When I was 18 years old, everything I knew about paying for college could have fit on the postage stamp that came on my acceptance letter.

(host 2) Going to college can be a gold mine-- the average college graduate makes about a million dollars more over their lifetime than someone without a degree!

But the overall profitability of your degree depends greatly on how you pay for it.

The path to hitting the mother lode can be strewn with twists, turns, and dead ends.

But if you're willing to put in the work, there's actually a lot of gold in them thar hills!

[whimsical music] [coins jangle] ♪ Seventy percent of college students don't have their education costs fully covered by family.

So prospecting for financial aid is a new student's most important first step.

But where to begin?

With the ultimate financial-aid treasure map-- the Free Application For Student Aid, or FAFSA.

It's 108 questions that dig into your personal and financial history.

It's your best shot for obtaining the most amount of free or low-cost college aid out there.

Surprisingly, only 61% of high-school students are filling it out.

(host 2) Yes, it might look intimidating at first.

But most people report that completing the entire form only takes about an hour, it can be sent to ten schools at once, and you can do it before you even apply to college!

There's even a handy website that lists common mistakes to avoid when completing the FAFSA.

And hey, now that you're a legal adult, you may as well get used to filling out tedious forms.

(host 2) Each school will send you an award letter with different offers.

You'll need to sift through the sediment to find what treasure may lie beneath the surface.

The real paydirt you're hoping for is free money, AKA grants and scholarships.

These might come from the federal government, the state, or the school itself.

The amount you're offered can be need-based or merit-based, so having a low family income or high grades will help your chances.

But contrary to popular belief, there is no income cut-off when it comes to aid, so don't let that stop you from prospecting.

Over 13 million students receive financial aid every year, so how can you get a leg up in this gold rush?

First, file early!

Gift aid is first come, first served.

If you wait too long to stake a claim, you could find the vein has been bled dry.

FAFSA forms become available the first of October, and you'll have to redo it every year, so put an ongoing reminder in your calendar!

If you're still a dependent, most of the FAFSA information will be based on your parents' finances.

If you happen to go back and forth between guardians' households, spending more time with the lower-earning parent could make you eligible for more needs-based aid.

Or if one parent has children already in college, claiming them as the custodial parent could also end up putting more in your pocket.

And finally, you can appeal the letter if you don't love the outcome.

Try calling their financial aid department and explaining your situation.

You can even show them award letters for colleges that are offering you more.

You might have more leverage than you think.

Your award letter will let you know whether you're eligible to take part in a work-study program.

In 2019, only 14% of students took advantage of jobs offered through their university.

You'll probably only make a few thousand dollars during the academic year, but the perks can be sweet.

Working on-campus, you won't have to commute.

Your hours are always scheduled around your classes and some even allow you to do homework on the job!

Most importantly, you could get a headstart on your career by getting work experience in your chosen field while you're still in school.

Now, I know the idea of cobbling together a free ride is super appealing, but it might be time for a little reality check.

According to a study done back in 2016, only 18.8% of undergraduate students received enough gift aid to cover half the cost of attendance.

So unless you can make up the difference with savings or working a ton, you might have to prepare yourself to join the 70% of your fellow graduates in taking on some student loans.

And its important to learn that not all of them are created equal.

Federal student loans typically have the most favorable terms, and, depending on your FAFSA, can even be subsidized, which means the government actually pays the interest while you're in school, and sometimes even afterwards.

Even unsubsidized federal student loans have advantages.

You don't have to pay while you're still in school.

And once you're out, some will allow you to adjust your payment schedule based on your income, so it never gets too onerous.

If you end up working in certain fields, like teaching or healthcare in underserved areas, your federal loans could be eligible for forgiveness.

The last type of aid is private student loans.

They can seem attractive at first because you don't have to bother with the FAFSA.

But you will have to show credit-worthiness and ability to pay back the loan.

Since this is tough for young folks, you might have to get a family member to co-sign for these.

The terms and conditions of these are set by the lender, rather than the government.

And interest rates are typically higher.

Federal loans are currently offered around 4.5%, while the average private fixed-rate loan starts around 6.17%.

That might not sound like a huge spread, but with the average student debt load hovering around 31 grand and taking 21 years to pay off, those couple percentage points could mean $7,000 in interest alone!

Some private student loans can go as high as 14%!

I'm too afraid to do the math on that one, but this is starting to feel more like fool's gold to me.

As you can see, there are a lot of different paths to tread when it comes to paying for college.

And I think it's a pretty good parallel to life in general.

Truly valuable things are usually hidden behind a lot of hard work and sacrifice, whereas easier paths come with a lot of strings attached.

But remember, even if you end up having to take out loans, it's not the end of the world.

Any degree, even a 100% financed one, is better than none at all.

(both) And that's our two cents!