The cost of attending a private, 4-year institution is well over $30,000 for each school year.1 This does not include books, living expenses, transportation and personal expenses.
With the steep rise in the cost of college, few could afford the price tag on a post-secondary education.
For single mothers on a shoestring budget, higher education may seem like a far-fetched idea.
More often than not, they have little or no money to contribute to college expenses — having an Expected Family Contribution (EFC) of $0.
There are, however, financial aid that make “returning to school” a reality — from grants and scholarships (free money), work-study (earned money) to federal loans (borrowed money).
Total Student Aid by Source and Type (in Billions), 2012-13 2
1 Institutional Aid
Also known as college aid, institutional aid is provided by the individual colleges and universities. Early in the application process, you’re expected to fill out CSS PROFILE form in addition to, or instead of, the FAFSA form.
This process helps colleges calculate the amount you are expected to contribute to your college expenses and determine how much aid will be allocated to you.
Since institutional aid is extremely limited, it is often reserved for students with the most financial need. Students requiring financial aid beyond what is offered by their institution may consider federal student grants, scholarships and “subsidized loans”.
2 Federal Grants
Alternatively, students who demonstrate high financial need are more likely to qualify for a federal grant. This federally-subsidized money does not need to be repaid, making it a more attractive option than a loan.
The most common type of grant for lower income students is known as the Pell Grant — with awards up to $5,920 per year. This aid extends to students who have one or more dependents and earn less than $40,000.
This is the largest need-based student aid program allotted to the country’s neediest students. So you need to prove you can barely afford the cost of “going back to school”.
To apply for a Pell Grant, you must complete the Free Application for Federal Student Aid before the June 30 deadline. Early submission is available as early as October 1.
If federal aid disappoints, scholarships are your next chance at “free money” which are often awarded on the basis of merit and/or financial need. Similar to grants, scholarships are “gifts” that do not have to be repaid.
On the national level, scholarships are the most generous but also the most competitive. At local levels, scholarships are easier to grab given the smaller pool of applicants.
For example, Jeannette Rankin Foundation offers scholarships for women who are at least 35 years of age and in financial need with clear educational goals. The award is $2,000. Deadline is March 1 of every year.
4 Employer Tuition Assistance
If you are currently employed, you may be entitled to receive employer tuition assistance. Though the odds are slim, you may ask your employer’s human resources office about the availability of such tuition assistance.
Up to $5,250 in such assistance is excluded from your income, hence tax-free.3 Included in the package is the reimbursement of tuition fees and expenses for course-related books, supplies and equipment.
As a condition of eligibility, your employer may require you to keep working or agree to work for the company for a set number of years after graduation.
This is a program where students with little or no monetary resources can get part-time work on- and off-campus, up to a certain amount, and have 75% of their wages reimbursed by the federal government.
If you qualify for FWS aid, your salary may start at the prevailing federal minimum wage but may vary with job requirements, skill, and experience levels.
Keep in mind, however, that this option isn’t meant for everyone. Unless you have minimal living expenses and family support to look after your child while you’re working, look for other option!
Federal loans, which are issued directly by the federal government, are more attractive than loans from banks and other private lenders as they offer lower (fixed) interest rates and have more flexible repayment options: you can do deferments and forbearances.
The loan can either be subsidized, which doesn’t require you to pay any interest while you are still in school (as the government pays your interest), or unsubsidized, meaning it does accrue interest while you are still in school but you can defer payment until after graduation.
Filing as an independent student, single mothers are eligible for higher unsubsidized Stafford loan limits — up to an additional $4000 in the first two years.
If your borrowing needs are not met by the federal programs, private lenders offer a variety of supplemental borrowing programs. Eligibility for such loans from private lenders often depends on your credit score.
Unlike federal loans, private loans have a higher maximum borrowing amount. On one hand, this is advantageous in that students have more flexibility in borrowing as much as is needed. However, the freedom to borrow large amounts can lead to financial disaster.
Remember, the less money you borrow, the less you’ll have to pay back after you graduate. So be a responsible borrower and treat it only as an option of last resort.
- U.S. News, Infographic: Paying for College
- Source: Trends in Student Aid 2013 by College Board
- IRS, Publication 970, Tax Benefits for Education