How to Pay for College | Crash Course | How to College
Summary
TLDRIn this Crash Course: How to College episode, Erica Brozovsky explores the complexities of financing a college education. She explains the distinction between direct and indirect costs, the importance of understanding the total cost of attendance, and the various financial aid options available, including federal grants, work-study programs, scholarships, and loans. The video also touches on employer tuition assistance and the benefits of attending trade schools or community colleges to reduce costs. Erica emphasizes the significance of planning and the potential for military tuition assistance, advising students to consider all financial aid as building blocks towards their educational expenses.
Takeaways
- 💼 Understanding the total cost of attendance, including both direct and indirect costs, is crucial for managing college expenses.
- 🏫 Direct costs are fees paid to the school, such as tuition, building maintenance, and health services, while indirect costs cover everything else like books and transportation.
- 🏛️ Living on campus often comes with additional costs like dormitory and meal plan fees, which are required by most colleges for freshmen and sophomores.
- 🏠 Off-campus living typically requires covering personal living expenses such as housing, food, and utilities, and may include childcare for students with children.
- 💰 Federal financial aid, including grants and work-study programs, is a significant source of funding for college, accessible by completing the FAFSA.
- 📚 Scholarships, both need-based and merit-based, offer financial aid that doesn't need to be repaid and can be earned through a well-rounded application.
- 🏢 Employers may offer tuition assistance or reimbursement programs, which can cover a portion or all of an employee's educational costs.
- 🔗 Parent PLUS Loans are an option for parents to help cover their child's college costs if other financial aid is insufficient.
- 🏦 Private loans, based on credit history, are another funding option but often come with higher interest rates and may require a cosigner.
- 🎓 Attending trade schools or community colleges can be a cost-effective way to start higher education, with potential for quick employment or credit transfer to universities.
- 📈 Planning ahead, understanding financial aid terms, and exploring various funding sources can reduce out-of-pocket expenses and financial stress during college.
Q & A
What is the total cost of attendance and what does it include?
-The total cost of attendance is an estimate for all the expenses a student will have to pay for each academic year, including both direct and indirect costs. Direct costs are expenses paid directly to the school, such as tuition, fees for building maintenance, technology, health services, and potentially dorm and meal plans. Indirect costs include everything else needed to be a student, like books, internet service, software programs, and travel expenses.
Why are direct costs important when considering college expenses?
-Direct costs are important because they are the expenses that appear on your bill from the college and include tuition, fees, and often dormitory and meal plan costs. These are the primary expenses that students must pay before they can attend classes.
What are indirect costs in the context of college expenses?
-Indirect costs are expenses not directly paid to the school, such as books, internet service, software programs, and travel expenses. They also include other living expenses if not living on campus, like housing, food, utilities, and childcare.
How can living on campus affect a student's overall college expenses?
-In most cases, students who live on campus pay less for additional expenses like transportation, entertainment, and personal care compared to students who live off-campus. However, the specifics can vary based on location and whether the school is public, private, or for-profit.
What is federal financial aid and what types of aid does it include?
-Federal financial aid is an umbrella term for several options funded by the US government, including need-based federal grants, federal work-study programs, and federal student loans. These aid options are based on financial need and do not need to be repaid, except for loans.
Why is it necessary to complete a FAFSA to receive federal financial aid?
-Completing the Free Application For Student Aid (FAFSA) is necessary to determine eligibility for federal financial aid, including need-based federal grants and federal work-study programs. It's also the only way to qualify for federal grants and loans.
What are the differences between subsidized and unsubsidized federal student loans?
-With subsidized loans, the federal government pays the interest while the student is in school, which can save money over time. Unsubsidized loans, on the other hand, accrue interest over time, which the borrower is responsible for paying.
How do Parent PLUS Loans assist in paying for college?
-Parent PLUS Loans allow parents to borrow money to help pay for their child's college education. If the financial aid awarded does not cover all costs, parents can apply for this loan option. If they are denied, the student becomes eligible for unsubsidized loans to cover additional expenses.
What are private loans and how do they differ from federal loans?
-Private loans are education loans from banks, credit unions, or other financial institutions. They are based on credit history rather than financial need and often come with higher interest rates than federal loans. They may also require a cosigner.
How can scholarships help reduce the cost of college?
-Scholarships are a type of financial aid that does not need to be repaid and can be based on various criteria such as need, merit, or demographic circumstances. They can significantly reduce the amount a student needs to pay out of pocket for their education.
What is institutional aid and how can students access it?
-Institutional aid is money given directly by the college, either based on merit or need. Students can access it by applying to the college, and some colleges may automatically offer this aid after acceptance.
How do employer tuition assistance programs work and what are the different types?
