5 Things To Consider – Forbes Advisor – Technologist

In the coming weeks, millions of young Americans and their families will make one of the most significant yet costly financial decisions of their lives: financing college. With tuition rates increasing up to 169% over the last few decades, many Americans may question whether this expense is still worth it.

Still, 83% of Gen Z students believe a college education is important, according to a 2023 Gallup poll. And if you’re like many in the U.S. planning for college, it may feel like an uphill battle, with questions about affordability, the value of a degree and potential student loans.

How do you make this decision with confidence and reliable financial support? Options like looking beyond traditional lenders and considering a partner like Ascent, which can help provide financial support and better planning for students and families, can be beneficial.

As you explore ways to manage the cost of higher education, consider these five things before making any decisions.

1. Understand Your Options

In 2024, Ascent launched the “Ultimate Guide to Paying for College” through its AscentUP1 platform, a free resource for borrowers offering professional training and career readiness. This free interactive 10-minute guide provides updates on the FAFSA® application process and is available to nonprofits, high school counselors, parents and students. It also offers actionable tools to help students and families make informed decisions about which college to attend and how to finance it.

Ascent’s Bright Futures™ Engine allows students and families to compare colleges and majors based on the calculated return on investment (ROI) of college costs and potential future income. Understanding the short- and long-term financial implications of higher education is often the first step in making informed decisions about what comes after graduation. Ascent offers a range of loans and financial aid options tailored to meet different needs, helping over 100,000 people afford school. This includes co-signed and non co-signed loans, as well as options for Deferred Action for Childhood Arrivals (DACA) recipients and parents. Ascent also reports awarding over $330,000 in scholarships.

2. Alternatives to Federal Funding

With the cost of college at an all-time high, many families may find that federal Pell Grants and loans are insufficient to cover expenses.

Over 20 million students rely on federal funding to pursue higher education. The National College Attainment Network (NCAN) found that only 38% of high school seniors completed the Free Application for Federal Student Aid (FAFSA®) by early May 2024, a 20% drop in FAFSA applications completed compared to the previous academic year. This can potentially lead to fewer students registering or attending college due to a lack of funding, disproportionately affecting low-income students and students of color.

Ascent also reports that the FAFSA form—required for federal funding—experienced errors and miscalculations, resulting in some submissions having to be reprocessed.

When federal funding falls short, here are four funding alternatives to consider:

  • Scholarships: Many organizations and institutions offer merit- or need-based scholarships that don’t need to be repaid. Ascent offers several no-essay scholarship giveaways all year.4
  • Work-study programs: These programs offer part-time jobs for students with financial needs, allowing them to earn money to help pay college expenses.
  • Financial aid directly from your college: Colleges often offer their own grants, scholarships or financial aid packages in addition to federal aid.
  • Private loans: Loans from private lenders like Ascent can help cover the remaining costs.

When weighing your options, you can consider partners like Ascent, which focuses on building both short- and long-term success for students and families. According to its 2023 Impact Report, the company aims to increase student borrower income by $10 billion in five years, helping boost graduates’ earnings. You can also consider factors like potential interest accrued, whether repayment is required and how flexible the repayment terms are.

3. Private Loan Options

Private loans may offer an opportunity to bridge the gap when funding is needed. Look for loan options that align with your financial plan and help you pay for college. Here are four options Ascent offers:

  • Non co-signed loans: Ascent’s Outcomes-Based Loan gives students the opportunity to qualify based on factors beyond credit scores, like academic performance and future earnings potential. This option can incentivize students to thrive in college while receiving financial support and career coaching through AscentUP.1
  • Co-signed parent loans: Ascent’s co-signed and parent loan lets parents or guardians take out loans even if their child has low or no credit. Also, borrowers can release co-signers after 12 months, allowing students to start building credit under their own name.5
  • Deferred Action for Childhood Arrivals (DACA) loans: While DACA students are often ineligible for student aid or in-state tuition, which can increase the pressure to pay for college, Ascent provides access to both scholarship giveaways4 and loans for DACA students and families.
  • Pay on your terms: Students and families may want to consider a lender with flexible repayment options. The ability to customize repayment plans and repay early without fees can make financial independence more attainable. Ascent offers up to 40 repayment options, providing flexibility to meet various financial needs.

