How to pay for college in the U.S.
If you’re like most students and their families, you’ll need to raise funds from a variety of sources. Some types of financial aid are better than others, so use the following tips in that order when planning how to pay for college:
1. Complete the FAFSA
Fill out the Free Application for Federal Student Aid, even if you don’t expect to get aid, says Ben Miller, senior director for higher education at the Center for American Progress. The FAFSA is your ticket to the world of financial aid. If you file it, you’ll be eligible for financial aid, including federal grants, tuition opportunities, student loans, and some state and school aid.
File the FAFSA as early as possible, as some colleges award funds on a first-come, first-served basis. In addition to the FAFSA, some schools also require you to complete the CSS Profile to be considered for aid.
2. Searching for scholarships is a good option
You don’t have to wait until you are a senior to start looking for scholarships. In fact, it might be worth starting earlier. For example, the Evans Scholars Foundation awards full golf scholarships to hundreds of cadets each year. But to be eligible for a scholarship, you have to work as a caddie for at least two years, which means you have to start working as a caddie no later than your sophomore year in high school to be eligible for a scholarship at the beginning of your senior year.
Unlike student loans, scholarships do not have to be repaid. There are thousands available; use the Department of Labor’s scholarship search engine to get started. Although many scholarships require you to file a FAFSA, most have an additional application.
3. Choose an affordable college
Paying for college will be significantly easier if you choose a school that is reasonably priced for you. To save your bank account, consider starting at a community college or a technical or trade school.
If you decide to a traditional four-year university, look for one that is generous with aid. Look at each school’s net price – that is, the price you’ll pay after receiving grants and scholarships. Use each college’s net price calculator to figure out how much you’ll need to pay out of pocket or take out a loan.
Just because a school’s price is lower doesn’t mean it will be more affordable for you, says Phil Trout, a college counselor at Minnetonka High School in Minnetonka, Minnesota, and a past president of the National Association for College Admission Counseling. For example, if a college with a $28,000 annual fee offers you no aid and a college with a $60,000 annual fee offers you $40,000 in aid, the college with the higher sticker price is actually more affordable for you.
4. Use scholarships, if eligible.
The class of 2021 lost $3.75 billion in federal Pell Grants because it didn’t fill out the FAFSA, according to a study by the National Network for Postsecondary Education.
Don’t make that mistake. If you file the FAFSA and renew it every year you are enrolled in college, you will receive a Pell Grant if you are eligible.
In addition to the Pell Grant program, the federal government offers other types of scholarships that in most cases also do not have to be returned. Many states also have grant programs. Use the Department of Education’s Find State Education information and contacts website to locate the agencies in your state that administer college grants. Then search and apply for the state scholarship programs for which you may qualify.
5. Get a job training
A college job has many benefits: it provides income, work experience, and potentially valuable contacts. The federal Work-study program funds part-time jobs for college students with financial need.
To apply for a work-study scholarship, submit the FAFSA. If you are eligible, you will see the word “work-study” on your financial aid award decision. Just because you qualify for work-study doesn’t mean you automatically get that money. You must find a suitable job on campus and work enough hours to get all the aid you are eligible for.
6. Use your savings
Realistically, you will probably have to dip into your income and savings to pay for tuition, room and board, and other college-related expenses. According to Sallie Mae’s 2022 “How America Pays for College” study, the typical family covers 43% of college costs this way.
If you or your parents have saved money in a 529 plan – a state-sponsored tax-advantaged college investment account – access the funds by contacting the plan administrator.
7. Take out federal loans if necessary
You don’t have to say yes to every offer of aid, especially student loans. As a general rule, try to keep your student loan payments to no more than 10% of your expected after-tax monthly income during your first year of study.
If you must take out a loan to pay for college, take out federal loans, not private loans. Federal loans have advantages that private loans do not, such as access to income-based repayment plans and loan forgiveness programs.