Tuition and Financial Challenges
Tuition costs can feel like a financial nightmare for many parents. Almost every student faces the challenge of how to afford college at some point. Scholarships are the best way to cover costs. They exist for both high school graduates and returning students. But what happens if a student doesn’t get a scholarship or if it doesn’t cover the full tuition?
In that case, many middle- and low-income families turn to student loans. These loans can include bank loans, Stafford loans, Pell grants, Perkins loans, and more. Choosing the right loan can be overwhelming, especially for families with low income or low credit ratings.
Tools to Help Plan Your Student Loans
If you or someone you know is considering a student loan, two tools can help: the FAFSA form and Human Capital Score.
1. Human Capital Score
Human Capital Score was recently featured in a Wall Street Journal article on college degrees and post-grad earnings. The site offers a free calculator that estimates how much a student may earn after graduation.
This information helps you determine how much to borrow. Many experts suggest that total student loans shouldn’t exceed a graduate’s first-year income. Using Human Capital Score is simple: input the student’s test scores, schools attended, grades, and major or vocational training.
2. FAFSA Form
The Free Application for Federal Student Aid (FAFSA) ensures eligible students can access federal financial aid for college or vocational training. It covers high school graduates or individuals with a GED.
In the past, FAFSA has been complicated, asking up to 157 questions. Many students and families gave up before submitting it. However, changes are coming.
According to a New York Times article, the new FAFSA form (releasing next month) will cut about 20% of the questions, mainly by removing redundancies. For example:
Students who are at least 24 or married can skip 11 questions about their parents’ finances.
Low-income students can skip questions about assets that do not affect aid eligibility.
Further changes may benefit a small group of applicants with disabilities or special circumstances. Check the updated form to see if it applies to your situation.
Don’t Let Tuition Be Overwhelming
Tuition doesn’t have to be a crushing burden. Scholarships and loans are not your only options. By using tools like Human Capital Score and FAFSA, you can make informed decisions and reduce the amount of debt you or your child take on. Knowing your options is the first step toward financial peace in education.
