Wed, Nov 13, 2024 11:30 AM

Many families assume Federal Direct Student Loans will cover the full cost of college, but that’s not always the case. Federal student loans have borrowing limits, with first-year students capped at $5,500 and slightly more for upperclassmen. These limits rarely match the full cost of tuition, especially at private or out-of-state colleges.

In addition to tuition, college comes with a range of other expenses—room and board, textbooks, transportation, and personal costs—that student loans may not cover. These costs add up quickly, often creating a financial gap for families. To complicate things, the amount colleges expect families to pay for each of their children to go to college, now known as your Student Aid Index (SAI) often leaves families with more out-of-pocket costs than anticipated, as federal aid formulas rarely reflect the actual amount families can afford. Some private colleges still refer to this amount as your Expected Family Contribution (EFC).

When Federal Direct Student Loans don’t cover the remaining costs, some families resort to taking out private loans. However, these often come with higher interest rates and require a cosigner, increasing financial strain on a family.

Fortunately, there are other ways to reduce costs. Students can take Advanced Placement (AP), International Baccalaureate (IB) or CLEP exams to earn college credit while in high school. Scholarships, grants, work-study programs, and even starting at a Community College and then transferring to a 4-year university can also help to ease this burden and keep a family from accumulating a ton of college debt.

Planning ahead and integrating different strategies can make college more affordable. At College and Beyond, we help families navigate these options and support students in making the right college decisions.

Need help with the College Admissions Process, Finding Scholarships, or with Financial Aid?

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