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How to Pay for College: 16 Strategies

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Content was accurate at the time of publication.

Figuring out how to pay for college can be difficult. Finding scholarships and grants is typically time-intensive, student loans can be confusing and other financial aid opportunities — concurrent enrollment? — might slide by if you aren’t aware of them.

Turns out, there are many ways to finance your next semester. Here are 16 strategies for how to pay for college, plus how they all fit together:

1. Save money ahead of time with a 529 plan

Saving up is one of the best ways to pay for college. While you can save money using a regular savings account or taxable investment account, a 529 plan can help you gain a tax benefit as you set money aside for school: The funds can eventually be used tax-free for qualified education expenses.

The longer you have to save up, the better off you’ll be. Generally speaking, parents who started contributing to a 529 plan 10 years ago should have almost enough money in the account to pay for two years of college.

Not everyone starts saving when their children are at a young age, so it’s important to look for multiple savings strategies. Keep in mind that 529s rely heavily on stock market returns, so it’s wise to have backup savings in case of a downturn before college.

There are times when withdrawals from a 529 count as part of a student’s income when filling out the annual Free Application for Federal Student Aid (FAFSA). That said, it can make sense to put off using money from a 529 account until later in the student’s college career.

Withdrawals during freshman and sophomore years can affect financial aid awards. Run the numbers to see if it makes sense to use funding from other sources during the first two years of college.

2. Apply for scholarships

Scholarships are a form of gift financial aid because they generally don’t need to be repaid. And the internet has democratized families’ access to scholarships.

Depending on your situation, you might be able to qualify for unique awards you find online.

Check with local companies, banks and service organizations for scholarships as well.

No scholarship is too small. Even if you get $2,500 from your local credit union or $1,000 from the rotary club, that’s money you don’t have to worry about later.

Don’t forget to apply for scholarships at your choice schools — you could end up with a four-year, full-tuition offer.

Keep applying for scholarships even while you’re in college. You can get funding to help cover books, housing and other costs, even as a sophomore or junior.

An online scholarship search tool can help you find scholarships to pay for college. Here are some examples:

  • Once you sign up and create a profile, you can filter and browse through the scholarships available.
  • Fastweb has scholarships worth more than $3.4 billion. Students just need to sign up to browse for available scholarships and grants.
  • Chegg offers a number of scholarships, including thousands that don’t require you to write an essay. If you choose not to sign up, you can still browse according to your location and type of application.
  • Scholly has helped students find millions of dollars in scholarship money. Although it isn’t free, membership is available for as low as $7.99 for a one-month subscription.

3. Apply for state grants

While scholarships are usually merit-based, grants are typically awarded based on your financial need. If your family income isn’t especially high, consider state grants for college.

In Indiana, for example, there are grant programs available for:

  • Undergraduates with financial need
  • Adults returning to school
  • For attending trade schools

Like scholarships, grants are a form of gift aid that almost always doesn’t need to be repaid. You should always prioritize this type of cash for college over other options, especially student loans.

You can learn about grants available in your state by contacting its higher education authority via the Department of Education.

4. Try concurrent enrollment

Some states allow students to earn college credit for classes taken during high school. These classes are usually taught to a higher standard and credit is issued through a public university. Depending on where you live, the credits earned in this manner can be transferred to state schools.

In states like Idaho, it’s possible to complete dual enrollment credits at a lower cost. Other states, though, charge for credits. However, you might be able to get a discount on credits if you’re a high school student working on your college degree.

5. Test out of some of your classes

Consider testing out of college classes. Students can reduce the number of classes they take in college with Advanced Placement (AP) test scores.

AP classes are taken during high school. When you pass the test associated with the class, some schools will allow you to skip some general education courses, allowing you to get through college faster.

In addition to AP tests, you can also take advantage of the College Level Examination Program (CLEP) via the College Board website.

“More than 2,900 public colleges and universities in the United States will give students credit for what they already know if they pass a CLEP test,” said Steve Klinsky, the founder of Modern States Education Alliance, a philanthropic organization dedicated to making a college degree more affordable.

According to Klinsky, Modern States offers tuition-free courses that can help you pass a CLEP test. The organization’s first initiative is to help students earn a full year of college credits without the cost of tuition or books.

6. Consider a less-expensive school

Sometimes you can save money by skipping a private university and going to a four-year state school for your undergraduate degree. Your scholarship money will go further at the public college than at a private school.

Plus, if you start at a community college, you’ll save even more money while completing your education.

Community college savings on tuition and fees aren’t the only perk. Other benefits of attending a two-year school include flexible classes, personalized attention and transfer agreements.

If you start at a community college and then transfer to a four-year school as a junior, you can save a significant amount of money. In the end, an expensive big-name college might not help anyway. In many cases, an employer will likely care more about your ability to learn and less about the name of your alma mater.

Another possible shortcut is attending a trade school. That route could make sense if you’re dead set on a specific career path, and short-term degree programs or certificate-awarding bootcamps are available.

Most important? Refining skills marketable in your future career, rather than worrying about paying for an expensive university.

7. Cut down on secondary but significant college expenses

Whether you elect to attend a lower-cost school or not, choosing one closer to home could decrease living costs. Living off campus could yield savings, and staying at your family home could reduce costs to near zero.