-Employer tuition assistance programs help employees pay for their education by either reimbursing them after they've earned a passing grade or by paying the school directly. Types include tuition reimbursement programs, direct bill programs, and lump sum programs, which offer a set amount of tax-free funding annually.
What are some alternative educational paths that can reduce college costs?
-Alternative paths include attending trade schools for specific career focus, community colleges for lower costs, earning college credits in high school through AP courses, or taking advantage of programs like ASU's universal learner courses, CLEP, and DANTES.
Outlines
💼 Understanding College Costs and Financial Aid
This paragraph introduces the complexity of funding a college education and emphasizes the importance of understanding the costs involved. It explains the concept of financial aid, distinguishing between free money and loans. The speaker, Erica Brozovsky, presents an overview of the types of expenses students encounter, such as direct costs (tuition, fees, room, and board) and indirect costs (books, internet, software, and transportation). The paragraph also touches on the differences in living expenses for on-campus versus off-campus students and how certain student categories, like adult or returning students, might have different housing requirements. The segment concludes with a discussion on the various forms of financial aid available, including federal aid, grants, work-study programs, and the necessity of completing a FAFSA to access them.
📚 Exploring Financial Aid Options and Employer Assistance
Paragraph 2 delves deeper into the financial aid landscape, discussing scholarships, which are non-repayable forms of financial aid that can be merit-based, need-based, or demographic-based. It also addresses institutional aid, which is direct financial support from colleges, either automatically granted or applied for. The paragraph stresses the importance of considering each aid option as part of a larger financial plan, rather than a single solution. It introduces the concept of employer tuition assistance programs, which can cover or reimburse a portion of educational costs, and highlights the potential for military personnel and their families to receive tuition assistance. The segment also suggests considering alternative educational paths, such as trade schools, community colleges, or earning college credits in high school, to reduce overall college costs.
🎓 Planning for College and Utilizing Study Hall Resources
The final paragraph focuses on the benefits of planning ahead for college expenses to reduce financial stress and enhance the college experience. It promotes the Study Hall program, a partnership between Crash Course and Arizona State University, which offers foundational courses and resources to help students navigate college life and academics. The paragraph encourages viewers to visit the Study Hall channel for additional support in choosing a major, understanding college requirements, and accessing college credit courses that can be challenging in the first two years of university.
Mindmap
Keywords
💡Student Loans
💡Financial Aid
💡Total Cost of Attendance
💡Direct Costs
💡Indirect Costs
💡Federal Financial Aid
💡Scholarships
💡Employer Tuition Assistance
💡Military Tuition Assistance
💡Community Colleges
💡CLEP and DANTES
Highlights
Understanding the costs of attending college is crucial for managing the financial aspect of education.
All schools provide an estimate of total costs, including direct and indirect expenses, on their websites.
Direct costs include tuition, fees, and on-campus living expenses, which are paid directly to the school.
Indirect costs cover items like books, internet, and travel, which are not included in the school bill.
Some schools require underclassmen to live on campus, affecting housing and meal plan costs.
Adult or returning students often have exemptions from on-campus living requirements.
Off-campus living requires covering additional personal living expenses like housing and utilities.
On-campus students generally pay less for transportation and entertainment compared to off-campus students.
Federal financial aid includes need-based grants and federal work-study programs.
Completing the FAFSA is necessary for federal aid eligibility and can lead to other financial opportunities.
Federal student loans offer lower interest rates than private loans and include subsidized and unsubsidized options.
Parent PLUS Loans can help cover college costs not met by other financial aid.
Private loans are an alternative with higher interest rates and may require a cosigner.
Scholarships are financial aid that doesn't need to be repaid and can be based on various criteria.
Institutional aid is provided directly by colleges and can be merit-based or need-based.
Employer tuition assistance programs can cover or reimburse for college costs.
Military tuition assistance and the Post-9/11 GI Bill provide education funding for service members and their families.
Trade schools and community colleges offer more affordable pathways to education and career readiness.
Earning college credits in high school or through programs like CLEP can reduce future college costs.
Planning and understanding financial aid options can alleviate financial stress and enhance the college experience.
Transcripts
You have to take out student loans. All financial aid is free money.
There aren’t many options to pay for college.
If you live in the US or are attending an American school,
you may have heard things like this when it comes to funding your college education,
and it can be hard to know what’s true and what’s not.
Hi, I’m Erica Brozovsky and this is Crash Course: How to College,
a Study Hall series presented in partnership with Arizona State University.
Today? We’re talking money.
[INTRO MUSIC PLAYS]
No matter what kind of school you’re considering,
understanding the costs can make the process of paying for college more manageable.
Fortunately, on their website all schools will have the total cost of attendance,
which is an estimate for all the expenses a student will have to pay for each academic year
including both direct and indirect costs.
