How to Pay for College: 6 Strategies

There are many avenues you can take to pay for college. Most students use a combination of grants, scholarships, savings, and student loans to make their educational dreams a reality. In this article, we’ll assess a variety of options available to help pay for college so you can make an educated decision for your future.

How to Pay for College Without Loans

Paying for college is no easy feat. Savings, scholarships, and grants are some of the tools you can use to prevent the need for student loans. Let’s take a look at ways to pay for college that don’t include borrowing money.

Find Scholarships

Take the time to locate and apply to scholarships you qualify for. Scholarships are a form of gift aid, which means it is money that does not need to be repaid. Each year more than $7 billion dollars is awarded in scholarship funds, but you can’t get a scholarship if you don’t apply. We recommend using a scholarship search site like our site StudentScholarshipSearch.com to locate gift-aid opportunities you qualify for.

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It’s not uncommon for scholarship applications to require an essay. Keep track of the scholarships you are applying for and their due dates to ensure you don’t miss out on your opportunity to apply. Also, keep your scholarship essays handy. You may be able to reuse some portions for other scholarship applications.

>>>More: How to Write and Proofread Scholarship Essays

While some scholarships you locate may require an essay there are also no-essay scholarships available, such as the scholarships offered on our site ScholarshipPoints.com. We give away one $2,500 and three $1,000 scholarships every month.

Explore Grants

Grants are another form of gift-aid students may receive to help pay for college. The most common grant is the Pell grant, awarded by the U.S. Government. You must file the FAFSA® to be considered for a Pell grant. Many grants are need-based awards, and the Pell grant is no exception. The amount of Pell grant you qualify for will be determined by factors such as your family’s income. The current maximum for a Pell grant is $6,895 .

>>>More: Federal Grants

Pell grants aren’t the only type of grants available to students. Ask your financial aid office about institutional grants or other grants you may qualify for. And don’t forget to check out your state grant options! While many state grants only require the FAFSA, some grants may require an additional application.

>>>More: Find State Grants

Tuition Payment Plans

Tuition payment plans are a great way to avoid taking out student loans. With a tuition payment plan you make a number of payments at different intervals as set by the college. This allows you to save and pay as you go. Talk to your financial aid office to see if a tuition payment plan is an option for you.

>>>More: About Tuition Payment Plans

Work-Study

A federal work-study job provides part-time jobs to undergraduate and graduate students with demonstrated financial need. To qualify for a work-study position, you must first file the FAFSA.

Work-study positions afford students in need a means of earning money to help pay for their education expenses. The jobs may be on or off campus. If you work on-campus, you will likely be working for the school. Off-campus positions are typically with a non-profit or public agency and must provide work performed in the public interest. One benefit of a Federal Work-Study job, money you earn working your Federal Work-Study job is excluded on your FAFSA. Other types of employment may be counted as earned income on your FAFSA which may have an impact on your expected family contribution. Contact your school’s financial aid office to find out if they participate in the Federal Work-Study program.

>>>More: About Federal Work Study

Tap Into Savings

Now is the time to assess your savings account to find out what you can afford to spend on your education. We recommend using savings before borrowing federal or private student loans. This is because student loans require you to pay interest, costing you more in the long run than paying for your school up front.

Taking savings to the next level, you may want to go beyond evaluating your current savings account balance. It’s recommended that you continue to save! If you are still working before your classes start or plan to work while you’re in college, set some savings goals. If your employer gives you an option to direct deposit your paycheck to more than one account, have a certain amount placed in your savings account—making this automatic makes it easier! If that’s not an option, it may be best to have your paycheck deposited to your savings account first and then transfer* your spending money to your checking account.

*Remember to read the terms and conditions of your bank account, you may be limited on the amount of time you can transfer money each month.

Attend an Affordable College

This is one option that some students don’t like to hear, but it’s important to assess whether or not you are planning to attend a school that is beyond your means. If you find yourself in a position where you will need to borrow tens of thousands of dollars per year, this college is likely beyond your means. Look to community colleges and state run schools in your home state for more affordable options.

>>>More: How to Choose a College: Making a College List and Comparing Schools

Attend College Part Time

Attending college part-time increases the amount of time it takes you to earn your degree, but is also easier to cash-flow, meaning pay as you go. Not only does attending college part-time make college more affordable, but it will also free up your calendar to work and save more for your education, helping to prevent graduating college with debt.

Seek Tuition Reimbursement

If you are working while attending school, find out if your employer offers tuition reimbursement. Tuition reimbursement plans vary by employer but typically will cover up to a set dollar amount per year and may have requirements such as one year of employment, or receiving a certain minimum grade in order to qualify.