Aside from your living situation, look to trim college expenses like food, transportation and supplies. You could ditch the car in favor of public transportation, for example, or rent textbooks instead of buying them.

Budgeting less money for these college costs could help direct more of your financial aid toward tuition and fees.

8. Ask your school for additional funding

Once you’ve settled on your school of choice, don’t necessarily settle on the initial financial aid award package.

It may behoove your family to contact your campus financial aid office and ask for more support. According to experts, there are three occasions when you could successfully negotiate your aid package:

  1. Your Expected Family Contribution pumped out by the FAFSA is no longer accurate because your household finances have changed
  2. Your academic record has improved, potentially making you a stronger candidate for school-sourced, merit-based aid
  3. You have a better offer from another school, and your preferred school could have the purse strings to keep you in the fold

If you receive aid packages from multiple schools, compare them side by side to confirm which offer is the most generous.

9. Take advantage of federal student aid

In many cases, it’s difficult to cover all of your 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 types of government aid you qualify for when paying for college. You might even be able to receive grant money to help you 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 college costs.

Even if you aren’t eligible for government grants or federal work-study, you can still get help in the form of loans. With federal student loans, you don’t have to worry about a credit check or getting a cosigner. For those with greater need, the government might even pay your interest while you attend 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 decide how to pay for college, federal student aid can be a big help. Your school will send you a letter with information about what’s available to you after getting a copy of your FAFSA.

10. Consider private student loans

Sometimes private student loans can bridge a college funding gap left 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’s important to realize that you’ll have to meet credit requirements set by the private lender, and you might even 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 could end up missing out on benefits like income-driven repayment.

11. Look into Parent PLUS Loans

Another option is to see if your parents will borrow for your education. Parent PLUS Loans are offered by the federal government and can be a way for you to get a little extra money for your education.

With these loans, your parents are responsible for repaying the debt. Parents need to go through a credit check with the government to qualify. If they have an adverse credit history, they could apply with the help of a more creditworthy endorser.

After you finish school, you might be able to refinance Parent PLUS Loans in your name to take over the responsibility.

12. Find out about income-share agreements

One of the more recent trends in paying for college is the income-share agreement (ISA). Unlike a traditional loan, there’s zero interest accruing onto what you owe.

Some schools, like Purdue University, help students set up ISAs as a form of student aid.

Depending on the situation, ISAs can be beneficial. An ISA can lessen the chance of default, and many agreements are capped at 10% or 15% of income, ensuring affordable payments.

The downside, though, is that students could end up paying more, especially if they start a career with a high-paying job. That means income-share agreements make sense for some professions over others.

Would you pay more on an ISA or a student loan?

Say you sign an ISA for eight years and 15% of your income. If you graduate and earn $50,000 a year, you’ll repay your investor $60,000. Now say you borrow $30,000 in student loans. Even with 4.45% interest, repaying $30,000 over 10 years results in a total repayment of $37,223, according to our student loan payment calculator. Be sure to do the math and research your options before signing an ISA.

13. Get a job

A part-time job can be a great way to help pay for expenses related to attending college. Many students work part time in the university cafeteria to pay for some of their living expenses. Plus, after each shift, you might get free meals, which could save you about $50 a week.

Whether you work on or off campus, having that income can help you pay for your education and potentially reduce what you need to borrow.

Additionally, you can work extra hours over the summer to earn money to put toward the coming semester. Start a side hustle if you want more flexibility in your work schedule but still want to earn money to help pay for college.

14. Seek tuition reimbursement

Instead of paying for your education on your own, get a little help from your employer. Several companies — such as Chipotle, Disney, Starbucks and Wells Fargo — are willing to help you pay for your education.

You don’t have to pay for college all on your own. You can earn money and get reimbursed for some of your tuition bills. Check with your human resources department to find out how to apply. Although you likely won’t have the entire cost covered, any help is worth having.

15. Hunt for student research positions

Students might also be able to work on certain projects as undergraduate researchers to help cover college expenses. Not only does research pay some of the bills, but it also provides real-world experience that can help students land jobs after graduation.

Look for research positions in an area you have experience. Also check with your professors and other teachers for anyone looking for undergraduate researchers. Organizations outside of your school, such as hospitals, research institutions and community-based organizations often look for students to fill research positions that are backed by grants.

16. Apply for internships

Like research positions, internships can be a way to build some real-world cred while in school. Some internships are paid, helping you cover your costs. However, paid internships can be hard to get, depending on your field.

Visit your school’s career center for information about available paid internships. It’s also possible to find a paid internship by networking with family and friends.

Keep in mind that while an unpaid internship might not help you pay for college, it could lead to a paid opportunity in the future.

How to pay for college using multiple strategies

You might have asked teachers, counselors and admissions officers about how to pay for college only to get a different answer each time. That’s partly because there are a lot of different answers.

And chances are, with the rising cost of college, you’ll need to use more than one tactic to pay for school. Many students fund their undergraduate education by attending low-cost schools and finding scholarships, federal and private student loans and part-time work.

Ensure you make the right school choice, tap savings and seek out gift aid before all else. Then try to cut expenses and ramp up income before you resort to borrowing. Work your way down our list of 16 strategies, ensuring that you combine the best of each of them before taking on debt.

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