive, and these costs can cause a lot of stress on students and their families.
Luckily for women, 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 a woman 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.