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As you finalize your college applications, gather resources, and complete those last checklist items, don’t let the important topic of affordability and how it impacts your life beyond college take a backseat.

As the nation’s largest free college and career planning service, we are dedicated to ensuring all students have access to the resources and tools needed to be successful as they plan for college and their future. That’s why we’re excited to introduce a new resource available for all students, WithFrank.org. Frank was created in 2017 by 28-year-old female founder Charlie Javice to make college more affordable for millions of Americans. Over 4 million students have benefited from Frank’s financial aid services and advice on their post-secondary path to higher education. 

Financial aid plays a cornerstone role in the whole college-going, college application process for around 80% of students today. The FAFSA® (Free Application for Federal Student Aid) is the key to unlocking affordability opportunities. But, you likely have questions: 

1. Do I need grants, loans, or both—and what do those even mean?
2. What do I feel is a reasonable amount of student loan debt for me?
3. Does my planned major and the potential economic opportunities make it realistic to take this debt on?

Let’s tackle this…

Do I need grants, loans, or both? What do these even mean?

First things first; grants are monies awarded to you, specifically for education that you do not have to pay backprovided by your state and/or the federal government.  They generally come in semester “award” amounts paid directly to your school.  Depending on your personal details and where you attend, you could have a considerable amount of tuition covered by just grants. You need the FAFSA® to determine eligibility.  

Before we get into loans, know that scholarships are a wonderful way to help pay for college. Annually over $6 Billion in scholarships are awarded to around 1.5 million eligible students based on everything from academics, sports, socioeconomics, cultural background, personal interests, and even creative writing contests. 

Now, let’s talk about loans.

Loans are broken into two different categories (Federal and private). If you have the choice and need loans, federal loans are the way to go. They have the most flexibility in repayment, oftentimes the lowest interest rate (interest rate is basically an annual “tax” that adds to your repayment amount when you graduate), and are more flexible to accommodate unforeseen economic hardships. Yep, you guessed ityou need the FAFSA® to determine eligibility here, too. Private loans are education loans serviced (provided) by private banks. These generally have higher interest rates and are less flexible in repayment. 

What do I feel is a reasonable amount of student loan debt for me?

Understanding your future earning potential relative to your desired area of study can offer some guidance. Family finances play a role, too. The general rule of thumb is your total loans borrowed should not exceed your first year’s expected annual salary upon graduation.  For example, if you are studying to be a teacher, shoot for borrowing no more than $40-45k in total.  Repayment of federal loans is always deferred for 6 months post-graduation or when you leave the school and can be put off (deferred) if you go back to school. Private loans scarcely offer this flexibility.

Does my planned major and the potential economic opportunities make it realistic to take this debt on?

This is a really important question that comes down to your school choice and major. You may start to hear this referred to as “ROE” or Return on Education.  This is basically how much economic opportunity comes to you based on the money you spend on your education or your “investment” in education. When considering your school choice; are you paying for the experience or are you paying for the academics? Make sure you’re considering all types of schools that could grant you the degree you’re looking forstate schools and community colleges may offer you the ability to pay a fraction for the same education courses. Always have your end goal in mind. 

WithFrank.org is a great resource that can help you apply for the FAFSA® and educate you about college affordability. Over the coming months, we’ll hear from team members at Frank and offer more resources to help you make informed decisions about the FAFSA®.