Financial Wellness Series: Paying for College
College is a major milestone, but it also comes with a hefty price tag. Whether you’re heading to campus or commuting from home, budgeting now means fewer money meltdowns later, and maybe not having to eat ramen for dinner every night.
How to Set a Budget for College
Before you decide on where to pursue higher education, you should know the total cost, including those late-night meal runs and rides shares.
Here’s what to factor into your college budget:
Tuition and Fees
This is the biggest chunk and varies widely depending on the school and your residency status.
Room and Board
Whether you’re living on-campus, off-campus, or at home, housing and food add up fast.
Books and Supplies
Textbooks alone can cost hundreds per semester.
Transportation
Commuting, gas, parking, or public transit passes should be included in your budget.
Personal expenses
Think laundry, entertainment, clothes, phone bills, takeout, and more.
Extracurricular activities
Thinking of joining Greek life? These organizations typically involve fees each semester.
Pro tip: Add a buffer of at least 10% for unexpected expenses. There’s always something; like a surprise lab fee or replacing a broken laptop.
If you have a list of colleges in mind, you can start planning your budget by calculating the school’s actual net price. Net price is the amount that a student pays to attend an institution in a single academic year after subtracting scholarships and grants the student receives.
How to Fund College
Once you know the numbers for college, the next step is figuring out how to pay for it. You may end up using a mix of sources, relying on financial aid completely, or paying for it one semester at a time all on your own. The sources you use depend on your personal financial circumstances. Need help understanding the basics of personal finances? Read this blog to get started.
Scholarships
Scholarships are essentially free money. They don’t need to be repaid and are awarded based on things like academic performance, sports, community service, or unique personal traits. Don’t be afraid to apply for as many scholarships as you can. Some of the other ways you can find them are through your high school counselors or local organizations, researching them online, and college financial aid offices.
Redstone Federal Credit Union offers scholarships for students attending its partner schools. Click here to learn more.
FAFSA and Federal Aid
Filling out the Free Application for Federal Student Aid (FAFSA) is your entry point to need-based grants, federal loans, and work-study programs. Your eligibility is based on your family’s income and assets.
Through the FAFSA, you can access:
- Grants – Like the Pell Grant, which doesn’t need to be repaid.
- Subsidized loans – The government pays the interest while you’re in school.
- Unsubsidized loans – You’re responsible for interest from the start.
- Work-study – Part-time campus jobs that help you earn money during the school year.
Pro tip: Make sure to complete your FAFSA as early as possible each year. Some funds are limited and awarded on a first-come, first-served basis. A completed FAFSA can also be a requirement of many scholarships and other financial aid.
Private Loans and Other Aid
If there is still a gap after scholarships and federal aid, you may consider:
- Private student loans
- Parent PLUS loans
- Payment plans offered by colleges
- Part-time job
It is important to note that private loans can have higher interest rates, so utilize scholarships and grants over loans.
How to Manage Your Finances During College
Once you’re enrolled, the financial learning doesn’t stop. College is a great time to build healthy money habits that last beyond graduation.
Track Spending
Use free budgeting apps like Mint or your Redstone mobile banking app to keep tabs on your money. Review your bank statements regularly so you know where your money is going and where you can cut back.
Find a Flexible Job
Work-study programs or part-time jobs help you earn money without sacrificing too much study time. Side hustles like reselling vintage on Depop or editing TikTok videos for creators can help you cover your weekend activities and build your resume.
Avoid Unnecessary Debt
Sometimes debt is inevitable, but our blog about Personal Finances has some great tips about avoiding or reducing it. Prepare now with a secured credit card in the event you need some emergency cash later so you don’t get caught with a high-rate or -fee loan.
Use Student Discounts
Need music to study or focus? Spotify Premium Student is available for $5.99/ month and includes access to Hulu (with ads) plan. There are countless other student discounts available just like that. Always ask, “Do you have a student discount?”
Final Thoughts
Paying for college doesn’t have to mean decades of debt. With a solid budget, smart funding strategies, and good financial habits, you can navigate college costs without feeling overwhelmed. Remember, financial wellness in college isn’t about being perfect; it’s about being intentional. The earlier you start, the fewer “I’m broke-broke” texts you’ll be sending later. Redstone has saving strategies for every step of the way. Click here to learn more.
Next month in our Financial Wellness Series: Side Hustles that Actually Pay
Return to our Financial Wellness webpage to learn and discover more on your own through our partnerships with Zogo and BALANCE.
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RFCU does not offer tax advice. See your tax advisor for your specific questions