How To Pay For College: A Comprehensive Guide

Navigating the college decision process can often feel like attempting to chart a course through stormy seas. As a high school student or the parent of a child who will be eventually headed off to college, the barrage of information you’ll likely have thrown your way can be both overwhelming and confusing.

Then, there’s the question of how to pay for college.

With the average cost of college getting higher and higher with time, it’s important to equip yourself with some knowledge to offset these expenses as much as possible. According to U.S. News & World Report, the average cost of tuition and fees at ranked colleges for the 2023 – 2024 academic year ranges from $10,662 for public, in-state schools to $42,162 for private schools. Those who elect to attend a public, out-of-state school pay $23,630 on average. Broadly speaking, the cost of a college education has been steadily rising and has basically doubled over the last two decades.

The good news? It’s possible – by tapping into various resources and making wise decisions – to significantly trim the cost of a college education and make the dream of attending college a more affordable reality.

17 Ways To Pay For College

Paying for college doesn't have to be a daunting task. As you’re seeking ways to cut college costs, here are some strategies worth looking into.

1. Fill Out The FAFSA^Ⓡ

No matter how much money you make or how much you can afford to pay for college, filling out the FAFSA^Ⓡ (Free Application for Federal Student Aid) should be your first step in the journey.

The FAFSA takes a look at your financial situation – including how much you earn and what you own – to see if you qualify for key financial aid options such as Pell Grants, work-study programs or Stafford Loans.

The FAFSA might seem overwhelming at first glance, but sticking with it can pay off. The application period opens every October, and completing the FAFSA as soon as possible gives you a better chance of maximizing the aid potentially available to you or your child.

2. Choose The Right School

Choosing the right college is a delicate balance that requires considering academics, financial feasibility, your career goals and perhaps even factors such as weather and proximity to your home. Some private institutions boast generous financial aid packages that can make them more affordable than state universities once the aid is factored in. Stanford University, for example, offers full-ride packages to students from families of certain income levels (with no student loans required).

When the acceptance letters start rolling in, don’t just consider the school’s reputation; weigh the financial aid packages that are available to many or all who attend.

Schools run the gamut in terms of the financial aid they offer, so while private schools typically have a higher “sticker price,” it’s important not to focus on sticker price alone.

3. Apply For Scholarships

Don’t underestimate the power of scholarships – perhaps the best way to pay for college. High academic achievers, artists, athletes and those who possess any number of talents may be able to find a scholarship opportunity. You don’t need to have a 4.0 GPA or be valedictorian of your high school class to qualify.

With a quick Google search, you can find an extremely wide array of scholarships. Use scholarship databases to filter through options, and be sure to pay close attention to all the application deadlines.

4. See If You Qualify For Grants

Like scholarships, grants are financial aid unicorns – they don’t need to be repaid. For families with a financial need, grants can significantly reduce their out-of-pocket costs for college.

While federal Pell Grants are probably the most well-known grants, many colleges also offer institutional grants based on financial need. Certain states also offer grants to residents; for example, the New York State TAP (Tuition Assistance Program) provides up to $5,665 in financial aid per year per student.

5. Land A Work-Study Job

Federal work-study programs offer on-campus jobs to help students earn money they can put toward their education. These initiatives not only provide hands-on experience, but they also typically bend to fit a student’s class schedule.

6. Ask Your Employer About Assistance

Some employers offer tuition assistance programs as an employee benefit. Securing a position with a company that foots the bill for your studies can be a game changer for someone still hoping to earn their degree.

In some cases, parents may be able to apply these discounts to their children’s education, too.

So, if you – or your parents – are on the hunt for a job, consider looking for this benefit on employers’ websites as you go about your search.

7. Tap Into A 529 College Savings Plan

While this tip won’t provide immediate help if you’re planning on attending college in the near future, a 529 college savings plan allows you to put aside college money that grows tax-free.

This kind of plan offers a variety of investment options and is an effective way to save, with few tax implications. So, if you’re a parent who’s starting to think about your child’s education, this might be a good option for you.

Consider starting a 529 plan as early as possible to take full advantage of the compound interest. Even modest contributions can grow substantially over time – and no amount is too small.

8. Request A Financial Aid Appeal

When you complete the FAFSA, you’ll be using documentation from 2 years prior. For example, if you were completing the FAFSA for the 2024 – 2025 school year, you’d use tax returns from 2022.

If your financial situation has drastically changed since the FAFSA filing, don’t hesitate to submit a financial aid appeal. Schools can make adjustments based on new circumstances, such as a job loss or another change in the family finances.

