Higher education is critical to success in the jobs market, but more and more often students are graduating with a mountain of debt and finding that starting wages barely cover the cost of living, let alone loan repayment.
According to the Project on Student Loan Debt, the average student graduates with over $25,000 in student loans.
That kind of debt load in a tight jobs market starts to feel like a really raw deal and may discourage people from pursing a degree at all. But don’t give up hope.
Savvy students will find that there are ways to significantly reduce the cost of higher education by taking advantage of certain government programs that recognize financial need or trade education for service of some kind. Stick with us to find one that works for you.
You have likely heard of the G.I. Bill, originally formulated in 1944 to help soldiers returning from World War II.
Since then, it has been greatly expanded and is now actually two different G.I. Bills plus many other programs to help veterans and their families attend school.
We are going to explain the basics of the top programs, but check out the U.S. Department of Veterans Affairs to dig deeper into this complex topic.
1. The Montgomery G.I. Bill
Under this “original” form of the G.I. Bill, veterans pay their own tuition, living expenses, and course material fees out of pocket.
They are later reimbursed by the government for up to $1,473 per month as a full time student. This bill covers up to 36 months of schooling.
2. The Post-9/11 G.I. Bill
This program instead has the government pay tuition and other expenses directly to your school.
You will also receive a monthly housing allowance based on your zip code, and up to $1,000 per year to cover the cost of books. This bill covers 12 months of education, and can be stacked upon the Montgomery G.I. Bill.
3. National Call to Service Program
This program offers a couple of different incentives, either a one-time cash payment of $5,000 or repayment of existing student loans up to $18,000.
To be eligible, you must serve in the Armed Forces for 15 months, followed by either an additional non-specified period of active duty – the length is determined by the Secretary of Defense – or else 24 more months in the Selected Reserve.
4. Survivors & Dependents Assistance (DEA)
The DEA helps the spouses and children of deceased or disabled veterans pay for up to 45 months of education.
The Fry Scholarship is available for children and spouses of service members who died in the line of duty after September 10, 2001, while the broader DEA is for eligible dependents of living veterans who are permanently and totally disabled due to a service-related condition, or of veterans who died on active duty or as a result of a service-related condition.
You may be eligible for both but must choose one or the other to pursue.
Other Service Organizations
5. National Health Service Corps
New doctors who aren’t in a rush to start making a ton of money can join the National Health Service Corps.
In exchange for working two years full time, or four years part time, in underserved areas, the program will repay up to $60,000 worth of student loans. After two years, docs can re-up and essentially have medical school paid off by the program.
AmeriCorps volunteers work around the country on issues related to education, health care, community building, and environmental projects, often in low-income areas.
The work itself pays next to nothing, but it’s important work that you can feel good about doing. The program also offers education awards of $5,500 (about $5,000 after taxes).
Federal grant programs should be the first place students and their parents look for financial assistance to help pay college tuition.
Funded by the government, the grants are administered through the U. S. Department of Education. Thousands of students receive grants every year, without which they might not be able to attend college at all.
7. The Federal Pell Grant
The Federal Pell Grant has been helping students in the United States fund their college educations since 1972.
More students rely on Pell grants for financial assistance than any other grant program in America. Based on financial need, the maximum grant amount each year is a little over $6,000, but most students do not qualify for that much.
8. The Federal Supplemental Educational Opportunity Grant
The FSEOG is a further option for students with an extreme financial need.
The program is funded by the government but administrated through the financial aid offices of participating higher education institutions. Grants are given out on a first come, first served basis.
9. The Federal TEACH Grant
The TEACH Grant aims to attract great teachers to underserved areas. To receive the grant, teaching students must sign a contract agreeing to four years of teaching in a high need area such as special education, bilingual classrooms, or mathematics.
Teachers who do not ultimately fulfill their obligations have their grants converted to loans, with interest of course.
Every state has a Department of Higher Education that regulates its colleges and universities, and most of them offer their resident students some type of financial aid.
Grant programs vary widely from state to state; check out State Supported Grants and Scholarships for information specific to your state.
10. Grants for Minorities
In general, there are two types of minority-focused education grants. Ethnic minority grants offer assistance based on cultural heritage.
Non-ethnic minority grants are need-based programs to help students with certain physical or cognitive disabilities.
11. Grants for Women
Many states offer grants to support women based on financial need, status as a minority or a single mother, and in an effort to attract more women to certain industries.
There are also grants for older women who are returning to school in order to compete in the workforce after a period of unemployment.
Loan Repayment Programs
12. Public Service Loan Repayment Program
If after college you are employed by a government agency or a non-profit organization, you may qualify for the PSLR program.
The PSLR will forgive the balance of your loan debt after you make 120 monthly payments. So you have to pay for 10 whole years, but in a low salaried position, your monthly payments should also be relatively low.
In exchange for two years of work at a critical shortage facility, the government will repay 60% of any outstanding loans – but only loans that specifically relate to nursing training.
Participants may also sign up for a third year of service in exchange for another 25% loan repayment.
College is definitely expensive, but there are ways to reduce the cost and ultimately, the crushing burden of student loan debt.
If you are in dire financial need, a member of a recognized minority, or a person who is willing to work in service of others, your chances of landing one or more of these grants are pretty good.
It takes some work to secure financial aid, but the effort will surely pay off in the end.