Tips: Selecting and Financing Higher Education
Deciding Where To Go To College
Lots of factors determine where someone should go to college, not the least of
which is cost. All college educations cost money but some don’t cost as much as
others. Community colleges (AC) are the least expensive option followed by
state-assisted institutions (WT, Texas Tech) followed by private institutions (Baylor,
Harvard). Attending a college outside the state you reside will also result in higher
So, if you plan to attend a school that will cost more money, start preparing now by saving
money and getting good grades. Personal funds and scholarships are the best way to offset the expense of an
expensive education. Borrowing money for your education is an excellent investment and a necessity for most
individuals; however, borrowing more money to attend a private school rather than attending a state institution where
you can receive the same degree is not a good idea!
Tips For Saving
Start saving now! It is always cheaper to save now than borrow later. If you start saving $20 per month in a simple
savings account when a child is born, that child will have almost $6000 saved for college by the time they graduate
from high school.
Save regularly and automatically. Setting aside even a small amount each month adds up. A simple savings account
that you put $10 per month at age 8 in will give you more than $1500 by the time you’re ready to go to college.
Increase the amount you save each year (even if it’s only $5 per month more) to keep up with rising tuition and
inflation. By adding $5 per month each year between age 8 and 18, you will have more than $5000 saved for college.
Talk to your financial advisor about other saving options such as education savings bonds, prepaid tuition and section
529 college savings plans.
Scholarship—aid that is provided to a student that DOES NOT have to be repaid; scholarships are usually provided by
an individual, organization or business like a gift
Grant—aid provided to a student that DOES NOT have to be repaid but that is typically provided by a government
program; grants are mostly determined by need and seen as an entitlement based on a person’s situation
Loans—aid provided to a student that DOES have to be repaid; loans are available through government programs as
well as private organizations such as Opportunity Plan, Inc.; repayment of the loan does not typically begin until the
student graduates from college
• Subsidized Stafford Loan—a low-interest rate loan made to a student in which interest is paid by the federal
government as long as the student is in school; payments aren’t required while you’re in school and credit
history is not a factor in qualification
• Unsubsidized Stafford Loan—a low-interest rate loan made to a student in which interest begins accruing as
soon as the money is borrowed—even though payments aren’t required, interest is still accruing; credit
history in not a factor in qualification
• PLUS Loan—a loan made to the parent of a student in which interest begins accruing as soon as the money
is borrowed and payments begin before the student graduates; PLUS loan interest rates are higher and are
based on credit history of the parent
• OPI loan—a low-interest rate loan made to a student which must be cosigned by another individual and does
not accrue interest or require payment as long as the student is in school full time; credit history for the
student and the cosigner, as well as other factors, are considered
FAFSA—Free Application for Federal Student Aid—www.fafsa.ed.gov—This is where it all begins; this online form
submitted to the U.S. Department of Education determines the type of aid (scholarships, grants or loans) you
Opportunity Plan, Inc.
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