Financial Aid Introduction

In this topic, you'll learn:

• Why college may be a great investment, even though it has an increasingly high cost.
• There are more options today for repaying student loan debt than at any time in the past.
• Why attending college is not without financial risks.

Whether you earn a certificate from a community college or a medical degree from an Ivy League university, higher education may be a great investment in your future.

Attending college doesn’t guarantee that all your dreams will come true, but earning a degree does put your life on a path that’s much more likely to result in greater economic opportunity.

Think about it - when you apply for any job, an employer generally asks about the level of education you completed. In today’s competitive job market, the more education you have, the better.

Sure, there are examples of very wealthy people who never went to college or who dropped out after inventing the latest and greatest gadget. But those stories are few and far between. A college degree helps to increase your chances of being successful. And increasing your earning potential is just part of the story – research suggests correlations between college education and certain positive life outcomes, though many factors contribute to these results.

Getting Ahead Takes Planning

The days when someone could graduate from high school, get a job in the mailroom, and work their way up to being CEO are pretty much gone. In 1972, three out of four jobs were open to those with a high school diploma or less. Today, only one in three jobs are open to those with a high school diploma or less. And over the coming decades, many of those jobs will likely disappear as the result of new technology.

College can be expensive. For many families, it is one of the largest investments they will make.

Is it worth it? It depends. A degree can open doors and increase earning potential for some people, but the value varies based on factors like your field of study, the school you choose, the total cost, and how much you borrow.

It is also true that the cost of earning a degree has generally risen compared with past generations. You may have seen news stories about graduates with very large student loan balances and difficult repayment situations. Those cases do happen, but they do not reflect everyone’s experience. Many borrowers have more manageable loan amounts, and there are repayment options that can help depending on your situation.

However, the important question is not how much it costs but how much you'll actually be paying out of your own pocket. Keep in mind that three-quarters of students attending college receive some financial aid. And no, not all financial aid is in the form of a loan. Billions of dollars, yes billions with a "B," are outright grants that don't need to be repaid.

If you do need to borrow for college, there are more options today for repaying student loan debt than at any time in the past. Nevertheless, you still need to make smart decisions when deciding how to pay for college. It is possible to take on an unrealistic amount of debt for your chosen career, for example. It's also possible to take on college debt and not graduate - a truly worst case scenario.

In this section, we’ll take a look at how paying for college really works – from the financial aid process to student loan repayment options. It’s easy to be intimidated by the published tuition of some schools, especially four-year schools, so we’ll also dispel some myths about the true cost of college. For example, the average student almost always pays significantly less than the published tuition at four-year schools.

Let's get started!