Direct costs are all the expenses you pay directly to the school,
like tuition for the credits you need to complete your degree,
which can cover a wide range of things. You'll probably have to pay
building maintenance fees, technology fees, wireless fees, fees for health services–
a lot of schools even charge you to support the athletic program.
And depending on what you choose, your direct costs can
also include your dorm room and meal plan.
Most colleges require you to pay these costs before you can attend classes.
Just remember: if you don't live on campus, you generally don't get a meal plan!
But there are also indirect costs,
which are pretty much everything else you need to be a student,
like books, internet service, and software programs.
Depending on where you live, these can also be travel expenses, like gas,
vehicle maintenance, and parking or public transportation fees.
In case that’s confusing, there’s an easy way to keep track of it all:
direct costs are the things that will appear on your bill from the college,
and indirect costs are everything else!
As we mentioned in earlier episodes,
some schools require freshmen and sophomores to live on campus,
in the dorms, while juniors and seniors have an option of where to live.
If you're an adult, returning student,
you often are given an exemption to living on campus, even if you're an under-classman.
For whatever reason, if you're not living on campus,
you need to be prepared to cover your living expenses.
These will include housing, food, utilities, and, if you have kids, childcare–
although check with your college for help on that last one.
Many offer before and after-school childcare to help parents stay in school.
And to help you make sense of it,
here's a brief overview of how costs compare between living
on and off-campus at different kinds of colleges.
You may be surprised to learn that, in most cases, students who live on campus pay less
for additional expenses like transportation, entertainment, and personal care
than students who live off-campus.
The numbers depend on where you live and whether the school is public, private, or for-profit.
And while these expenses vary based on your own unique situation,
these figures can give you an idea of what to expect.
After all that budgeting and spreadsheeting,
that total cost of attendance can look like a really big number.
But there are so many ways to find financial aid to help pay for college
[-- and none of them are even following every rainbow you see to find a magical pot of gold!]
First off, we can consider federal financial aid, which is kind of an umbrella term
for several different options funded by the US government.
For instance, federal financial aid includes need-based federal grants,
which are awarded based on financial need and don’t need to be repaid.
Federal financial aid can also include federal work study,
which is a government funded part-time job designed
specifically to help both part-time and full-time students pay for school.
While most federal work study jobs are on campus,
some jobs are off-campus at organizations the college partners with.
If you plan to enroll as a distance learner or online student and want to know
whether a federal work study job is an option for you,
check with the college you’re interested in.
To receive a need-based federal grant or be eligible for federal work study,
you have to complete a Free Application For Student Aid,
otherwise known as a FAFSA.
You’ll need to complete the FAFSA for every year that you’re enrolled in school
and want to receive federal financial aid.
Lots of students don’t complete the FAFSA because it requires a lot of information
from you and often your parent or guardian,
but it also opens the door to so many other ways to pay for college…
and is the only way to qualify for federal grants and loans!
For instance, loans are money you borrow to pay for a product or service up front
with the expectation that you will repay the loan at a later date.
And if you complete the FAFSA, you may be eligible for federal student loans
which often come with lower interest rates than private or bank-based loans.
These include subsidized loans, unsubsidized loans, and graduate PLUS loans.
Each one has its own benefits and requirements.
Like with subsidized loans,
the federal government pays your interest while you’re in school,
which can save you money over time.
On the other hand, the interest rate on an unsubsidized loan builds up over time.
Parent PLUS Loans can also help students pay college costs.
Although not required to,
parents can apply for this loan option if the financial aid that has already been awarded
does not cover all your costs.
If they do apply and are denied, you’ll be eligible for unsubsidized loans
to cover additional expenses.
Private loans are also an option for paying for school
and are based on your credit history rather than financial need.
However, it’s important to note that private loans often come with higher interest rates
than federal loans and may require you to have a cosigner.
Some private loans, like those offered by credit unions, are more affordable.
We often hear about student loans and how difficult they can be,
but there is no shame in taking out a loan to pay for college.
And if you stick with us here on Study Hall,
we’ll help you succeed throughout college so you can graduate,
get a job, and hopefully not struggle to pay off those loans.
And in addition to federal financial aid and loans
you can also round out how you’re paying for college with scholarships,
which are another type of financial aid that you don’t have to pay back.
Some scholarships are need-based,
which means the amount for which you are eligible is dependent
on your or your family’s economic status.
Others are merit-based, which means they’re awarded based on your academic achievement.
And there are also scholarships granted
based on socioeconomic or demographic circumstances,
like income-based scholarships or scholarships meant to encourage people
of underrepresented identities to go to college.
Scholarships are amazing opportunities for you to earn money
for school that you don’t have to pay back.
