Best Ways to Pay for a University of Kentucky Education

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Problems associated with the steep ticket price of post-secondary education have been a part of the public conversation for a long time now. From 2008 to 2018, published prices for four-year private institutions increased by an average of 2.4% annually, after adjusting for inflation.  At public four-year institutions, that figure was 3.2%. Regardless of where you attend, the cost of education and the potential debt are big factors for consideration.  This makes discussions of student loans and student loan forgiveness a common cause of personal and familial stress. Fortunately, there are a number of grants, scholarships and federal student loans to assist ambitious but less-well-funded college students.

At the University of Kentucky, the Commonwealth of Kentucky’s largest post-secondary institution, expenses for in-state students are lower than some competitors, but they are still a consideration.  Founded in 1865, the university sits on 814 acres in the city of Lexington, Kentucky. This central Kentucky campus is in the heart of the Bluegrass region, surrounded by some of the state’s most idyllic hills and horse farms.  Along with its undergraduate program, UK offers roughly 120 graduate degrees including those at the College of Medicine, College of Law and Gatton College of Business and Economics. For 2018-2019, the University of Kentucky tied for 147th in the US News & World Report’s Best College Rankings.

Let’s look at some of the big numbers relevant to enrollment, cost, and debt:

By the Numbers

Undergraduate Enrollment (’18 – ‘19): 22,244
Total Enrollment (’18 – ’19):  29,465
In-State Tuition & Fees (Annual): $12,180
Out-of-State Tuition & Fees (Annual): $29,168
Average Annual Cost: $17,617
Students on Financial Aid: 47%
Average Salary After Attending: $45,100
Average Total Debt After Graduation: $23,000
Average Monthly Loan Payment: $245


The first sources of financial aid to consider are grants.  Like scholarships, grants do not need to be repaid! Before you can apply for grants or any other kind of financial aid, you need to complete the Free Application for Federal Student Aid (FAFSA).  This application will assess your financial need and help you determine whether you qualify for federal grants or federal student loans.  It is also required by many universities before you apply for school loans or other student aid. If you initially qualify, the government requires you to update your FAFSA annually to maintain your federal funding.

Federal Grants

Pell Grant

The Federal Pell Grant is federal gift assistance, which means that, unlike a federal student loan, it does not need to be repaid.  Pell Grants are intended for students who display both academic promise and great financial need. Qualification for the grant and the amount awarded are based on both eligibility and enrollment status.  For qualified applicants, the amount of the grant may fluctuate by semester depending on course load. The current annual maximum award is $5,920. In 2018-2019, 23% of students at the University of Kentucky  received money from a Pell Grant.


Like the Pell Grant, the Federal Supplemental Education Opportunity Grant (FSEOG) is a federally funded, need-based grant.  The FSEOG is awarded to Pell Grant recipients.  The grant award ranges from $100 to $4,000 annually depending on the student’s need.

Children of Fallen Heroes Scholarship

The Children of Fallen Heroes Scholarship is available for students who are eligible for the Pell Grant and whose parent or guardian has died while serving as a public safety officer.  Recipients of this scholarship receive the full Pell Grant amount.

State & Local Grants

CAP Grant

The College Access Program (CAP) Grant is a state-level grant awarded by the Kentucky Higher Education Assistance (KHEAA).  Like the federal grants, it is based on financial need. Applicants must first complete the FAFSA.  The maximum annual award of the CAP grant is $1,900.

For more information on grants, visit the resources offered by the University of Kentucky.


Scholarships, like grants, are money that the recipient does not need to repay.  Unlike grants, they are generally awarded on a combination of factors, including scholastic or athletic merit.  They tend to be awarded more specifically and come from the local level, either from the school or a private institution.

Need-Based Scholarships

At the University of Kentucky, applicants for need-based scholarships must complete the FAFSA.  In addition to showing financial need, they need to have scored a minimum 28 ACT or 1250 SAT.  Currently enrolled students need to maintain at least a 3.0 GPA.  Annual awards range from $500 to Full Tuition.

Merit-Based Scholarships

The University of Kentucky also offers a spectrum of merit-based scholarships to attract top students to its roster.

Academic Scholarships

These partial-tuition scholarships have high school GPA requirements ranging from 3.0 to 3.5, entrance exam minimums, and are based on an application.

