Speaker 1: 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 U.S. 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 Erika Brzozowski 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 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 a 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 their 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 anything 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 the 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 underclassman. 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, child care. Although, check with your college for help on that last one. Many offer before and after school child care 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. First off, let's consider federal financial aid, which is kind of an umbrella term for several different options funded by the U.S. government. For instance, federal financial aid includes need-based federal grants, which are awarded based on a 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 needs-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'll 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 costs. 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's 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 needs-based, which means the amount for which you are eligible is dependent on you 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 that college gives you directly, whether that's merit-based or needs-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 a bigger chunk 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 up front. 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. For example, 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 assistants. For example, the Post-911 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 upfront 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 earn 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. 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 slash study hall where you'll find more tips about navigating college, choosing a major, plus foundational courses connected to college credit courses that students struggle with most in their first two years. We hope to see you over there.