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Investing in a college education is a large expense for most families. To make the most of this investment, we recommend that all DU students create a financial plan. It's not enough just to "get" to DU—we want you to graduate (with the least amount of loan debt possible). A lot of unexpected changes can happen; creating a strategy before you arrive on campus will help you immensely. This email outlines ways to minimize student loan debt and factors to consider when creating your four-year plan.
Planning for Four Years
The Cost of DU
Tuition and room and board rates change over time. Based on information from prior years, you should anticipate a small increase in costs annually. New tuition rates are typically announced in November each year.
Aid in Future Years
There are a variety of factors that can impact the amount of aid a student will receive in subsequent years. The most important points to remember are:
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Apply for aid every year. The financial aid offer you receive is only for the 2022-23 academic year. With the exception of merit scholarships, financial aid is not automatically renewed—you must apply for aid each year you attend DU.
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Merit scholarships amounts are fixed. Although tuition costs will increase slightly each year, your merit scholarship will remain the same for all four years.
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You can only receive your Residence Hall Grant if you live on campus. If your financial aid offer includes a Residence Hall Grant, it can only be used if you live on campus or in campus-approved apartments. So, if you move off campus during your junior and senior years, for example, you will no longer be eligible for that aid.
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You may be eligible for additional departmental scholarships in future years. Once you have chosen a major, you may be eligible for additional scholarship aid from your academic department. While many of these scholarships require financial need, some are only merit-based. The DU Scholarship Application opens up annually in March.
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You will be eligible for additional Federal Direct loan funds in future years. If needed, you can borrow an additional $1,000 in Direct Subsidized/Unsubsidized loans your sophomore year, and an additional $2,000 during your junior and senior years.
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Pay attention to the requirements to keep your aid. To remain eligible for financial aid, you must maintain Satisfactory Academic Progress. There are also minimum enrollment requirements for certain types of aid.
Multiple Siblings
The number of siblings in your family who are concurrently attending college can have a considerable effect on your financial aid eligibility. Your financial aid offer will change in future years if there is a change in the number of siblings enrolled in college. Contact our office for more information.
Life Changes
Your financial aid application is just a snapshot and only captures one point in time in your financial life. In the future, if you and/or your family experience an unexpected change to your financial situation that is not reflected in your FAFSA or CSS Profile, you may submit a Special Circumstances form (also known as an "appeal"). Examples that may constitute a special circumstance include loss or reduction of employment or wages, bankruptcy or foreclosure, or loss of child support.
Smart Borrowing
Only Borrow What You Need Each Year
If you need to borrow federal student loans to help pay for your education, be sure you are only borrowing what you need. Most students are offered $5,500 in Direct loans their first year. Remember, you don't have to borrow the full amount listed in your financial aid offer (or any at all)! Any amount of loan money you accept will have to be paid back once you graduate.
Estimate Your Total Borrowing for Four Years
Keep in mind that if you need to borrow for your first year at DU, you'll likely have to borrow the next three years as well. We encourage you to estimate the total amount you'll have to borrow for your degree to ensure you can afford the monthly payments once you graduate. A good rule of thumb? Your total student loan debt at graduation should be less than your annual starting salary.
Estimate Your Monthly Payments at Graduation
Student loan payments can make up a large percentage of your take-home pay. If you have an idea of what your projected income will be, you'll know how large of a student loan payment you can handle. Use Federal Student Aid's Loan Simulator to calculate what your future payments will be with different amounts of student loan debt.
Tips to Minimize Borrowing:
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If you borrow a Direct Unsubsidized loan or private loan, pay the interest on those loans, if possible, during the year. Paying the interest as it accrues will reduce the amount you owe at graduation.
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Put the time and effort into applying for private scholarships! Any private scholarship you receive will reduce the amount you may have to borrow.
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Create a budget—and stick to that budget.
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Get a part-time job. Even a small amount of earnings can contribute to college costs and your borrowing.
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Don't forget about the earning potential you have during the summer! Summer earnings can be set aside to help with books, supplies, and other costs throughout the upcoming academic year.
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Cut costs any way possible—rent rather than purchase books, buy clothing at thrift stores, etc. Live like a college student now so you don't have to after you graduate!
The bottom line: Be sure your college financing strategy is a strategy you can rely on for four years. Need help? Feel free to contact our office. Our advisors can help you map out a plan for you and your family.
Want to review past Financial Aid 101 emails? Check out the archives!
Up next week: Policies and Keeping Your Financial Aid from Year-to-Year
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