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Taking Responsibility for Your College Finances, Part III

Money Jar

Continued from Taking Responsibility for Your College Finances Part II

Determining your financial options

The Goal
College is a means to an end, but not an end in itself. If you don’t have an end goal for what you hope to accomplish by going to college, you probably should work that out before going any further here. (And no, “because all my friends are going” really isn’t a good reason.) But when you have decided why and where to go to school, you will need a good financial plan. Do you want no more than $25,000 in loans? Do you want everything paid for by scholarships? Do you want to work only ten hours weekly while you’re in school or are you planning on working as much as possible? Do you want to graduate in four years without sitting out at all? Don’t be afraid to put down the unimaginable—do you want to graduate debt free? (Well, who doesn’t, right?) So what are you going to have to do to reach your goal?

As a student, you have four main options for funding your schooling: Savings, Work, Scholarships and Grants, and Loans.

It’s never too late to start. Every penny that you can get into your savings account and keep there is one that you will have later when you most need it. And don’t think that “saving” is setting aside a large amount from every pay check—it can be something as small as not buying that new music album you want and putting the money into your savings account instead. “Saving” is simply making wise choices about how, when, and where to expend your resources.

Check to see if the college you’re attending has a work program. While working on campus may not pay as much as a job elsewhere, it saves you the need for and cost of transportation. Sometimes colleges also offer scholarships for students who work a certain amount of hours throughout the school year. And if you’re concerned about your ability to do well in your studies while carrying a job, maybe start out with just a few hours a week—say five or ten—and move up from there. You don’t want to over-commit your schedule to work before you know how much time you’ll need to put into your classes.

Tip—When you graduate from college with your shiny new degree, you are most likely still going to be filling out job applications like everyone else. And those applications are going to have some very important blanks on them asking for your work experience and personal references. What work experience are you going to be able to offer if you’ve never held a job? Campus is a great place to get some of the experience you need, in an environment that understands the demands of your school schedule. Employers want to see that you communicate well, are a strong team player, have integrity, and a good work ethic—all things that you can develop in any employment position and use in any career.

Scholarships and Grants
Scholarships offer funding that you don’t have to repay. The problem is that applying for scholarships is no easy task and winning them is even harder; criteria can range from your GPA in high school to your field of study or your essay writing ability. The basic rule of thumb for scholarships is that you’ll get approximately 10% of what you apply for. That means, for example, that if you need $30,000 in scholarships to cover your schooling, you’ll have to apply for roughly $300,000 worth.

Grants are similar to scholarships in that you don’t have to repay them, but unlike scholarships, they are based mainly on “demonstrated financial need.” Grants can come from the state or the college itself but are most often available from the government. If you haven’t yet filled out a Free Application for Federal Student Aid (FAFSA), hop to it. It’s the door to any Federal funding, be it grant or loan.
There’s enough support and funding for higher education available that you can entirely fund your college years, but it takes much time and effort on your part. If you’re serious, you may be spending at least 20 hours a week just on finding and filling out applications alone. That’s practically a part-time job! But if you consider the return on your time investment, it’s far better pay than you would typically make at an after-school job.

Tip—Search the website of the college you’re attending for financial aid or call the college’s financial office for more information. The knowledgeable staff there will have an inside track on the scholarships the college offers or receives for its students through supporters. They will also be the best ones to direct you to specific state scholarships.

Looking online for scholarships can yield fast results but has some dangers that you avoid when using the scholarship guides in the reference section of your local library—if the scholarships made it into the guide, then you can be fairly certain that they’re trustworthy. Two great sites on which to start your search are and Just remember to always read the fine print before giving out your personal information. And above all, avoid scholarship websites that ask for your personal banking information or require a small payment to get into the database. Anyone who asks you to pay to gain access to a scholarship is trying to scam you.

A loan is simply money borrowed on the promise to repay it later with extra (interest). Borrowing is a huge responsibility and creates a burden that can potentially hamper your future ministry until it’s paid off. But if you’ve exhausted all your other options and believe this is how the Lord is providing for you, take the first step by learning all you can before signing on the dotted line.

There are two kinds of loans—private and federal. The lump sum you borrow is called the principal and all loans accrue interest on top of that. Whether or not you have to pay that interest while you’re in college depends on the kind of loan you get. While you are enrolled in school at least half time, your loan company will usually give you the option of making payments on just the interest or of “deferring” the interest until you graduate—meaning that you don’t have to pay now, but in the meantime the amount will keep growing and being added onto the principal.

Federal loans often have better interest rates and repayment options as well as another option for interest. Depending on your FAFSA score, your federal loan may be “subsidized”; that means that although your loan is still accruing interest, the government is paying the interest until you get out of school. Unfortunately, you can borrow only up to a certain amount in federal loans (subsidized and unsubsidized) for every academic year, so keep that in mind while you’re getting your finances together. You may need to take out more than one loan for the school year, but that should be your last resort.

Tip—A good rule of thumb is not to borrow more than you would make in the first year of your projected career.

Warning! One of the most frequent mistakes college students make is in failing to keep track of how much they borrow. Keep all your loan documents and notifications in one place. Perhaps even set up an email address specific to your loan accounts. And get into the habit of frequently checking on your loans for any changes in interest rates or terms. You never want to be caught unawares by any changes made to a loan that has your name on it.

Kevin Delp, Assistant Director at the Financial Aid office of Bob Jones University, also offered these helpful tips for making the most of your money in college.

  1. Seek the Lord’s will in everything you do and then count the cost. Christ said in Luke 14:28–30 , “For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? Lest haply, after he hath laid the foundation, and is not able to finish it, all that behold it begin to mock him, Saying, This man began to build, and was not able to finish.” Counting the cost doesn’t mean you aren’t actively trusting God to provide for your needs. Christ was speaking here of counting the cost of following Him and similar care should be taken with all major life decisions.
  2. While you’re still living at home—either while you’re still in high school or on your summer vacations—consider taking some of your core classes online from the university you’ll be attending. Taking correspondence and summer classes can help cut down on your college costs long term if you’re able to shave an entire semester off your four years.
  3. Eat in the dining hall, especially if you’ve already paid for meals with your Room and Board. Don’t pay even more for your food by going out to eat.
  4. Remember that every decision is a financial decision, even when it may not look like it. Have your friends invited you to hang out at a local coffee shop? Going with them means you’ll be buying a coffee to pay for your time there. Absolutely love your smart phone? How much would you save every month if you weren’t paying for extra data? Instant gratification almost always equals debt in some way, so keep the long term costs in mind and make wise decisions. Every choice to spend money now is equally a choice not to have that money for something else later.

    Tip—“Don’t spend money you don’t have on weight you don’t want.” Paying over-priced vending machine charges for sugary, high-carbohydrate snacks will only add up in all the bad ways—contributing to your “Freshman Fifteen” and your school bill. Instead, plan ahead by keeping a small stash ready that will satisfy your craving and help your brain in such “emergencies.”

  5. Don’t use your credit card. Just don’t.
  6. Keep track! Little things add up, so always keep a running tally of how much you’ve charged to your student account, how much you’ve borrowed in loans, and any other charges that you may have.
  7. Be a good steward of everything—time, money, energy—the Lord gives you.

College is a big first step toward independent adulthood. How you steward your time and money will determine how well that journey begins.

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