Empower Blog
Bridging the College Funding Gap
June 12, 2024

Bridging the College Funding Gap

College-Career Planning
Want to learn more about this topic?
Click here to watch our Bridging the College Funding Gap Webinar.  

There comes a point when it’s finally time to answer the childhood question, “What do you want to be when you grow up?” If your career path requires college, there are many decisions that must be made before you take that first step on campus.   One of the initial questions many families have is “how do we pay for college?” According to U.S. Department of Education, the average full-time in-state student at a public four-year college spends $14,900 annually.

How College Lending Works

It starts by determining your Cost of Attendance (COA). COA is based on direct costs and indirect costs of attending college. Direct costs are paid directly to the school and include tuition and fees plus room and board. Indirect costs are usually paid to something other than the school. Examples of indirect costs include transportation, books and supplies, living and personal expenses. Your lifestyle choices can dictate indirect costs.

Next, your Student Aid Index (SAI) is determined. This amount comes from the Free Application for Federal Student Aid (FAFSA). When you complete the FAFSA, it applies to a single academic year. That means you need to submit a FAFSA each year—and make sure you meet the FAFSA deadlines for state and college aid to maximize the amount and types of aid you could receive. Your financial need is calculated by subtracting SAI from COA.

It is important to note that SAI used to be called Expected Family Contribution (EFC).

If your SAI is less than the COA cost of attendance, then you demonstrate financial need and would be considered for need-based aid such as grants or subsidized federal student loans. If your SAI is more than the COA, then you are not eligible for need-based aid. You will still be eligible for merit-based aid (i.e., scholarships), which is not affected by a student’s financial situation. Everyone's situation is unique, and many students whose SAI is greater than their COA still need financial assistance to pay for college. All students, regardless of SAI, are eligible for unsubsidized federal student loans.

Funding Options

There are numerous sources of money available to students when it comes to paying for college. Colleges cover financial need in the best-to-worst order. This means the "free money" they give to students through grants and scholarships are awarded first. These do not need to be repaid by the student.


Students can also receive funding directly from their school through work-study programs. Work-study is only available for students who demonstrate financial need. If you qualify for it, you’ll see it on your financial aid offer. The way it works is the student works at an on-campus job, and the paycheck you receive is the funding that is noted in the financial aid offer. It’s important to note this is not a lump sum payment you receive but is paid through your on-campus job via your paycheck.


If you need these funds up front to cover the costs at the beginning of the school year, they will not be available.


If you've exhausted all forms of university funding, and you still have a bill to pay, it's time to consider student loans.

Federal Student Loan through the FAFSA

  • The best student loan option with the lowest rate.
  • The loan is in the student’s name.
  • $5,500 is the most a freshman can borrow. Sophomores can borrow up to $6,500. Juniors and seniors can borrow up to $7,500. A student can borrow up to $31,000 in their lifetime.
  • Can be used for students who are determined to have a financial-need (subsidized loans) or for students who do not meet the need-based criteria (unsubsidized loans). Students may be offered a combination of subsidized and unsubsidized loans.
  • Apply by completing the FAFSA. Most students typically need to accept their award in their online student account because the loan flows through the school.

Federal Parent PLUS Loan

  • In the parent’s name and non-transferable to the student.
  • Eligibility is not based on financial need, but a credit check is required.
  • The interest rate is the same for all borrowers and is not based on credit history.
  • Information may be included in the financial aid letter.
  • Apply through Studentaid.gov.

Private Student Loans

  • Available through banks or credit unions.
  • Can be in the student’s name with a cosigner or a parent loan in the parent’s name.
  • Interest rate based on borrowers’ credit history.
  • Most likely not included in financial aid letter.
  • Apply directly with the financial institution.

CommunityAmerica’s Student Loan

  • The loan is a line of credit that allows you to borrow up to the full cost of the remainder of your education without having to re-apply each year.
  • Competitive rates plus discount with autopay.
  • Flexible repayment options.
  • Co-borrower release option which allows the co-borrow to be removed from the loan once the student can quality on their loan.
  • Apply online at CommunityAmerica.com/Student-Loans.

Start the conversation early and include everyone who is involved in paying for college. It’s never too early to decide who is paying, how much you are willing to pay, who is borrowing and how much you are willing to borrow. When scholarships, grants and federal aid aren’t enough, private student loans can be a necessary and cost-effective way to fill educational funding gaps. At CommunityAmerica, we want to make financing college easy so you can focus on achieving your dreams of higher education at the school of your choice.


And if you have any questions along the way, get in touch with our dedicated College and Career Planner, Karly Scholl, for individualized guidance for your future plans.


More Resources


All loans subject to credit approval.


Was This Article Helpful?
1 of 1 people found this article helpful
About the Author
Karly Scholl Headshot
Karly Scholl

College & Career Planner

Karly is a College & Career Planner at CommunityAmerica. She can help you navigate the most important stages of the college and career planning process, including career exploration, choosing an educational program, and establishing realistic financial expectations around funding your education.