Competitive Scholarships

These scholarships provide either full-tuition (in-state and out-of-state) or full-tuition plus stipends for housing.  Competitive Scholarships, including the coveted Otis A. Singletary Scholarship, require higher GPA, higher entrance exam scores and an in-person interview.

Selective Scholarships

Students who receive selective scholarships will have satisfied the minimum GPA and entrance exam requirements, plus have attended an exclusive program such as the Governor’s Scholar or Governor’s School for the Arts.

For more information on scholarships, visit the resources offered by the University of Kentucky.


For most students, grants and scholarships will not completely meet their financial needs to attend a four-year college or university.  For students who cannot pay the balance with savings, federal student loans and private loans can make up the difference. The students at the University of Kentucky are no exception to this.  The average student debt upon graduation is $23,000. There are advantages and disadvantages to the different types of private and federal student loans available.

Federal Loans

There are several significant advantages to Federal Student Loans.

– Fixed Interest Rates: The national rate is set annually and holds for the term of the loan.

– Hardship Deferment: Recipients of the loan may qualify for a pause on repayments in the case of financial hardship.

– Student Loan Forgiveness:  Public servants (e.g. teachers, government workers, peace officers) may qualify to have the loan completely or partially forgiven after a period of service.

– Income-Based and Pay-As-You-Earn (PAYE) Repayment Options

Federal Student Loans fall into four distinct categories.  

Direct Subsidized Loans

Subsidized loans are available for students with financial need. These loans currently carry an interest rate of 5.05%.  Most importantly, the government pays the interest on the loan while the student is enrolled and during certain grace periods and deferment periods.

Direct Unsubsidized Loans

Unsubsidized loans are available for all undergraduate and graduate/professional students.  The current interest rate is 5.05% for undergraduates and 6.60% for graduate students. These loans also carry loan fees and the government does not cover any of the interest on the loan.

Direct PLUS Loans

These loans are available for graduate/professional students and parents of dependent undergraduate students. These loans carry higher interest rates and fees than direct loans.

Federal Perkins Loans

Perkins Loans are available for students with exceptional financial need.  The 5.0% interest rate is subsidized by the government during the period of active enrollment and for 9 months after graduation.

For more information on Federal Student Aid, visit the resources offered by the US Department of Education.

Private Loans

For students not wishing to or not able to acquire funding through federal student loans, the free market offers a plethora of borrowing options in the form of private student loans.  Private loans do not offer some of the protections provided by federal student loans, but they do have their own advantages:

Advantages of Private Student Loans

– Competition = Lower Interest Rates: Interest rates of private student loans depend on many factors including amount, length of term and credit score.  If you or a co-signer have a good credit score, you can secure a lower rate.

Refinancing Options: Like home and auto loans, private student loans can be refinanced multiple times, leading to student loan consolidation and lower rates.

– Incentives: To remain competitive, a lender may offer borrowing incentives such as on-time payment interest forgiveness and hardship protection.

Private Loan Shopping Tips

Complete the FAFSA First: While this doesn’t matter to private lenders, you should make sure you’ve exhausted all your avenues to secure finances that don’t have strings.

Establish Good Credit: Because private loans consider your credit score, you’ll need it to be in great shape.  If you don’t know what it is, subscribe to a free credit monitoring service.  Good borrower behavior like on-time payments and low credit card balances will keep your credit higher.  If you haven’t yet established credit, consider applying for a low-limit, low-interest credit card.

– Get a Co-Signer: Because student loan applicants tend to be young and in less-than-prime financial shape, sometimes acquiring a loan with a favorable interest rate (or a loan at all) can be difficult.  If a family member or trusted friend with good credit will cosign for your loan, it increases approval chances and decreases rates.

Only Borrow What You Need: Student loan debt can hang over individuals for a long time.  Consider both the short and long-term when you borrow. Use a student loan calculator to calculate how long it will take to repay what you borrow with a monthly payment you can afford. Only take out a loan for tuition and necessary living expenses.  

Top Private Student Loan Lenders

Once you have exhausted your options for free funding and thoroughly considered your personal financial situation, it’s time to shop for lenders.  Here are some of the top private student loan lenders of 2018-2019.


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January 4, 2020

Mark Gibson

Mark Gibson is a personal finance consultant and wealth-investor.  Mark brings his top-notch financial analysis to his work at FiGuides as our lead consumer finance editor. Protection Status