Do's and Don'ts of Paying for College

Financial well-being March 29, 2019 By Jennifer Henagar

Arne Duncan once said, “The cost of college should never discourage anyone from going after a valuable degree.” To help you navigate the costs of a college education, I would like to share some “do’s” and “don’ts” for you to consider how you can pay for a degree.

DO – Avoid Student Loans, if possible.

Start by applying for every scholarship and grant that you can. Make applying for scholarships your part-time job because the return on investment (your time) is worth it. Not to mention, it is easy to apply for scholarships! Following are links to some helpful scholarship opportunities:

DO – Complete the Free Application for Federal Student Aid (FAFSA) every year, in order to qualify for any free grant money. 

Federal Student Aid is part of the U.S. Department of Education and is the largest provider of student financial aid in the Nation. Federal Student Aid is responsible for managing the student financial assistance programs which provide grants, loans, and work-study funds to students attending college or career schools. Click here to find out when your FAFSA deadline is for your state and school year.

DO – Take advantage of federal student loans, first, if you must borrow money to pay for college.

You will learn the types of federal aid that you, or your adult child, is eligible for once you complete the FAFSA form. Federal loans typically have lower interest rates, more generous repayment terms, and do not require a credit history check or a co-signer. Not to mention, they come with benefits like income-driven repayment plans and deferment or forbearance options if the graduate struggles to make payments upon entering the workforce.

Private student loans can have higher interest rates and typically require a co-signer. They also have fewer repayment options, which can make the payments more difficult to manage on an entry-level salary. Private student loans should be used as a last resort, only if federal loans don’t cover the total cost of college attendance.

If you want to help your child pay for school but don’t have enough money saved, you may be eligible for a Parent Direct PLUS Loan. This is a federal loan designed for parents of dependent students. Unlike other forms of federal loans, Parent PLUS loans do require a credit check, so you cannot have an adverse credit history. To get a Parent PLUS loan, your child will have to complete the FAFSA and you and your child must be U.S. citizens or eligible non-citizens. The parent will sign a PLUS loan master promissory note, which will explain the terms and conditions of the loan and the legal agreement to repay the loan. The school will determine the actual amount you may borrow. The current interest rate for a Parent PLUS loan is 7% and it is fixed for the life of the loan.

According to Liz Weston, “your total borrowing shouldn’t exceed what you expect to make your first year out of school.” This can help ensure you can pay off what you owe within 10 years, while keeping payments below 10% of your income.

To get an idea of what your monthly student loan payment will be under available repayment plans, use the Repayment Estimator at

DON’T – Don’t overlook the option of having your child help cover their college costs.

Nearly 4 out of 5 college students work while in school, on average putting in 19 hours a week during the school year. The benefit of working a part-time job stretches far beyond your wallet. A study by the Bureau of Labor Statistics found that students who work part-time have higher GPAs than students who didn’t work at all.

Additionally, working students will have the opportunity to explore what work they enjoy so they can start a career after graduating from college in the right place. Don’t let your college student become one of the over 400,000 currently on default on their student loans! Encourage them to work while in school to learn the principles of hard work, time management, and budgeting.

DON'T forget...

Paying for college is a major expense but, if you choose to follow these “do’s” and “don’ts,” it will help you minimize your student loan debt and start off your career on the right foot.

By Jennifer Henagar

Director of Financial Well-Being, First United Bank - Durant

Jennifer Henagar has worked in the financial services industry for over 20 years. She is currently the Financial Well-Being Director but has a diverse background in Wealth Management, Human Resources, Organizational Development, Executive & Professional Coaching, and various positions at a Credit Union. 

Jennifer graduated with a Bachelor’s degree in Finance from Southeastern Oklahoma State University and a Master’s degree in Business Administration from Texas Woman’s University. She obtained her graduate certificate in Executive and Professional coaching from the University of Texas at Dallas in 2015 and earned her Ramsey Solutions Master Financial Coach designation in 2016. 

Jennifer and her husband Greg live in Atoka County and have five children and two grand-children. For fun, the family enjoys bowfishing and traveling to new places.