Paying for college can feel overwhelming, but it doesn’t have to be. Sallie Mae created a helpful strategy called the 1-2-3 Approach to Paying for College. It breaks things down into three simple steps — and at The Family Credit Union, we’re here to walk you through each one.
Step 1: Use Money You Don’t Have to Pay Back
Start by using funds that won’t need to be repaid.
-
Savings
If you or your family have set aside money in a college savings account, this is the best place to begin. -
Scholarships
Scholarships are free money awarded based on things like grades, talents, interests, heritage, or even your parents’ employer. Start applying early and apply often! -
Grants
These are typically awarded based on financial need and don’t need to be repaid. To qualify, fill out the Free Application for Federal Student Aid (FAFSA). One of the most common grants is the Pell Grant. -
Work-Study Programs
Work-Study Programs The federal and state governments, and sometimes the school itself, fund work-study programs. The programs consist of part-time jobs that allow the students to earn money for education expenses. As it is a real job and paycheck, there is no need for repayment.
Step 2: Explore Federal Student Loans
If you need more help after using savings, scholarships, and grants, look at federal student loans. Start by filling out the FAFSA.
There are two main types:
-
Direct Subsidized Loans – Based on financial need. The government covers the interest while you’re in school.
-
Direct Unsubsidized Loans – Available to all students, regardless of need. Interest starts building right away.
The student who has the student loan has the responsibility to repay federal student loans.
Step 3: Consider Private Student Loans
If there’s still a gap in funding, a private student loan might help. The Family Credit Union offers the Smart Option Student Loan by Sallie Mae. This loan helps cover college costs that aren’t paid for by scholarships, grants, or federal loans.
Key features:
-
Borrow up to 100% of the school-certified cost of attendance
-
No origination fees or prepayment penalties
-
Choose fixed or variable rates
-
Graduate students may qualify for even lower interest rates
-
Quick and easy application — takes about 15 minutes
You’ll need to be attending a degree-granting school, and depending on your credit, you may need a cosigner.
Encouraging responsible borrowing
We encourage students and families to supplement their savings by exploring grants, scholarships, federal and state student loans, and to consider the anticipated monthly payments on their total student loan debt and their expected future earnings before considering a private education loan. Questions about paying for college? The Family Credit Union is here to help!
