Paying for College: Costly Mistakes to Avoid

Young woman filling out financial aid or student loan application at home, related to Brazos student loans.

BIG Ideas:

  • College is a major investment that requires thoughtful financial planning.
  • Financial aid, scholarships, and grants can significantly reduce what you pay for college.
  • The more you plan, the less you’ll need to borrow, helping reduce your financial burden and prevent overborrowing.

Has this happened to you?

You’ve dreamed about all the exciting things college will bring – the friendships, learning experiences, and the chance to be independent while building a great future.

Then, something happens.

You start researching the colleges on your list and come face-to-face with a harsh reality: the price. It’s more than just sticker shock; it’s a sticker spiral.

Suddenly, what seemed like an exciting dream feels like a financial nightmare.

Well, the good news is that you are not alone. The soaring costs of higher education today have left many students and their families wondering how they can pay for college.

And many are successfully paying for college without breaking the bank. Others, unfortunately, have found themselves where they don’t want to be: in serious debt.

So how can you avoid joining them?

You can start by doing a little homework and studying a few important questions that will go a long way in paying for college.

What Mistakes Should I Avoid When Paying for College?

Here are some of the most common ones families make:

  • Not doing your homework by planning. This is by far the BIGGEST mistake you can make. College may be one of the biggest investments of your lifetime. Your decisions should never be taken lightly or based on emotion. Of course, you want the best education possible. But that can come at a huge cost if you can’t afford it. That’s why it’s essential to financially plan when paying for college and answer some key questions like:

    Who will be contributing to the cost of college?
    How much can you realistically afford each year?
    How will you pay for it?
    How much debt can you comfortably take on?
    What are your plans and goals after college, and how will paying for college affect them?
  • Thinking they don’t qualify for financial aid Parents may think they make too much money and won’t qualify. In actuality, financial aid is not just for families with lower incomes. Many schools offer financial aid packages to attract students. For example, you could qualify for a grant, which is based on merit, not financial need.

    Also, financial aid decisions aren’t based solely on income. You could have multiple children attending college at the same time and qualify for financial aid. You could also qualify for subsidized loans and work-study programs to make college more affordable.
  • Thinking the sticker price is the actual cost of college. Yes, the sticker price is concerning, but it may not be what you end up paying for school. Again, many schools offer attractive packages that greatly reduce the cost of attendance. And those packages can vary greatly from school to school. So, shop around and compare offerings.
  • Overborrowing. You can apply for a private loan with a private lender to help cover the costs of college after financial aid and scholarships. What you don’t want to do, though, is borrow more money than you need to pay for college, which could leave you with high monthly payments long after school ends. That debt could prevent you from achieving other goals later in life, like buying a car, getting married, or buying a home.
  • Choosing a school you can’t afford. Another mistake students and parents make when paying for college is choosing a school you can’t afford just because of its name, reputation, or location, which leads to the next mistake.
  • Not applying for scholarships and grants. They represent something valuable to you: FREE MONEY! And there are plenty of opportunities out there. Many organizations and other entities offer scholarships based on academics, athletics, community involvement and more. Learn more about how to find scholarships and grants. You can also apply for scholarships every year; they’re not just for first-year students.
  • Not finding ways to reduce the cost of college. They are out there. Like choosing to attend a community college for the first few years and then transferring over to the school of your choice. Or working part-time in college. Or being a resident assistant. Where there’s a will to save money paying for college, there’s a way.
  • Parents are sacrificing their own financial future to pay for college. Yes, parents want their children to have a good education and a brighter future. But they should never sacrifice their own financial future to make it possible. Taking money from your retirement accounts or getting a home equity loan (a second mortgage) may not be the best way to pay for college.

What Can You Do to Pay for College More Affordably?

Here are some pointers:

  • Be smart about what you can afford. The way to determine that is to create a budget.
  • Research your school options. Compare financial aid packages to see which schools offer the best prices to meet your budget.
  • Apply for financial aid and scholarships and grants. It costs nothing to do and could help significantly lower the cost of college.
  • Shop private lenders. If you need additional help with paying for college beyond financial aid, compare private lenders. Not all offer the same rates and fees, so read the fine print.
  • Have the money talk. Parents, talk to your children about your participation in paying for college. Will you help provide money, take out a loan, or co-sign on one? Setting expectations early can help you avoid conflict.
  • Never lose sight of the “why” of college. The point of college is to get a brighter future or give your child one. Saddling yourself with debt to pay for college can jeopardize both your futures.

Brazos is Here to Help with Paying for College

For more than 40 years, Brazos has helped make college costs more affordable for students and parents paying for college. As a Texas non-profit lender, we offer competitive rates on private student loans that can help your family save. Contact us to learn more.