A degree in culinary arts is an investment in your future. But how do you pay for it? Culinary school can be very expensive. No matter where you choose to go it can average $20,000-50,000 or even more by the time you receive your degree. Most students don’t have this type of funding at their disposal, and will need to arrange alternative funding for the duration of their time in school.
There are various types of financing available for your college expenses. There are scholarships (awards that you win either by competition or by completing an application).There are grants as well, typically offered by state governments and sometimes business or organizations. In addition, there are work-study options. Because these types of funding do not need to be repaid, the competition is fierce. What happens if you still have a balance due? How can you get ahead and receive your degree if you don’t have the money to attend?
If scholarships, grants and personal monies still leave a large balance remaining, you may need to look into the various types of loans available. Loans are money that you borrow while you are in school, and need to be repaid once you leave school or graduate, in incremental payments with interest.
The federal government offers loans such as the Stafford, Perkins and PLUS loans. They are offered at relatively low interest rates to undergraduate and graduate students, and the government guarantees the college or school that they will pay the tuition amount borrowed. In order to find out of you qualify for any of the federal loans, you must first fill out a FAFSA (Free Application for Federal Student Aid) form on their website. This application needs to be resubmitted each year that you are actively in school. There are deadlines, so it pays to plan ahead.
Stafford loans are offered to eligible students enrolled at accredited institutions. Federal loans guarantee payment to the school in the event that the student is unable to repay the loan. While they typically offer lower interest rates than banking loans, the guidelines are strict and there are borrowing limits. Stafford loans are intended to supplement all other funding resources such as scholarships, grants and work-study. Money from Stafford Loans can be used to pay tuition, room, board, books, supplies and other costs related to your education.
Perkins loans are need based loans as well offered to American students with exceptional need, pursuing a college education. A Perkins loan is a ten-year repayment commitment, at 5% interest rate. The limits for undergraduate students are $5,500 per year with a lifetime maximum of $27,500. As with the Stafford Loan, because it is federally subsidized, interest does not begin to accrue until you graduate or leave school. Not all schools offer the Perkins loan, so you should check with your schools financial aid officer.
A PLUS loan is a loan offered to parents of students at accredited institutions of higher learning. The interest rate is fixed at 7.9% and the loan is backed by the federal government. This loan is designed to help parents pay the gap in funding for their children’s education.
Beyond federal loans, there are private loans available from most banking institutions. The interest rates vary greatly, so it pays to shop around. IN addition, guidelines differ as well, although most rely on credit ratings and a solid (and positive) financial history. Some institutions may require a parent to cosign for a loan.
Different universities and colleges may offer loans through the school. These are typically low interest, and can be paid while in school or after graduation. Speak to the financial aid officer at your school of interest and they can tell you if this program is offered.
If all other avenues are addressed, an alternative solution might be micro lending. Microloans are small loans, typically from family or friends, to help pay for remaining balances or gaps. These should always be formal (documented), in order to cover everyone involved. A new option in this market is called Prosper Lending. Prosper is a peer-to-peer lending marketplace that connects borrowers directly with investors. People invest in each other – from $2,000 up to $35,000.