How to Pay for College: 7 Ways to Fund Your College Tuition
With the average college tuition increasing every year, potential students are wondering how to pay for college without loans or financial aid.
This is even more important if we consider that during the last decade, the average cost of tuition has more than doubled, with private college tuition now averaging $39,723.
The average cost for out-of-state students at public colleges is $22,953 compared to public, in-state tuition at $10,423.
But when it comes to payment, there is no best way to pay college tuition. You’re likely to find funds from many sources if you’re like most students or families and there are some types of financial assistance that are more effective than others.
Here are a few ways to pay for college:
Complete the FAFSA
Ben Miller, senior director of postsecondary education at the Center for American Progress, advises you fill out the Free Application for Federal Student Aid (FAFSA), even if your goal is to not be eligible for any aid.
You can get into financial aid by filling out the FAFSA. It will allow you to be considered for financial aid, including federal grants, work-study options, student loans, and some state- and school-based aid.
It is important to complete it as soon as you can, as colleges often give money on a first-come, first-served basis. To be eligible for aid, you will need to complete the CSS profile.
To start your scholarship search, you don’t need to wait until graduation to begin. It could be beneficial to begin your scholarship search earlier than you think.
The Evans Scholars Foundation, for example, awards full-ride scholarships each year to hundreds of caddies.
To be eligible, you must have been a caddie for at least 2 years. This means that you would have to begin caddying in your sophomore year of high school.
Scholarships are not like student loans and don’t need to be repaid. There are thousands of scholarships available; many scholarships require you to submit the FAFSA, however, many others will also require an additional application.
Use grants if you qualify
According to NCAN, high school graduates who failed to complete the FAFSA left behind $3.75 billion in unclaimed federal Pell Grant money.
Don’t make the same mistake. If you are eligible, Pell money will be awarded to you as long as you complete the FAFSA each year that you are enrolled at school.
The federal government offers many grants that don’t require repayment, in addition to the Pell grant program. There are grant programs in many states.
To find out which agencies administer college grants in your state, use the map from the Education Department website. Next, search for state grant programs that you might be eligible for and then apply.
Work-study jobs available
Jobs that pay for college offer a variety of benefits: They provide income, work experience, and possibly valuable connections.
Part-time work is possible for students in financial need through the federal Work-Study program.
Jobs. You’ll see the word “work-study”, if you are eligible, on your financial aid award. But just because you are eligible for work-study does not mean that you will automatically receive the money.
Find a work-study position on campus that qualifies and put in enough hours to receive all the aid you are eligible for.
You’ll likely have to draw on your savings and income to pay tuition, room, and other college-related costs. According to Sallie Mae’s 2021 How America pays for College study, the average family can cover 45% of college expenses that way.
Contact the administrator of the 529 plan if you or your parents have saved money in a tax-advantaged college investment plan.
If you need federal loans, take them
If you’re out of options, consider borrowing federal student loans. They have low interest rates, especially if you’re an undergrad student. You may also qualify for subsidized loans if you’re an undergraduate student in financial need.
To apply for a federal loan, you’ll still need to fill out a FAFSA. There is no credit check and you can decide how much you want to borrow when you receive your financial aid award letter.
A good rule of thumb is to aim for student loan payments not exceeding 10% of your projected after-tax monthly income in your first year of college.
Consider private loans
Compare your options before you decide on a lender if you need private student loans. Compare your options to find the best lender, with the lowest interest rate and the best borrower protections. For example, flexible repayment plans or the ability to forbear your loans if you are having trouble making payments.
Don’t forget: Once you graduate, any money borrowed will have to be repaid. All student loans, except federally subsidized loans, accrue interest during your time in school.
This means that you will have to repay more of what you borrowed. To see how much you will owe in the future, you can use a loan calculator based on what you borrowed now.