How to Pay for College (Without Selling Your Soul)

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Last Updated:May 10, 2024

How to Pay for College (Without Selling Your Soul)

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Going to college is expensive.

But you already knew that.

Still, did you know the average yearly college tuition, fees, room, and board was $26,027 for public and $55,840 for private during the 2023-24 academic year, according to education researchers at EducationData.org?

That's per year, which means the average total cost of attendance can be more than $223,000, not including college expenses!

Your college education is an investment in yourself and, thankfully, the hefty ante doesn’t have to be paid all at once. But if you plan to going to college you’ll have to come up with the money somehow. Here's how to pay for college.

Jump To

529 Plan

The obvious place to begin is with the people who have supported you for your entire life: Mom and Dad.

Hopefully, your parents have created a 529 college savings plan for you as a child. This tax-advantage program was created so families could invest in higher education for children. Money in these accounts can only be used for education and cover tuition, fees, room and board, even off-campus housing.

If your parents started a 529 college savings plan for you as a child, this could be a big contributor to paying for college. It will be used in some ways to determine how much aid you’ll receive as this is considered a financial asset, but it has a minimal effect and will help you more than it will hurt you.

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FAFSA

Get familiar with this acronym. It stands for Free Application for Federal Student Aid, which is a form you should fill out to be considered for a financial aid package.

Aid includes federal grants, work-study programs, student loans, and financing from your state and school and you can qualify if your family's income is $50,000 a year or less.

It’s free to fill out and should be done well before the federal and state deadlines for aid, partly because some colleges award money on a first-come, first-served basis. Enrollment begins in October and is connected to your College Board; in fact, college students are required to complete FAFSA by most educational institutions.

Because states and colleges begin awarding the funds immediately, students who apply early have received twice as much as those applying later. Do not wait. You'll find the applications on the government's Federal Student Aid page.

Scholarships

Scholarships are free money that doesn’t have to be paid back, so it’s worthwhile to start looking for and applying for them as soon as you can. You don’t have to wait until your senior year in high school to start, either.

Many require submitting the FAFSA, but private scholarships will also have an additional application.

There are many ways to search for scholarships, starting with the financial aid office at the college you plan on attending. Your high school counselor, local library, and organizations related to your field of interest should also be able to help.

Scholarship amounts will be subtracted from other types of aid you might be offered so that all of your student aid doesn’t add up to more than the cost of attending college.

Grants

Grants are another aid that doesn’t have to be repaid and help you save money. They’re free money from state and federal governments.

Completing the FAFSA can open the door to federal Pell Grant money, which is typically awarded to families with less than $50,000 household income. The maximum award for 2020-21 is $6,345 but the amount you receive depends on your family's contribution to school, how much your school costs, and whether you will be attending school full- or part-time.

Other grant programs are also available, so check with your state to find out what you might qualify for.

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Loans

Student loans are the last method you want to use to pay for college, as you’ll have to repay the student loan debt after you graduate. Everything else we’ve listed is free money, and loans must be repaid.

Federal loans

Begin by applying for federal student loans. They have benefits that private loans don’t, such as income-driven repayment plans when you graduate, fixed interest rates, and loan forgiveness programs. They also do not require credit checks or co-signers.

The government offers four different loan types of college.

Direct subsidized loans. These are based on eligibility and range from $5,500 to $12,500 per year.
Direct unsubsidized loans. These are not based on financial need and range from $5,500 to $12,500 per year. Graduate students can receive up to $20,5000.
Direct PLUS loans. These loans help pay for expenses not covered by financial aid but require a credit check to qualify.
Direct consolidation loans. These combine all of your federal student loans into one single loan.

Private loans

Private loans are sometimes cheaper than federally subsidized ones, but you should shop around. Along with low rates, look for loans with protections such as flexible repayment plans or the chance to put off payments for a while if you lose your job and can’t pay them.

One of the biggest private student loan providers is Sallie Mae, which offers fixed annual percentage rates (APRs) as low as 3.99% and variable rates between 6.37% and 16.70%.
College Ave, which requires a credit score in the mid-600s and higher, offers fixed APRs between 4.49% and 16.99% and variable rates between 5.59% and 16.99%.
Funding U doesn't require a minimum credit score or a co-signer. Its fixed APRs are between 7.49% and 12.99%.

StudentPlanner.com helps students find the best loans and customize student loan plans.

Pick What You Can Afford

If your budget isn’t big enough or you don’t qualify for enough aid, choose an affordable college.

EducationData.org reports the average annual price of tuition, fees, room and board for 2019-20 as:

2-year institution at in-state rate: $3,439
4-year institution at in-state rate: $26,027
2-year institution at out-of-state rate: $33,007
4-year private non-profit college: $55,840

As you can see, a community college in your state is the cheapest option. Technical schools are inexpensive and may be all you need for your career.

Some schools may have higher prices, but they may offer more in grants, scholarships, and other financial aid to make them more affordable than colleges with a lower sticker price.

The U.S. Department of Education has a Net Price Calculator that shows how much it costs to attend an institution after subtracting scholarships and grants that don’t have to be paid back.

Each college’s or university’s website also has net price calculators to see what students like you paid the previous year.

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5.24% - 12.42% VARIABLE rate APRs 4.17% - 16.69% FIXED rate APRs

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No origination fees, late fees, and no insufficient fund fees
Flexible repayment options to help you find the right loan for you
Student loans for college, graduate, law, MBA, Health Professionals, and Parent loans
Students are 5x more likely to be approved with a cosigner
0.25% discount when you set up autopay

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The bottom line

You won't have to sell your soul to the devil to get a college education. However, you will have to do some research, invest time, and fill out a lot of paperwork to secure the funds you'll need to pay for school, but it's there. The real key is to make it happen without leaving school with too much debt.

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Aaron Crowe is a freelance journalist who specializes in personal finance writing and editing. He has worked at newspapers, where he won a Pulitzer Prize, and has written for numerous online publications. These include AOL, US News & World Report, WiseBread, Bankrate, AARP, and many websites focusing on housing, credit and insurance. He lives in California with his wife and daughter.

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