College is notoriously expensive. Even after participating in a work study program or receiving grants or scholarships, you still may have to take out a student loan to help cover the difference. Nevertheless, if you keep up your scholarship hunt, you could be surprised at how much money you can win. Despite classes, homework, social life, sports, clubs and all the other activities college offers, many students remain on track with their scholarship search and receive decent funding. However, there are other obstacles that can immobilize a student from applying.
One major reason why students might not pursue scholarships as aggressively as they should is the idea of working hard for something and possibly not winning. Yet, that is the very essence of the entrepreneurial spirit. If beginning a start-up, you may work hours on something and not receive a dime, but as long as you learn from your mistakes, you’re always making progress. Same goes for scholarships. For inspiration, here are a few noteworthy failures from successful people:
- Steven Spielberg, who wasn’t admitted to the USC School of Cinematic Arts three times because of poor grades, became a very successful director behind movies like Jaws, Jurassic Park and Saving Private Ryan.
- Before Sir James Dyson was able to create a successful vacuum prototype, he failed 5,126 times and spent most of his life’s savings. His net worth now is $4.6 billion.
- Bill Gates, the richest man on earth, failed with his first company Traf-O-Data which was a device meant to read traffic counters and create reports for traffic engineers. When they tried selling the device, their demo didn’t work. His partner, Paul Allen, said of the experience that “it was seminal in preparing us to make Microsoft’s first product a couple of years later.”
Not winning a scholarship may not be as notable a failure than the ones listed here, but it carries the same idea. You simply have to be willing to put in some effort and be persistent.
Start Paying Student Loans Now
When you finally do take out a loan, it’s best start paying as soon as possible instead of waiting till payments are due because an unsubsidized student loan accrues interest while in college. If you take out a $10,000 Stafford Loan (the interest rate being 3.86% for the 2013-14 school year), after graduation four years later, you’ll owe $1584 in interest. And if you wait till after your 6 month grace period to start making payments, you’ll owe an extra $198. That’ll be $11,782 in total that you’ll have to pay back. Interest will start building on that amount instead of the original $10,000, a term called interest capitalization, resulting in higher monthly payments once payments are due after college.
If you start paying on a monthly basis immediately after taking out the loan, however, interest will only build on the original $10,000. Here’s how to calculate interest you’ll have to pay each month while in college:
- Multiply the interest rate by the principle: 3.86% x $10,000 = $386
- Then divide the interest amount by the number of days in a year: $386 / 365 = $1.1
- Take that amount and multiply it by the number of days in a month: $1.1 x 30 = $33
Set aside that amount each month to pay the interest of your loan while in college and avoid interest capitalization.
Author’s bio: Lance Mann is a blogger and helms from EasyScholarshipsNow.com which offers valuable information to students searching for non-state specific scholarships they can apply for. He believes that students can fight the high-tide of increasing educational costs if they practice sound financial advice and pursue the billions of dollars worth of scholarships available from a variety of sources.
On behalf of the Student Caring International Community, THANK YOU LANCE for your guest contribution: How Students Can Stay Ahead Financially in College. We are currently using Evernote to gather and share information as we write our next book. Professors de Roulet and Pecoraro
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