Now that I’ve discussed what financial aid is, it’s important to go into detail about how financial aid can be your friend, or your enemy.

Although it is different at every school, many schools offer the federal financial aid package which includes grants, loans and work-study programs, depending upon your eligibility. Although it is hard to determine how much money you’ll receive each semester before hand, estimate tools are still a great way to plan ahead. The FAFSA website offers a great tool, FAFSA4caster . This will provide an early estimate of your eligibility for federal financial aid.

Remember that the individual school determines the total cost to determine college, not you. It is possible for a college to leave you with what is called an “unmet need” which is the money left over after the school determines your financial need.

Budgeting financial aid money is extremely important. If financial aid is not budgeted properly, it may result in being in massive amounts of debt due to spending it improperly.

In an ideal world, parents should sit down and talk to their children about college in the child’s early years of high school. This way the parents can discuss their expectations for the child, including how much money they will be able to contribute. This may give the parents an idea of where the child’s been thinking about going to school or talk about any extracurricular activities.

Why am I writing this?

Please do not spend your financial aid on anything but your education. Sometimes people use the loan to make a down-payment on a car, or on frivolous things… and they don’t have the money left to pay for their tuition or any other educational related expenses, including housing.

It’s your responsibility to budget your financial aid. If you run out of money during the semester, it’s difficult to find ways to get it.


It’s important to budget before you go to college.

Think about your sources of money. Will you be applying for financial aid? Have you applied to any scholarships? Is someone helping you pay your tuition? Are you going to be working a part-time job while in college?

Student loans and financial aid loans do not disappear. Especially in today’s economy, a student cannot expect to get a job right after graduating college or to be making enough money to pay off the debt. Remember what they say about the word “assume”… Bottom line: it’s important to budget properly and not to accumulate debt.

It’s important for you to think about how you plan on paying back any loans after you graduate. Will you start saving while in school?

Emergency Plans

Always remember that we can’t control what happens in our lives. It’s important to have some emergency funds saved up in case something happens. May you’ll have to pay to fix your car, or deal with a family emergency.

If you drop out of school, the Department of Education requires that you pay back your loans, and a portion of any grants that you’ve received. There are many reasons on why students drop out of school, so it’s important to consider the possibility of this emergency happening to you. Ask yourself, what would you do to pay back the federal financial aid?

Credit Cards

College is difficult. Credit cards are often used in college for living expenses, and anything else financial aid may not cover. College can be very stressful, but it’s still important to budget properly. If not, the debt accumulated will lead to a life of more stress and more problems.

I know that I’m guilty of “I’ll put it on my credit card and pay the bill later. I’ll get the money soon.” This is very dangerous! Life has a way of surprising you, and who knows, you may not be able to pay that next credit card bill. My word of advice to you is, if you can’t pay cash for it, it’s not worth purchasing it. If it’s a large purchase, give yourself 24-48 hours to think about it and try not to purchase impulsively.

If you have a credit card, use it with caution. Debt can be racked up quickly and so can the interest. Don’t think that it can be paid off when you graduate… by then you could be thousands and thousands of dollars in debt.

Sometimes saving is hard while in college, but it’s important not only to save, but to cut your costs.

Live like a college student while you’re in college, but don’t force yourself to live like a college student the rest of your life.