According to updated figures from College Board, average tuition and fees for the 2022-2023 school year worked out to $10,950 for public, four-year schools nationwide. Meanwhile, tuition and fees at private four-year schools worked out to $39,400 per year. With these numbers in mind, it’s not surprising that some students run out of money in between academic years or even during the year.
Sometimes you think you have the aid and funding lined up ahead of time, yet it’s not uncommon to run across surprise expenses that knock you off track, especially during uncertain times. According to a recent College Ave Student Loans survey conducted by Barnes & Noble College Insights, 6 out of 10 parents of college students said that the pandemic has negatively affected their family’s finances. And, combine that with record-high unemployment right now, it’s also possible the money you thought you would be making right now just isn’t there.
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But your child still needs to start (or finish) school, so what do you do if your family is short $10,000 or more? Fortunately, there are some ways to get funding. Here are some of your best options:
Look for Gig Work
Due to the economic impact of COVID-19, a record number of Americans have filed for unemployment so far this year. This may make it difficult for anyone, especially a college student, to get a part-time or a full-time job. However, almost anyone can find some work in the gig economy.
What might this look like? You or your child could consider gigs like:
- Delivering food for DoorDash or GrubHub
- Completing tasks nearby using TaskRabbit.com
- Delivering groceries through apps like Instacart and Shipt
- Marketing your skills online using a website like Upwork.com or Fiverr.com
The list goes on and on. You should try to find work that’s flexible and able to fit around your lifestyle or your child’s college coursework. If you have the potential to earn a lot more than minimum wage, that’s also a major plus and a factor that can help you come up with $10,000 in a hurry.
According to an analysis conducted by Rideshare Guy, the average pay for Uber drivers is in the $15 to $20 per hour range. Meanwhile, GlassDoor shows that Instacart shoppers make an average rate of $17 per hour.
Reassess Your Financial Aid
Another strategy involves federal student loans, which your child can apply for by filling out the Free Application for Federal Student Aid (FAFSA). Federal loans come with fixed interest rates and flexible repayment terms, and your student can qualify for most types of federal loans without a credit check. Federal student loans do have an annual limit. For example, a first-year undergraduate can only borrow up to $5,500 but combined with other strategies can help cover the gap.
If you’re ineligible for subsidized student loans, your child may still be eligible for unsubsidized options. Federal loans are typically the first place to start anyway since they come with protections like deferment, forbearance, and income-driven repayment plans.
Also check for other financial aid you may be able to qualify for, such as last-minute scholarships or even tuition payment plans. It’s even possible you may qualify for a work-study program you don’t even know about, but you’ll never know unless you visit your school’s financial aid office or call in to inquire.
Compare Student Loans from Private Lenders
With that being said, sometimes it’s easier (and cheaper) to borrow money for college with a private lender. Interest rates can be lower if you have good or excellent credit, and private student loans also come with flexible repayment plans. They can also be helpful if you can’t cover the full cost of federal student loans.
As an example, College Ave Student Loans offers undergraduate student loans with low variable and fixed interest rates. The loan can be repaid over 5, 8, 10, or 15 years[1] and a variety of repayment options so your student can find a monthly payment amount they feel confident they can commit to.
With such low rates, repaying private student loans may not end up feeling like such an uphill battle. If your family needs to borrow $10,000 to cover tuition and you can qualify for the best-fixed rates from College Ave (currently 4.74% APR)[2], for example, you could pay just $105.37 per month for ten years before becoming debt-free. If you wanted to pay your loan off over five years, you would only need to pay $190.01 per month.
If you’re curious about how much the student loan payment might be depending on how much you need to borrow, this student loan calculator can help.
Revisit Your Budget
It’s also possible you need to reassess your budget to find some money to move around. Since housing is a big monthly expense, that’s a good place to start. Is it possible for you to move in with your parents or another family member while you finish school? Could you become an RA and get the cost of lodging covered for free? Could you get a roommate that can help cover part of your rent?
Other ways to save money can include renting or borrowing textbooks instead of buying them, dining out less often, and trying to find new ways to hang out with friends for free. Instead of weekends spent out on the town, maybe you could talk your college buddies into staying in a little more often.
All of the steps you can take to save money will add up over time, helping you afford college bills without having to borrow more.
The Bottom Line
Running into a funding gap to pay for college is not uncommon for many families. You do have some strategies you can use to cover the costs of school.
Here’s my advice: I would try to earn some money on the side with a gig of some kind, but I would also consider student loans. That way, you could use the money from the loans to fund your child’s college education for sure, but you could pay off your loan faster with the money you or your child are earning all along. Even payments as little as $25 a month can reduce the total cost of the loan, saving your family money.
No matter what you do, try not to get discouraged. Instead, strive to be proactive and focus on what you can do to cover tuition and get your child through school. Chances are good that, no matter what, the investment you’ve made in your child’s education will be worth it.
[1] This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement, and an 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
[2] The information advertised is valid as of 09/19/2023. Variable interest rates may increase after consummation. The lowest advertised rates require the selection of full principal and interest payments with the shortest available loan term.