But that also means that you have to plan ahead to earn them
so that you can submit a well-rounded application and stand out from the crowd.
The same is true for institutional aid,
which is any money the college gives you directly
whether that’s merit-based or need-based aid.
You can get institutional aid by applying,
but some colleges automatically offer this type of aid to students
after you get accepted to the college.
And no matter what types of financial aid you end up using,
perhaps one of the most important things to remember about financial aid
is that it’s rare for one aid option to cover everything.
Instead, think of each option as a building block toward your total cost of attendance.
Some options will give you bigger chunks of change
and some will seem like drops in the bucket, but it all adds up.
So as you’re planning for college,
review each option carefully and understand the unique requirements,
limitations, and terms of each one.
And keep in mind that just because you don’t qualify now
doesn’t mean you won’t qualify in the future.
As you review your aid options, don’t forget to check with your employer!
More and more companies, such as Starbucks,
Uber and Chipotle, are offering 100% tuition coverage
for employees, and most companies agree to pay a portion of your school costs
depending on the type of tuition assistance program they offer.
Tuition reimbursement programs require you to pay for the costs upfront,
then your employer will repay you after you’ve earned a passing grade for the course.
And in direct bill programs, your employer will pay the school you attend,
instead of having you pay for the courses first.
But if you don’t earn a passing grade in the course,
your employer may require you to pay them the money back.
Unlike those tuition assistance programs,
a lump sum program offers all the money you are eligible for once each year.
Although the amount of tuition assistance varies,
companies are allowed to offer up to $5,250 in tax-free funding annually.
Some companies choose to offer more,
so it’s important to ask how much tuition assistance is offered each year.
And you should ask whether you’re limited to specific areas of study.
Some companies only offer tuition assistance if your courses relate to the company’s industry.
Like if I worked for a tech company and wanted to take courses,
they might only cover things like cybersecurity, programming, web design, and related topics.
But if I wanted to study something else -- like linguistics! --
I can try to make a case that other courses
will help me do my job better and convince my employer to cover it.
So research the courses you want to take before applying for aid through your company.
And be prepared to explain how each course
relates to your job and how each one can help you contribute to the company.
If you’re under 24 and considered a dependent,
you can also consider asking your parents or guardians to check with their employer.
For instance, Wells Fargo offers tuition reimbursement for employees
and scholarships for the children of employees.
Or if your parent or guardian works for a college or university,
you may qualify for tuition assistance if you attend that school.
And if you or your spouse is employed by the military,
you may qualify for military tuition assistance,
which is available to both active duty service members and veterans.
As a veteran, your dependents—like your spouse or children—
may also receive aid through spouse or dependent assistance. F
or example, the Post-9/11 GI Bill is designed to pay for service members'
education and can be transferred to a qualifying spouse or other dependent.
And each branch of service has different tuition assistance programs,
so we encourage you to check with the appropriate branch for more specific information.
Ultimately, paying for college is about finding money to put toward your education,
but it’s also about reducing the amount of money you need to pay out of pocket,
and what school you go to can be a big part of that.
Trade schools may have higher up-front costs than four-year schools,
but offer a more specific career focus that can lead to gainful employment quickly.
You can often earn a certificate there in one or two years,
and fund your program with federal financial aid, scholarships, or grants.
Community colleges also cost less than state colleges or universities.
Even if you decide to attend a university later, you can attend a community college first
to complete your general education credits at a lower cost.
If you decide to take this path, make sure you understand how the credits you earned
at a community college will transfer to a university.
Most schools have a transfer credit tool on their websites
that you can use to evaluate the number of credits that could transfer.
Earning college credits in high school like through Advanced Placement courses
or taking low-cost college courses like ASU’s universal learner courses
is another way to reduce college costs by earning college credit
before actually starting college.
Also, a major part of this Study Hall Project is
creating videos which are the foundation for college credit courses.
You can start anytime without applying to the university,
pay after you complete the course,
and be able to transfer the credit to most universities. More info is in the description!
You can also look into CLEP, a College-Level Examination Program
that enables you to complete tests in lieu of taking introductory courses,
and DANTES, which supports members of the military in completing exams
to earn high school and college credits.
Planning ahead for college tuition and fees
can help you save more money in the long run and reduce financial stress.
Less stress means more energy to focus on your coursework,
create great memories, and enjoy your college experience.
Thanks for watching this episode of Crash Course How to College.
This series is part of an expanded program called Study Hall.
Crash Course has partnered with Arizona State
University to launch Study Hall on its own channel.
Check out youtube.com/studyhall where you’ll find more tips about navigating college,
choosing a major, plus foundational courses
connected to college credit courses that students struggle
most with in their first 2 years.
We hope to see you over there!
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