[MUSIC] Lisa Lavish, first-year med student, buys a coffee at her favorite coffee shop about 300 days a year. The cost is $4 per day, or $1,200 per year. Meanwhile, Fran Frugal, first year med student, was given a coffeemaker and thermos for graduation. She buys supplies to make her coffee. The cost is $30 each month or $360 per year. After four years of med school and four years of residency, Ms. Lavish will have spent over $6,500 on coffee more than Miss Frugal. Hi. I'm Cynthia Gonzales. One of the most important things to consider when planning for your education is how you will finance your living and program expenses while you are in school. I have been advising students on managing their finances for over 15 years. In this lecture, I am going to provide you with the essential tips on financing your education. As you think about how you will finance your education, there are things that need to be considered, such as knowing the cost, understanding your financial aid options, and managing your money wisely. During the admission process, there are certain costs that you will face. Some of the costs will be fixed, meaning you know what the costs are up front. [MUSIC] Some costs in the admission process will be variable. You may not know the exact costs up front, but they are expenses that need to be considered when planning for your education. [MUSIC] As you apply to each school, you should ask about the cost of attendance. One of the main components of how financial aid is determined is based on a school's cost of attendance. In addition to the tuition, the cost of attendance may include: fees, room and board, health insurance, and books and supplies. During your time at school, you may have expenses that you cannot borrow a student loan to cover. Although it may be tempting to use money you receive from your student loans for things such as car payments, credit card payments, recreation, higher than average rent, moving expenses, and security deposits. Financially does not meant to cover such items. Now you know you will face both fixed and variable cost associated with your education plus the additional living cost that will not be covered by student loans. You may wonder if you can afford to go to school. Think of your education as an investment in yourself. Plan accordingly and you will succeed. Now, let's think about sources of funding. [MUSIC] The first thing you should do is visit the financial aid office at each institution you are considering. Ask for help with regards to funding your education. Grants, scholarships, and fellowships will help with the cost, and won't typically have to be repaid. This may come from the institution, private funds, or even from a sponsored program at the local, regional, and national levels. Additional ways to fund your education include tuition remission, from your employer and military tuition assistance. Tuition remission is when your employer covers the cost or a portion of the cost of your education. Often, you may be required to offer continued employment for your employer in exchange for the financial assistance. For example, if you pay for one year of school, they may expect you to continue your employment with them for two years. In exchange for service, the military may pay up to a 100% of the tuition expenses of its members. Other ways to help offset expenses while in school include finding a part-time job, or applying for a work study program. Work Study, is a need-based financial aid award offered at universities. It is not a grant. You must work to earn it. And it is not a loan, so you don't have to repay it. Some universities also offer tuition free benefits or discounts to their employees. If you need to work while you are in school, you might consider looking for a job at the university. Student loans are also a good option, but keep in mind that it is a loan and you will have to repay the loan once you are done with the program. These loans also have interest rates associated with them, so you need to be aware of what the rates are prior to accepting. Once you accept and use these funds you are also agreeing to repay the entire loan plus the interest that accrues. [MUSIC] Whatever choices you make, be sure you understand your commitments and obligations. If you don't understand something, ask someone from the financial aid office. If you are applying for financial aid, find out the required steps for each school you are considering. Different schools have different requirements. If you have special circumstances that you would like to be considered, such as you or a parent losing their job during the admission process and you're financial situation as changed, be sure to call the school and ask questions about the best way to convey that information in the application. After your financial aid application is reviewed, each school should send you an award notice with instructions on next steps. When you look at your financial aid offer, be sure to only accept what you need to cover your expenses. Create a budget so that you can determine your expenses and accept your financial aid accordingly. There are several online tools that can be useful when creating a budget. Aside from applying for financial aid, you will also want to make sure that your credit is in good shape. Some student loans are credit based and will require a positive credit history, so be sure to review your credit report on an annual basis. At the beginning of this lecture, I shared the example of Lisa Lavish and Fran Frugal. Little things do add up, as you begin to think about financing your education, be sure to know the cost of attendance at each program you are applying to. Create a budget for yourself and identify the fixed and estimated costs of each program. Also consider minimizing your living cost that should not be covered by financial aid. Manage your money wisely once you are in school. And make sure you understand all of your financial aid options. Be creative. Student loans are not the only way to fund your education. Take a step back and think about this from the big picture standpoint. The choices that you make today, will stay with you for years to come. [MUSIC]
