How to Pay for College: 8 Expert-Approved Tips
To pay for college, always submit the FAFSA first. Accept grants, scholarships and work-study before student loans.
“How can I pay for college?” It’s like asking, “How can I get well?” Or, “How can I learn another language?” There are many answers, but there is not always one clear path.
If you’re like most students and families, you’ll be pulling together funds from multiple sources. Some types of financial aid are better than others, so use the following advice in this order:
1. Fill out the FAFSA
Even if you don’t expect to qualify for any aid, fill out the Free Application for Federal Student Aid, says Ben Miller, senior director of post-secondary education at the Center for American Progress. The FAFSA is your ticket into the financial aid arena. Submitting it puts you in the running for financial aid, including federal grants, work-study opportunities, student loans, and some state and school-based aid.
Fill it out as soon as possible because some colleges offer money on a first-come, first-served basis. In addition to the FAFSA, some schools also require you to complete a CSS Profile to be considered for aid.
2. Search for scholarships
You don’t have to wait until you’re a senior in high school to start your scholarship search. In fact, it may pay to start earlier. For example, the Evans Scholars Foundation awards full-ride scholarships to hundreds of golf caddies each year. But you have to caddy for at least two years to qualify, which means you have to start caddying during your sophomore year in high school to be eligible by the time you apply at the beginning of your senior year.
Scholarships, unlike student loans, do not have to be paid back. Thousands are available; Use the scholarship search tool to narrow your choices. While many scholarships require that you submit a FAFSA, most also have an additional application.
3. Choose an affordable school
Paying for college will be much easier if you choose a school that is reasonably priced for you. To avoid straining your bank account, consider starting at a community college or technical school.
If you choose a traditional four-year university, look for one that is generous with aid. Focus on the net cost of each school or the cost to you after grants and scholarships. Use each school’s net price calculator to estimate the amount you’ll have to pay out of pocket or borrow.
Just because a school has a lower sticker price doesn’t mean it will be more affordable for you, says Phil Trout, a college counselor at Minnetonka High School in Minnetonka, Minnesota, and former president of the National Association for College Admission Counseling. For example, if a $28,000-a-year school offers you no aid, and a $60,000-a-year college gives you $40,000 in aid, the school with the higher sticker price is actually more affordable for you.
4. Use the grant if you are eligible
A 2018 NerdWallet study found that high school graduates who don’t complete the FAFSA leave behind billions of dollars in unclaimed federal Pell Grant money.
Don’t make that mistake. As long as you submit the FAFSA and renew it every year you are enrolled in school, you will receive Pell money if you are eligible for it.
In addition to the Pell program, the federal government offers many other types of grants that do not have to be repaid. Many states also have grant programs. Use this map on the Department of Education website to find the agencies that administer Pay for college grants in your state. Then look for and apply for state grant programs for which you qualify.
5. Get a work-study job
A Pay for college job checks multiple boxes: it provides income, work experience, and potentially valuable connections. The federal work-study program funds part-time jobs Pay for college students with financial need.
To apply for work-study, submit the FAFSA. If you’re eligible, you’ll see “work-study” listed on your financial aid award. However, just because you’re eligible for work-study doesn’t mean you’ll automatically get the money. You must find an eligible work-study job on your campus and work enough hours to earn all the aid you qualify for.
6. Tap on your savings
Realistically, you’ll have to dip into your income and savings to pay for tuition, room and board, and other Pay for college-related expenses. The typical family covers 43% of college costs, according to Sallie Mae’s 2022 How America Pays for College study.
If you or your parents have saved money in a 529 plan — a state-sponsored tax-advantaged Pay for college investment account — access the funds by contacting the plan’s administrator.
7. Take out a federal loan if you have to
You don’t have to say yes to all the aid you’re offered – especially student loans. As a rule of thumb, aim for student loan payments that are no more than 10% of your estimated after-tax monthly income in your first year out of school.
If you need to borrow to pay for college, take out federal student loans before private loans. Federal loans have benefits that private loans do not, including income-based repayment plans and loan forgiveness programs.
8. Take a private loan as a last resort
If you need to use a private student loan, compare your options before you choose a lender. Shop around to find the lender that offers you the lowest interest rate and the most generous borrower protections, such as flexible repayment plans or the option to forbear your loan if you’re struggling to make payments.
Remember: After you graduate, you’ll have to pay back any money you borrowed. Many student loans — all but federally subsidized loans — accrue interest while you’re in school, which means you’ll end up paying more than you originally borrowed. You can use a student loan calculator to see how much you’ll owe later based on what you borrow now.
9. Take advantage of federal student aid
In many cases, it’s difficult to cover all of your Pay for college expenses with savings and scholarships, even if you choose a low-cost school. This is where federal student aid comes in.
When you fill out the FAFSA, your information is used to determine what type of government aid you qualify for when Pay for college. You may be able to receive grant money to help pay for school.
Federal work-study is another program that can help you with expenses. With this program, you’re guaranteed access to a job — usually on campus — that can help you keep up with Pay for college costs.
Even if you don’t qualify for government grants or federal work-study, you can get help in the form of loans. With federal student loans, you don’t have to worry about getting a credit check or a cosigner. For those in greater need, the government may even pay your interest while you attend Pay for college.
Federal student loans also come with repayment options that can cap your monthly bill at a percentage of your discretionary income.
When you’re trying to figure out how to pay for college, federal student aid can be a big help. After receiving a copy of your FAFSA, your school will send you a letter with information on what is available.
10. Consider private student loans
Sometimes private student loans can fill the Pay for college funding gap after other options have been exhausted. Not only that, but some private education loans come with lower interest rates than federal student loans.
However, it is important to understand that you will have to meet the credit requirements set by the private lender, and you may also need to find a cosigner to qualify.
Carefully consider whether private loans should be part of your plan to pay for college. These loans don’t come with the same protections as federal loans, so you may lose benefits like income-driven repayments.