26 Paying for College For 2015-2016, the average cost of attendance (tuition, fees, books, room and board) for one year of college was approximately $21,000 at a public four-year college (in-state); $45,000 at a private four-year college; and $16,000 at a community college. College is expensive, and students today are borrowing more and more money to pay for their education. The average 2016 college graduate had over $37,000 in student loan debt—and now has an average monthly loan payment of $350. Students who default on their loans soon find that being delinquent or de- faulting on a loan has serious consequences. Their wages may be garnished, they may face legal action, and their credit rating is damaged—which can make it difficult to rent an apartment, buy a car, or even get a cell phone plan. Smart students explore their financial aid options, look for ways to cut college costs—and minimize their student loan debt. Financial Aid Overview Financial aid is money that is given, earned, or lent to help students pay for their education. Except for merit-based scholarships, financial aid is generally awarded on the basis of financial need. The four categories of financial aid are grants, scholarships, loans, and work-study. Grants and scholarships are considered “free money.” Loans and work-study are considered “self-help” programs. u Grant – money given, usually because of financial need u Scholarship – money awarded for exceptional academic achievement, outstanding talent, and/or financial need u Loan – borrowed money that must be repaid u Work-Study– money earned by working at a part-time job on campus Financial aid is often awarded on a “ first come, first serve” basis, so applications should be completed early.