Make sure that understanding financial aid and student loans are on your college-readiness checklist.

As you’re thinking about which post-secondary school will be the best fit for you, make sure to consider the cost and how you will pay for it. The cost to attend post-secondary full-time ranges from about $4,000 per year to over $60,000 per year for the most expensive schools. Of course, depending on the school, your tuition payments may not cover rent, utilities, food, and other living expenses.

 

You should compare the cost of schools not just by the tuition that they list on their websites, but also by considering the financial aid for which you may be eligible. Use the College Scorecard, which tells you each school’s average “net price”—the amount students and their families pay or borrow after grants and financial aid are factored in. Some schools that may appear to be too expensive may actually have lower than expected net prices. For example, Harvard College’s 2017 tuition, room, board, and fees is $63,025 per year, but its average annual cost is $17,882. This is because Harvard provides generous financial aid to students whose families have low or moderate incomes.

Most post-secondary students end up borrowing money in the form of student loans. But before you borrow—and in order to borrow as little as possible—you should make sure you exhaust all other potential methods of paying for post-secondary. For example, grants and scholarships provide money that you don’t have to pay back. Apply for federal Pell Grants, state grants, The Pittsburgh Promise scholarship, and other scholarships. Ask your family to contribute; they may be able to get the American opportunity tax credit to offset tuition payments, which could mean up to $2,500 in tax credits or $1,000 in tax refunds per year if they owe no federal income tax.

Apply for Pell Grants and federal student loans using the Free Application for Federal Student Aid (FAFSA). The FAFSA will ask for basic information about you and your family in order to determine which loans you qualify for and whether you qualify for Work-Study jobs. The schools you apply to will also use the FAFSA to decide how much financial aid to offer you. Once you have your acceptances and financial aid offers, visit the Consumer Financial Protection Bureau’s website to compare the offers.

Minimizing the amount you have to borrow to pay for school should be a factor in your school choice. Millions of Americans have defaulted on their student loans, and millions of others have seen their loan balances grow after graduation because of illegal conduct by private student loan servicers. Since student loans generally cannot be discharged in bankruptcy, any student loans you borrow will follow you—and anyone who cosigns your loans—for life. If you have trouble repaying your loans, debt collectors can garnish your wages or take your tax refunds. All that said, the majority of college students graduate with some federal student loans. The important thing to ensure is that you pick a college and a major that help you get a good job and repay your loans.

Learning all that you can about financial aid and loans will help you compare all your options to make an informed decision. Best of luck to all of you and your families as you prepare for your future!