RSC - Blog-148

When you ask people about financial aid, what’s the first thing they say?

“Scholarships.”

When you ask them how they’re going to pay for college, what do they say?

“Student loans.”

Neither of these are good answers, but they are a tribute to how well those industries have done in promoting themselves. They’ve convinced students to pay for college the hard way. Unfortunately, the government has not done as good a job promoting grants.

Grants vs. Scholarships and Student Loans

· Only 6% of college students receive a scholarship. Only 0.3% of those pay for everything.

· 65% of college students take out loans.

· 35% of college students take out Stafford Loans. 70% of them have both subsidized and unsubsidized loans.

· 8.8% of borrowers default on student loans, but 63% stop making payments at some point.

When it comes to Pell Grants

· 46% of families receive Pell Grants.

· They cover – on average -- 34% of college expenses.

· Pell Grant amounts are tied to inflation. If inflation goes up, students receive more grant money.

Unfortunately, it’s not all good news when it comes to Pell Grants. They cover only half of what they used to in the 1970's and poor families are far less likely to be aware of them. According to FinAid.org, 70% of families making less than $28,000 didn’t even know Pell Grants existed. The students most in need of the money are the ones not receiving it.

The Good News on Grants

The good news is that colleges don’t subtract grant money from other need-based financial aid they give you (unlike scholarships) and you don’t have to pay them back. They are a major part of avoiding student loans. Other steps to avoid student loans include::

Savings. The government expects students to use 20% of their savings to pay for college, but the more you have in the bank, the less you’ll have to take out in student loans.

Gift Aid. Gift aid comes from the federal and state governments, as well as colleges and outside organizations. It can be need-based or merit-based. Typically the first three are not deducted from other financial aid the college is planning to give you, but that last one – outside aid – can be. Find colleges that put your gift aid toward your education and not someone else’s. (RSC’s college research tools can help you with this).

Work-Study. Sign up, even if it’s only a few hundred dollars a semester. You may have to earn it, but you don’t have to pay it back!

Grant money isn’t as sexy as scholarships or loans. You don’t win anything, and you don’t have the heroic tale of paying it off by the sweat of your brow. You don’t overcome a hardship, but your hardships are what make you eligible.

So maximize your grant money by showing need and being the best student possible. RSC’s program can help you with both – which is way better than paying for college the hard way

For a list of everything we offer, visit our Comparison Chart and see how we stack up against the competition.

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