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Controlling Costs and Paying for College

September 15, 2021
An illustration of a person flying a kite made of a dollar bill

One of the first questions families often ask, and should ask about college is, “how are we going to afford it?”

There are typically charges for “Direct Costs” (tuition and general fees, housing, and meals (if a student is living on campus), and there are also “Indirect Costs” (costs for books, supplies, and course fees). The total of all Direct and Indirect costs is called the “Cost of Attendance.” The cost of these items varies depending on the school. If a student is comparing private and public colleges or considering studying in a different state, the expenses will vary. As a matter of fact, the goal of most private colleges is to support your graduation in four years, which in the long run, saves money compared to those schools that require five years or more but have lower initial costs.

Many Ways to Pay

Fortunately, there are many ways to make a college education affordable. Depending on the college, financial assistance may be available to reduce the cost of attending. In order to receive financial assistance, students and families will need to work together to complete the necessary applications. The application process is different for U.S. citizens than for non-U.S. citizens, and it may vary depending on the college.

Types of Financial Aid

Once the application for Financial Assistance is complete, the college will contact the student regarding the types and amounts of aid for which they qualify. Generally, there are three types of financial aid. These types are scholarships, grants, and loans.


Scholarships are funds offered to students that do not have to be repaid and are typically offered based on a student’s academic performance, major of study, talent, or leadership potential. Some scholarships may consider a student’s financial need based on the results of the Free Application for Federal Student Aid (FAFSA), but many are awarded without consideration for financial need. Scholarship eligibility requirements and application processes vary depending on the donor source and the type of the award.


Similar to scholarships, grants refer to aid given to students that does not have to be repaid, provided that the student meets the eligibility criteria. While the terms “grants” and “scholarships” are often used interchangeably, grants typically refer to aid that is given based on a student’s financial need according to the FAFSA. Grants usually cannot be applied for separately and are often awarded automatically when a student applies for financial assistance.


Loans are funds that may be used to fund a student’s academic expenses that must be paid back to a lending institution. All students who file the FAFSA are automatically eligible to receive a limited amount of Federal Direct Student Loans from the Department of Education, regardless of financial need or credit history. All Federal Direct Student Loans offer a fixed rate of interest and no payments are due on the loans until after the student finishes school or ceases to be enrolled at least half time. These loans have two groups, subsidized and unsubsidized. If the loan is subsidized, the loan’s interest is covered by the Education Department while the student is enrolled (at least half-time) in college. The interest on unsubsidized loans begins accruing as soon as the loan is disbursed.

In addition to the Federal Direct Student Loan, parents should consider applying for a Federal Parent PLUS Loan, which also offers a fixed rate of interest and the option to defer payments until after the student finishes college or ceases to be enrolled at least half-time. Parents may apply for any amount up to the cost of attendance, but approval is subject to a credit evaluation. Students whose parents are not approved to receive a PLUS loan may receive an additional amount of Direct Student Loan funding with proof of a Parent PLUS Loan denial.

Students wishing to borrow funds in addition to the Federal Direct Student Loan may apply to private lenders for additional educational loans. These types of loans are referred to as “alternative” loans and often require a student to apply with a creditworthy co-signer. Starting interest rates will vary by lender and are based on the credit evaluation of the co-signer or the primary borrower if a co-signer is not needed. Interest rates for alternative loans can be variable and may change over the life of the loan based on market conditions. Visit elmselect.com to review the alternative loan options that may best meet your family’s needs.


Students, remember you have “skin-in-the-game.” You can bring financial resources to the bottom line. Do you have a summer job? In some circumstances, you may be able to save up to or even over $1,000 in your summer job. Also, consider working on campus. Many schools have multiple, part-time employment opportunities. While some jobs are federally supported like Federal Work Study (FWS), many schools have jobs on campus outside FWS. Sometimes, even a parttime job can help you earn up to $1,500 per semester. Inquire with your college’s Financial Assistance Office for more information.