Different Ways to Pay for College

By: Mark Wilson, Yale '16. Director of Curriculum Development and Design

Financing college can take a variety of forms. These forms are highly contingent upon a variety of factors (academic competitiveness, socioeconomic status, whether one is a first generation college student, athletic competitiveness, etc.). The college or university one plans to attend can dramatically impact the cost as well, not only for the obvious price tag differences in tuition, but also for lesser known items such as total endowment (which typically corresponds to more generous need based & need blind financial aid) and internal scholarships (schools with longer histories tend to have more generous internal scholarships which are often funded through former alum). Finally, there are external methods to afford college such as external scholarships (scholarships that aren’t specific to one university, but can be used at any university), federal or private student loans (which must be repaid unless very specific criteria are met), tuition coverage programs such as ROTC (which mandate something in return such as specific years of military service following graduation), or work study programs (in which students obtain on-campus employment to supplement their college costs). This document is meant to provide a comprehensive overview of different methods to finance college, but is not meant to encompass all options. If you have scholarship-specific questions, or questions about particular programs that you feel may be a good fit for you, please ask your Next Step Coach directly. 

1. Need Based & Need Blind Financial Aid. This type of aid is designed to ensure all can afford college, regardless of their financial situation. These programs are school specific, and not all colleges/universities provide need based financial aid. Typically, older schools with large endowments provide more generous need based aid. This aid will not exceed the financial need that is determined by the university. However, traditionally, colleges are exceedingly generous with this sort of aid. The end result is that the total cost of tuition is reduced by the amount supplemented via the need based aid, and the final tuition cost is one that the university determines to be affordable for each family in question. Need-blind aid indicates that a student’s ability to afford college will not impact their chances of acceptance. That means that the decision of whether to accept that particular student is determined without knowing or considering if that student can afford the full ticket price. Typically, the lower one’s family income, the higher the need based aid will be. 
2. Internal Scholarships: These school-specific scholarships can dramatically lower the cost of attendance when students are able to win them. However, these scholarships are school specific. Not all colleges offer internal scholarships. The method to apply for these is unique to the university. Some colleges require additional applications for their internal scholarships, while others consider your general application for admission as sufficient. Additionally, some colleges have dual approaches, with some internal scholarships requiring additional applications and others using only the general application. Students should look into each specific school that they would like to attend for specific internal scholarship details. Internal scholarships often have a short list of requirements that must be met by the student in order to retain the scholarship over the four years, typically contingent upon GPA and behavior within college.
3. External Scholarships: These scholarships are not specific to any singular university, however, stipulations may require students attend preset lists of schools or programs. For instance, many scholarships require students study specific subject areas, and have a list of acceptable majors that the scholarship will fund. External scholarships have the widest range of criteria, and also have the largest breadth of funding. With more than 750,000 external scholarships in the US alone, and more than $1B in annual funding, more research is needed to identify the best scholarships for each student. Common criteria include, but are not limited to location, ethnicity, previous volunteer experience, intended area of study, family and/or socioeconomic status, and academic competitiveness. Typically, applications for these scholarships involve 2-3 essays and a college acceptance letter. Due to the requirement to be accepted to at least one college or university, students tend to apply for these scholarships during the spring of their senior year. However, early applicants who are accepted to colleges in the fall (typically the early decision deadline is 11/1 of senior year) can apply earlier than their peers and, as a result, have higher odds of receiving these scholarships than those applying in the fall. Scholarships range from very small amounts ($500 or less) to full scholarships that fund 100% of tuition, room and board, and other costs such as textbooks. The higher the dollar value, the more competitive the application process.  Local scholarships offer a bit less competition than those that are statewide or nationwide, but typically offer smaller values as well. Students should consider their entire academic profile, inclusive of volunteer experience, family status, and academic competitiveness during the summer before their senior year to begin identifying scholarship opportunities that are well-aligned with their specific profiles. External scholarships often have a short list of requirements that must be met by the student in order to retain the scholarship over the four years, typically contingent upon GPA and behavior within college. 
4. Federal and/or Private Student Loans: While using loans to pay for college is something most students work hard to avoid, loans can be helpful ways to supplement financial aid, and/or scholarships to make affording college possible. Students should exhaust every single option available within need-based aid and internal/external scholarships before resorting to federal or private student loans. Federal loans offer lower interest rates, with higher likelihood of fixed interest rates, than their private counterparts. Federal loans also are far more likely to be eligible for loan forgiveness. Keep in mind that student debt (both private and federal loans) constitute the second largest area of privately held debt in America. Students should weigh the cost and benefit of using loans to fund college. What are their alternative options? Is the college itself going to warrant higher annual income than its more affordable counterparts? Are there ways to accelerate a students college experience to last fewer than 4 total years as a means to reduce the financial burden of college? Students choosing to use federal or private student loans should reconsider their options each year to determine if they’re able to leverage other resources that do NOT require repayment to finance college.
5. ROTC (or other tuition coverage programs): Many colleges have internal programs that are designed to cover part, or all of a student’s tuition in exchange for work or service following college. The most common program is the US ROTC program, which provides tuition for students in exchange for military service after graduation. Students typically begin service immediately following their graduation, often as officers within their respective branch of service. These programs have strict guidelines for eligibility, and retaining eligibility throughout all four years of college is contingent upon academic excellence and success in the program itself, which has specific requirements not defined by the university itself such as physical fitness requirements each student must meet to participate in the program. ROTC programs are offered at more than 1700 colleges and universities in the US, and each branch of the military has its own version of the program.
6. Work Study: While these programs vary widely depending on the university, most colleges in the US offer students the ability to work in on-campus positions in order to supplement their financial needs. These programs typically are widely available for students, and are prioritized for those with demonstrated needs. The experience gained in these roles is not equivalent to paid internships or other jobs and typically are very low in skill requirements. However, the ability to accumulate hours working in very manageable roles can quickly add up in terms of offsetting tuition costs. Additionally, these jobs are usually offered in capacities that do not require off campus travel, which reduce the time commitment and cost of work. Students should carefully consider the opportunity cost of working through a work-study program compared to a traditional job in an off-campus setting, but work study jobs typically offer higher payments and require less commitment.