Tuition and fees for the 2019-2020 school year come in at an average of $10,116 for in-state public school tuition and $36,801 for private colleges. Multiply that by at least four years of college, and you’ll quickly understand the importance of college financing.
Understanding and comparing the funding options helps you pick the best way to pay for college. Your personal situation, including your financial situation, grades, and accomplishments, can affect which types of financial aid you qualify to use.
Keep reading to explore ways to pay for college as well as tips to decide.
Getting Classes for Free
Not paying for classes is one of the best ways to complete your education for less. This option doesn’t work for everyone or every class, but you can shorten your time in college with these strategies to pay less overall.
Take Classes During High School
For current high school students, taking classes at a local community college knocks out some general education requirements for free. Some districts have agreements with local colleges where students can take classes for both high school and college credit.
The classes are typically free. Some areas may charge a fee for the college-level classes, but they may offer a discount.
Test Out of Classes
Some students have the option to test out of certain general education classes, so they complete the requirement without actually taking the class. This again shortens college time and means you have fewer classes to take, which means less tuition paid.
Students who take Advanced Placement (AP) courses in high school may earn college credit for passing the associated testing. The College Level Examination Program (CLEP) gives you credit for associated classes if you pass the testing.
Borrowing Money
U.S. student loan debt is at $1.5 trillion. Borrowing money is necessary and for many students: 59% of students who receive bachelor’s degrees borrow money for school.
Minimizing borrowing in favor of other payment methods is ideal. Paying back loans causes financial strain on some borrowers. Still, student loans can help you afford an education when you don’t have other financial aid options.
Federal Student Loans
Filling out the FAFSA allows you to apply for federal student loans. These loans typically have the lowest interest rates. Federal loans also come with multiple repayment options.
Direct Subsidized Loans are for people who meet financial need requirements. You don’t pay interest on the loan as long as you’re at least a half-time student and for six months after leaving school. You may also qualify for a deferment without interest.
Direct Unsubsidized Loans don’t require you to show financial need. You’ll pay interest on the loan from the time you take it until it’s fully paid.
Private Student Loans
Private loans usually have higher interests rates. They’re an option if you can’t fully finance your education with other sources or you don’t qualify for enough federal loans.
Private loans may have looser qualifications than federal loans. Bonsai Finance points out that some lenders may offer student loans without credit checks. Check the terms carefully to understand the interest, fees, and repayment requirements.
Parent Loans
Parents can borrow money from the federal government through Parent PLUS loans. Other types of loans, such as home equity loans, may also be an option for parents who want to borrow money to pay for their child’s college.
Getting Free Money
Money that you don’t have to pay back is the ideal way to fund college. It cuts down your bill and doesn’t put you in a financial pinch later.
Grants
Grant money funds your schooling and doesn’t need to be paid back. Many grants are based on financial need, so not everyone qualifies. Some grants are based on a special situation that applies to you.
Scholarships
Colleges and organizations offer scholarships based on grades, interests, achievements, and personal factors. You might qualify for being from a certain ethnicity or for having a parent involved in an organization.
Even small scholarships are worth pursuing to cut down the amount you owe. Earning multiple small scholarships can add up quickly.
Tuition Reimbursement
If you’re already in the working world, look into tuition reimbursement from your employer. Check the amount available and the requirements. Some businesses require you to pay back the amount if you don’t stay a minimum number of years.
Working to Earn Money
Working isn’t exactly free money. You’re exchanging your time for money. But it’s an option to pay for college without repayment.
Balancing work and school can be challenging for some college students. Be realistic about your availability and the amount you can work.
Work-Study
Work-study programs give you a part-time job to help you earn money to pay for college expenses. The job may be on campus or in the community. The program tries to pair students with jobs related to their majors.
Outside Jobs
If you don’t qualify for a work-study job, you have the option to find a part-time job to earn money. Many colleges hire students to work in various departments or dining centers.
Plan your time wisely to avoid working so much that you interfere with your study schedule. If you don’t take summer classes, consider increasing your working hours during those months to build up savings for next year’s tuition.
Prioritizing Funding Sources
Saving money on your college education is a priority. Many college students need to use multiple funding sources. You might have some money saved and receive a few scholarships but still, have more expenses to cover.
Start with a realistic calculation of the costs of your education. If you have money saved in a 529 plan or savings account, that money can go toward the costs first before you seek financing.
Focus on options that don’t require repayment to cover as much of the tuition as possible. That includes free sources of money, such as scholarships, grants, and tuition reimbursement, and jobs where you can put your paycheck toward your expenses.
If you still have college expenses that you need to borrow to cover, compare the options to find the cheapest options. Look at fees, interest rates, and repayment plans to determine the cheapest borrowing option.
Best Way to Pay for College
The best way to pay for college is the option that costs you the least amount. Many college students use a mix of options, but each person is different based on individual circumstances. Grab your copy of the FAFSA to qualify for financial aid options, and start comparing your funding options now.
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