In 2024, Ascent eliminated all college loan fees, meaning borrowers won’t be charged for applying, processing the loan or receiving the funds.

4. Recognizing the Credit Score Barrier

A low credit score can have life-long consequences, potentially impacting adults’ ability to purchase or insure a car, rent an apartment or home, take out a mortgage, apply for certain credit cards, fund a new business venture or even pay for higher education. If a low credit score is a roadblock to higher education, consider alternatives like scholarships, work-study programs and private loans.

Financial education can help lead to better financial decisions. Ascent reports that 83% of its college loan borrowers increased their credit score by an average of 55 points or more,6 and nearly one in five borrowers improved their credit score by over 100 points.6

Ascent offers built-in financial tools and education for borrowers throughout the application process. The company also offers free resources through AscentUP,1 up to 1% discounts for automatic payments2 and 1% cash back for graduating college.3

5. Investing in Long-Term Outcomes

A stable salary and a good credit score can drive lasting financial independence and economic mobility for student borrowers, and Ascent recognizes this.

Internships are important for securing jobs post-graduation, but they can be challenging to obtain for many college students and recent graduates. This is especially true for low-income students, who may not always benefit from the same social capital as wealthier peers and often can’t afford to accept unpaid internships, even when they present a promising opportunity.

While college career centers and employers often offer job and internship fairs, Ascent is also stepping up to help solve the problem. The online lender offers its borrowers access to paid internship opportunities at leading companies. The AscentUP Internship Program1 aims to provide pathways for borrowers to make money and gain real-life, remote work experience. Ascent borrowers can access self-paced learning, live one-on-one coaching and numerous resources to support their growth in internships and future careers.

You have many options to finance higher education, and investing in long-term outcomes can help set you up for success. As you weigh your options, consider your financial needs and goals so that you can make the best-informed decision for you.

Disclosures

Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Loans subject to individual approval, restrictions and conditions apply. See Terms and Conditions at AscentFunding.com/Rates and AscentFunding.com/Ts&Cs. Loan features and information advertised are subject to change at any time.

1 Eligibility for the AscentUP platform requires that an applicant be enrolled in an Ascent approved institution who has been conditionally approved for an Ascent loan, either as the borrower or through a parent, grandparent, guardian, or sponsor. Ascent’s graduate student loan applicants and consumer loan applicants qualify for access to the AscentUP platform if their approved school has granted access. All Ascent borrowers have access for at least one year to free AscentUP resources through the AscentConnect mobile app and are eligible to apply for the AscentUP Internship Program. Eligible students must agree to the AscentUP terms of service and privacy policy before accessing the AscentUP platform. Please note that eligibility criteria and program terms are subject to change. 

2 The final ACH discount approved depends on the borrower’s credit history, verifiable cost of attendance, and is subject to credit approval and verification of application information. Automatic Payment Discount of 0.25% is for credit-based loans and a 1.00% discount is for outcomes-based loans when you enroll in automatic payments. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. 

3 Ascent’s 1% Cash Back Graduation Reward is for eligible college students only and subject to terms and conditions. Eligible students must request the graduation reward from Ascent. Learn more at AscentFunding.com/CashBack.  

4 Learn more and see Official Rules at AscentFunding.com/Scholarships. 

5 See full eligibility requirements at AscentFunding.com/BorrowerBenefits. Student borrower must make the request to release a cosigner directly with Launch Servicing or the loan holder. The option to apply to release the cosigner is only available to student borrowers who are U.S. citizens or have U.S. permanent resident status or DACA students and is not available to students who are not a U.S. citizen or U.S. permanent resident.   

6 See Ascent’s 2023 Impact Report, page 16.

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