If you’re new to the college funding process, you may find it overwhelming. You may be looking into multiple sources of funding, only to find that none of them supply the amount of money that you’re going to need.

That’s not unusual. In fact, most use several different sources of funding when paying for college.

But keep in mind that not all funding sources are equal. As you create your college funding plan, there’s a hierarchy you should follow. Securing the right funds in the right order can make paying for college a lot less painful.

Free Money Is The Best Money

One of your first steps in funding your college education is to fill out the Federal Application for Student Aid, otherwise known as FAFSA.

When you apply for FAFSA, you’ll automatically be evaluated for federal grants, as well as some state grants.

Grants are basically free money. They’re financial awards that you don’t have to pay back.

When you receive your acceptance letters from various schools, you’ll find out about your eligibility for certain grants. (Just to be clear, you apply for FAFSA through the government, but your results will come from the schools you apply to.)

Some federal grants include PELL Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG), which both provide funds for students who demonstrate financial need

The Teacher Education Assistance for College and Higher Education (TEACH) provides funds for people who intend to teach in high-demand fields in low-income schools.

The Iraq and Afghanistan Service Grant (IASG) is a federal grant for students whose parent or guardian was a U.S. military member who died in service in Iraq or Afghanistan after September 11, 2001.

Many states also award grants. Check out what your state has to offer here.

Where To Find Out About Scholarships

Scholarships are another source of free money. They may be awarded based on need, merit, or certain characteristics, such as military service, nationality, or program of study.

The Department of Labor maintains a large scholarship database where you can search by keyword.

Colleges, universities, and professional schools that accept you for enrollment may automatically evaluate you for certain scholarships based on your FAFSA application. However, it’s always a good idea to search the school websites to find out about additional scholarship offerings. Many scholarships require separate applications.

It’s also wise to check in with your high school guidance counselor to find out about local organizations that might offer scholarships.

Your Next Best Bet: Federal Loans

Your FAFSA application also allows you to be automatically evaluated for federal loans.

There are two types of federal lines: subsidized and unsubsidized.

If you qualify, subsidized student loans should be your next source of funding. Why? Because the government helps you repay some of the loan interest in the form of a subsidy. This can amount to a savings of hundreds or thousands of dollars over the life of the loan. Subsidized loans are issued based on financial need.

The government also offers unsubsidized student loans, which are not based on financial need. For these loans, the government offers no repayment help. However, unsubsidized federal loans can still be a great value because they often come with lower interest rates and fees than loans from private lenders.

However, both kinds of federal loans are subjected to certain dollar limits, so you may need to find other ways to fully fund your college education.

Less-Obvious Options For Paying For College

Before you apply for a private student loan, you may want to consider some alternative options for filling in your student-loan puzzle.

One option is to choose a less-expensive school so you won’t have to come up with as much money.

You could also ask relatives or family friends to contribute to your education costs.

In some cases, a personal loan may be a good option, although you’re likely to get more favorable rates from a student loan or parent loan.

Parents may decide to take a disbursement from their 401(k) or IRA. However, this should be considered a last-resort option, as hefty tax penalties will apply. Plus, taking a disbursement reduces the amount of funds the parent will have for retirement … and while it’s possible to get a loan for college, it’s generally not possible to get a loan for retirement.

Private Loans Can Fill In Funding Gaps

To help ensure you’re making a smart decision around student loans, use our free NitroScore tool.

The NitroScore tool will help you to determine the affordability of different college funding scenarios based on your projected salary.

At that point, if you’re still looking for additional funds for college, we suggest checking out private loan offerings from some of our trusted and highly vetted loan partners.

Funding your college education can be a many-step process. Start today.

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