How Outside Scholarships Can Earn You a Debt-Free College Degree: Guest Blog by Dave Peterson
One of the most overlooked parts of the college planning process is assessing a family’s financial resources to pay for their kid’s college education. Every year, I receive tons of emails from desperate students and parents asking for my last-minute assistance in finding a way to pay for their dream college. How do these people end up in this situation?
Outside College Scholarships Can Make Up for Low Merit Aid
First, many people have unrealistic expectations about the amount of merit aid they expect to earn from the colleges they apply to. In my recent article, “Unrealistic Merit Aid Expectations,” I share the story of a class valedictorian with a perfect ACT score, and a number of stand-out extracurriculars on his resume, who got ZERO in merit aid offers from his dream college, and only $3000 in merit aid from his in-state flagship university. To give a broader data point, last year, the University of Florida admitted roughly 15,000 students. However, they only awarded merit aid to 172 students (about 1% of admitted students), and the average award was only $3666. The fact is that no matter how high achieving your student may be, you cannot rely on merit aid from the colleges your student applies to.
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Outside College Scholarships Can Supplement HaRd-To-Get Student Loans and Need-Based Aid
Secondly, many people have unrealistic expectations about need-based financial aid and student loans. The vast majority of colleges in the country use the Free Application for Federal Student Aid (FAFSA) to determine a student’s “financial need.” During the student’s senior year in high school, the student and parents fill out the FAFSA, providing information on the family’s income and assets. FAFSA then calculates a number, based on the family’s financial situation, called the Student Aid Index (SAI). The SAI is what the government, and by extension, most colleges, say a family is able to pay for their student’s college education. Most people are shocked by their SAI. One family I worked with, whose household income was under $100,000/year and who had virtually no assets, was told they should expect to pay about $25,000/year for their child’s college education.
I won’t use this article to dissuade you from taking out student loans. For our family, we took debt off the table when it came to our son’s college education. But, if you are OK with your student graduating (or even worse, not graduating) with thousands of dollars in student loans, I still want to offer a word of caution. Student loans are not guaranteed. Many families find that the only student loan they qualify for is a $5500 loan through FAFSA. Students have difficulty getting more in student loans, as they have little to no credit history. Parents with less-than-perfect credit scores are often denied student loans for their kids. When they do qualify, they frequently find interest rates of 14% to 16%. So, relying on student loans is not a sound financial strategy, either.
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Outside College Scholarships Can Yield Beaucoup Bucks!
So, what other options are available to students and families? One of the most overlooked funding sources for college is private scholarships. These scholarships come not from the colleges or the government but from businesses and philanthropic organizations. There are tens of thousands of private scholarships available in the United States. Yet only a tiny portion of students bother applying for them. My son earned more than 20 private scholarships, allowing him to graduate from college debt-free and costing our family only $1500 for his entire college experience! One of my Class of 2024 client students earned more than $111,000 in private scholarships during his senior year in high school. Thanks to those scholarships, along with a financially savvy approach to college by starting at community college and transferring to a four-year school for his engineering degree, this student will pay nothing for college! And one of his private scholarships even offered him an internship!
Some readers may object, “But private scholarships aren’t guaranteed!” To that, I say, ‘You’re right.” But, as we have seen above, merit aid from your dream (or backup) college is not guaranteed. Need-based aid is not guaranteed. Even getting student loans is not guaranteed. So, with no source of college funding guaranteed, it’s imperative that students and families at least give themselves a shot at earning private scholarships. That is why I developed my course, Scholarship GPS, where I share the tools, tactics, and strategies I used to coach my son to a debt-free degree and have helped numerous other families succeed with scholarships. To learn more and to watch the first four lessons for free, click this link.
About the author: Dave Peterson is the creator of Scholarship GPS, an online course where he shares his knowledge about finding and earning scholarships. He also provides one-on-one scholarship coaching and has a podcast and blog where he shares the latest scholarship and college prep news. To learn more about Dave and the amazing Scholarship GPS offerings, visit his website. And don’t miss his upcoming webinar with Dr P, “Graduate With a Debt-Free College Degree.”