Going to college just keeps getting more expensive, and many are trying to figure out how to pay for college. For the 2017 to 2018 school year, tuition and fees averaged $34,740 for a four-year non-profit private college. Public four-year schools averaged $9,970, which does not even include room and board. You’re looking at $20,770 if you add that in. But there are many ways to pay for college. Let’s look at some of the ways on how to pay for college.
Top 6 Ways on How To Pay For College
1. Scholarships and Grants
Scholarships and grants are the first things you should consider when determining how to pay for college, because you don’t need to pay them back. Some people use these words interchangeably, but scholarships are often based on merit, such as academic or athletic achievements and abilities. Most grants are based on need.
Thousands of scholarships and grants are offered to students each year. They could cover all your tuition or just a part of it. They can be one-time awards or renewable each year. Sources include schools, employers, individuals, private companies, nonprofits, communities, religious groups and professional and social organizations. Some scholarships and grants are meant for those from a specific group such as students who are Native Americans or are from military families.
The trick is finding scholarships and grants where you meet the criteria. Try these free sources of information:
- The college’s financial aid office
- Your high school counselor
- A TRIO The TRIO programs are federal outreach and student services programs for people from disadvantaged backgrounds.
- The U.S. Department of Labor’s free scholarship search tool
- Federal agencies. If you are an undergraduate, you may want to apply for a Federal Pell Grant. These are capped at $5,920 a year and usually are for students from families with income under$30,000 per year.
- Your state grant agency. For state scholarships and grants, see this page to choose your state and search.
- Internet research and your library’s reference section
- Search for outside scholarships. You can search online on the College Board’s Scholarship Search page for scholarships, other financial aid and internships from more than 2,200 programs totaling nearly $6 billion. Businesses, civic group, community organizations, foundations and religious organizations offer scholarships and grants, as do organizations and professional associations in various areas of interest.
- Ethnic organizations
- Your employer or your parents’ employers
You must apply as much as a year in advance for some scholarships and grants, so start looking early. As a first step, you may need to complete financial aid forms such as the Free Application for Federal Student Aid (FAFSA) and the CSS/Financial Aid PROFILE™®. You will need to complete FAFSA to apply for federal aid. The College Board’s CSS PROFILE is an online application that collects information used by almost 400 colleges, universities, professional schools, and scholarship programs to award financial aid from sources outside of the federal government. Contact the school you plan to attend to ask what forms you must complete to apply for your colleges gift aid. They may require one of the forms just mentioned.
2. Free Tuition Schools and Tuition Waivers
Some colleges do not charge tuition to any of their students. Of course, there are still other college costs, but if a tuition-free school fills your needs, it is a great way to whittle down your expenditure. Have a look at this list of tuition-free colleges as a start in your college search.
Other universities grant full and part-time tuition waivers (link to our article on tuition waivers) for a variety of reasons.
- Need: Many universities such as Harvard and Cornell grant tuition waivers to undergraduate students from lower income families. The lines are often below $40,000 or $60,000 in income.
- Diversity: Some schools offer tuition waivers to help historically disadvantaged groups and increase diversity on campus.
- Unemployment: Some public schools offer tuition waivers to individuals who have been long-term unemployed.
- Disability: Some schools offer tuition waivers to the permanently disabled.
- Adoption: Public universities in many states offer tuition waivers to students who were either adopted or in foster care.
- Hardship History: Some schools have programs for those who have undergone specific types of hardship.
- Senior Citizens: Many schools offer free audit programs for seniors.
- Veterans: Tuition waivers are often available for veterans and active military personnel.
- School and Government Jobs: 145,000 graduate students receive partial or full tuition waivers, and many receive teaching or research stipends. Almost all PhD. students receive both tuition waivers and stipends. Many schools extend tuition waivers to employees other than research assistants and to their families.
- Employer Tuition Reimbursement: Some companies pay tuition for their employees who meet their designated criteria.