Your appeal should be well-documented and make a compelling case for reconsideration. Be prepared to provide any necessary documentation to support your appeal.

9. Earn AP, IB And Dual Enrollment Credits

If you’re a high school sophomore or junior thinking about how you’ll pay for college, consider your course load. Accelerated programs can save both time and money. AP and IB courses often translate to college credits, while dual enrollment programs allow you to earn college credits while still in high school.

These programs can reduce the overall number of credits you need to graduate from college, shaving off both time and tuition costs.

10. Take Prior Learning Assessments

Some colleges offer credit for knowledge you’ve previously acquired through work or life experience. These assessments can accelerate how quickly you earn your degree, ultimately saving you money.

Most schools will rely on challenge exams or portfolios as tools to prove your mastery. Successfully completing them can mean fewer credits to pay for and less time in the classroom.

11. See If You’re Eligible For Regional Tuition Exchange

Certain geographical regions offer exchange programs that allow students to attend out-of-state colleges at a discounted rate. For example, the Western Undergraduate Exchange lets West Coast students pay reduced tuition at participating institutions.

12. Consider ROTC

ROTC programs offer financial assistance for education. From tuition to living stipends, these programs provide a comprehensive package to aspiring servicemen and servicewomen.

If you don’t plan to pursue a career in the military, ROTC might not be the right choice for you, but if you want to join the armed forces, this could be a good way to enjoy the best of both worlds.

13. Take Out Student Loans

Student loans are often vilified, but federal student loans can be a smart investment in your future, as they offer relatively low interest rates and flexible repayment options.

Here are the types of student loans available:

• Direct subsidized loans: These loans are for undergraduate students with a legitimate financial need that they can clearly demonstrate. The government pays the interest on these loans while you’re in school at least half-time, during the 6-month “grace period” after leaving school, and during any deferment periods when you’re not making loan payments.
• Direct unsubsidized loans: These loans are for both undergraduate and graduate students. Unlike direct subsidized loans, however, you don’t need to demonstrate financial need. Also different from direct subsidized loans, you’ll be responsible for paying interest throughout.
• Direct PLUS loans: Created for graduate or professional students and parents of undergraduates, these loans help pay for education expenses that other financial aid doesn’t cover. Also worth noting: PLUS loans come with a credit check and an annual borrowing limit.

Private loans can help fill the gap after all other financial aid options have been exhausted, but these loans should be approached with caution because they have higher interest rates and fewer borrower protections.

Know the facts about any loans you’re getting. Federal loans offer more favorable terms, but private student loans can be a reasonable option when used responsibly.

14. Get A Loan From A Family Member

If you’re considering a loan, family members may offer better terms and more flexibility than traditional lenders. Be sure to treat these loans seriously, though, and maintain open lines of communication with your family lender.

It’s best to agree on loan terms and have a clear repayment plan in place to avoid any family tension. Ultimately, you should use the same care with a family loan that you would with a traditional loan.

15. Sign Up For The Peace Corps Or AmeriCorps

Programs such as the Peace Corps and AmeriCorps offer stipends and educational awards that can be used for past or future education.

Outside of the financial benefits, participants have the chance to make a positive impact on communities, develop valuable skills such as leadership, cross-cultural communication and project management, and gain a broader perspective on global and domestic issues.

16. Get A Payment Plan

Many colleges offer payment plans that allow students to spread out the cost of tuition over the semester. While not a form of aid, such a plan can make budgeting for your education more manageable.

The beauty of a payment plan is that it can help you avoid large lump-sum bills, particularly if you’re working to cover costs as you go.

17. Think Outside The Box To Lower Costs

With college funding, creativity can pay off. Think about crowdfunding, negotiating with schools, seeking out underutilized scholarship categories, or even establishing a micro-business.

There are always unconventional options worth exploring. For example, getting an apartment off campus with friends, instead of living on campus, can allow you to save on housing costs and make a big difference in the amount of money you spend on college-related expenses depending on where you attend college.

It’s possible that the seemingly most outlandish ideas could turn out to be the most rewarding – both financially and personally.

The Bottom Line: College Doesn’t Have To Cost A Fortune

As college costs continue to tick up, it’s wise to approach the payment process strategically – and with a broad perspective. Leave no stone unturned and utilize at least several of the strategies discussed in this guide to create a personalized payment plan that aligns with your academic goals and financial circumstances.

If you’re ready to take action, sign up for the Rocket Money℠ app. It offers a suite of financial management tools and educational resources designed to help you chart your financial course. Start making your college dreams a tangible – and affordable – reality.