3. Student Loans
Student loans are often the number one thing people consider when trying to figure out how to pay for college. For student loans there are two main options:
- Federal student loans are made by the Department of Education through the Federal Student Loan Program.
- Private student loans are made by banks and other financial institutions such as credit unions.
Federal student loans offer consistent protections that include flexible repayment options including deferment and forbearance for those who are having trouble paying or who are in special circumstances (such as active military service). Fixed federal student loan rates are set by Congress and are not based on the borrower’s credit rating. Parents may apply for loans to fund their children’s education with Parent PLUS loans.
Private student loan rates may be fixed or variable, and each financial institution has their own criteria for determining rates based on credit history and other factors. Private student loans generally do not include the same protections and repayment flexibility as federal student loans, though this varies among lenders.
To apply for a federal student loan, start by completing an FAFSA Form (Free Application for Federal Student Aid). To apply for a private student loan, contact your bank or credit union, or some of the Internet lending institutions who make student loans such as CommonBond or SoFi.
4. Friends & Family
Many people have parents who give or loan them money to go to school, but it is possible to look further afield to extended family and friends for loans. Usually, people do this after first exploring other options, because of the potential for personal drama if the student is unable to repay the loan in a timely fashion. When borrowing money of this amount, you will likely enter into a legal contract with the lender, who can then sue you if you don’t repay on time.
If you decide to go this route, follow these guidelines:
- Ask someone who can truly afford to loan you the money. Be sure you will not be putting them into a difficult financial situation.
- Talk about repayment terms and what will happen if you cannot pay on time for some reason such as losing your job.
- Have an attorney draw up the contract.
- Pay interest even if Aunt Gertie says you don’t have to. It will help facilitate good feelings.
- Pay on time. Don’t take advantage of your special relationship with the lender.
5. Federal Work-Study Program
The Federal Work-Study program helps students with financial need pay for their educations by providing them with part-time jobs. Both undergraduate and graduate students are eligible. Jobs are both on and off campus, and they are often related to the student’s field of study. You may just be assigned a job, but you may be asked to apply for and interview for specific jobs. The program favors jobs that emphasize community service and civic education.
Work-study awards are made on the basis of
- When you apply (The earlier, the better.)
- Your financial need
- Your school’s funding level
You will make at least minimum wage, but you may make more. However, the amount you earn can’t exceed your total Federal Work-Study award. Check with your school’s financial aid office to see if your school participates.
To qualify for work-study, you must file the Free Application for Federal Student Aid (FAFSA) form. Jobs are on a first come, first serve basis and funds are limited, so apply early.
6. 529 Savings Plans
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future college costs. They are governed by Section 529 of the Internal Revenue Code and are sponsored by states, state agencies or educational institutions.
There are two kinds of 529 plans.
- Prepaid tuition plans let you buy credits at participating colleges and universities for future tuition and mandatory fees. Prepaid tuition plans usually cannot be used to pay for future room and board. These are usually for in-state, public schools.
- College savings plans let you open an investment account to save for future qualified higher education expenses that may include room and board in addition to tuition and mandatory fees. Withdrawals may usually be used at any college or university.
The National Association of State Treasurers created the College Savings Plan Network , which provides links to most 529 plan websites. You can search for an investment adviser and information on their background on Investor.gov.
Other Options to Help Pay For College
Claim a Tax Credit
Reduce your educational expenses by $2,500 each year by taking a tax credit if you qualify. Consider the Lifetime Learning Credit (LLC) and the American Opportunity Credit (AOC). You must be on a degree track to take the AOC, but you can take the LLC just to improve job skills. The IRS has laid out additional differences in a table.
Live with Your Parents
If you live near a college, and it’s possible to go to school while living with your parents, it will save you a lot of money. Room and board can cost as much as tuition at many schools.
Plan Early and Thoroughly
It’s not easy to afford college these days, but figuring out how to pay for college will make attending much easier. Research and apply for scholarships, grants and work-study jobs early. Investigate a variety of loan options. Leave no stone unturned, because you can use a combination of methods to pay for college.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.