Not only can you earn money toward paying for your education, but you may be able to get some or all of your investment back in the form of tuition reimbursement if you qualify.

>>>More: Some Employer Benefits Help You Pay for College

How to Pay for College with Loans

Many students require loans in order to pay for school. In fact, according to Investopedia, 54% of college students take on debt. When paying for college with loans it’s important to remember to borrow only what you need. This will help to prevent excessive student loan debt.

There are two types of student loans available to students. Federal student loans and private student loans. We recommend always exhausting federal student loan options before taking out private student loans.

In order to apply for federal student loans, you must first file the FAFSA.

File the FAFSA

The first step in paying for college with loans is to file the FAFSA. Filing the FAFSA is the only way to receive federal student loans (and grants). You may file the FAFSA each year on or after Oct 1 for the upcoming academic year. We recommend filing the FAFSA as early as possible to qualify for the maximum amount of aid.

To learn more about the FAFSA, we have a FAFSA Guide to help you through the most important financial aid application.

>>>More: What is Financial Aid?

Paying for College with Federal Student Loans

There are three types of federal student loans you are likely to encounter: Direct Stafford Subsidized, Direct Stafford Unsubsidized, and Direct PLUS Loans. Federal student loans come with generous periods of deferment and forbearance, as well as potential eligibility for income-driven repayment plans and Public Service Loan Forgiveness. Private student loans do not offer the same benefits. That is why we recommend at least reviewing your federal student loan options before considering private student loans.

>>>More: Student Loans for College

Paying for College with Private Student Loans

Private student loans exist to fill in the gap when other financial aid comes up short. They may also be a good alternative to PLUS Loans for borrowers with excellent credit. That is because the lowest available rates on private student loans, are lower than the fixed rate on PLUS Loans, and most private student loans do not charge an origination fee.

Private student loans come with competitive interest rates based on market trends. The interest rate you qualify for will depend on the creditworthiness of the borrower and their cosigner if applicable. Students applying for a private student loan will likely need a creditworthy cosigner to qualify. Those applying (and their cosigner, if applicable) will need a FICO® score of at least 680 in most instances, and at least two years of stable employment in order to qualify without a cosigner.

Instantly Compare Lenders

A private student loan may come with a fixed or variable rate. A fixed rate will remain unchanged over the life of the loan. A variable rate may change over the life of the loan, meaning your payments may go up or down as interest rates fluctuate.

>>>More: Best Private Student Loans for College

Private Student Loan vs PLUS Loan

Private student loans may be a good alternative to PLUS Loans for borrowers with excellent credit history and stable employment. This is because private student loans offer competitive interest rates based on market trends and the creditworthiness of the borrower. That means you may qualify for a lower interest rate on a private student loan than a PLUS loan. Most private student loans also come with no origination fees, and no prepayment penalties for paying the loan back early.

PLUS loans have a fixed interest rate for all qualified borrowers regardless of credit. There is a credit check required to borrow PLUS loans, but this credit check is not as stringent as that of a private lender. If you do not qualify on your own for a PLUS loan, you can apply with an endorser. PLUS Loan have no prepayment penalty, and come with an origination fee of 4.228 (for loans first disbursed on Oct. 1, 2022 through Sept. 30, 2023).

>>>More: Compare Private vs PLUS Loans

Student Loan Cosigners

A student loan cosigner is a co-borrower who agrees to be equally responsible for your student loan should you fail to pay. A good cosigner will have excellent credit, stable employment, and no recent bankruptcies. It’s not uncommon for student borrowers to need a cosigner on a private student loan. Cosigners are often a parent, spouse, other family member, or trusted friend.

When comparing private student loan lenders , you may want to look for a lender that offers cosigner release. This allows you to release the cosigner from responsibility for the loan after a series of on-time, consecutive payments, typically 12 to 48 months.

Best Private Parent Loans for College

Recommendation

Best for Private Loans

Repayment Terms

5, 8, 10 or 15 years²

Interest Rates

Variable rates as low as: 4.99% APR¹

Fixed rates as low as: 4.44% APR¹

Apply Now More Info

Competitive fixed and variable APRs starting at 4.44%¹
Multiple repayment options including: full principal and interest, interest-only, deferred, and flat payment
Flexible payment terms ranging from 5, 8, 10, and 15 years²
Coverage up to 100% of your school-certified cost of attendance ($1,000 minimum)³
No origination, application and processing fees, no fees for early repayment
Apply online in 3 minutes and get an instant credit decision
Applying with a cosigner can increase your chances of getting approved and could result in a lower interest rate

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

¹Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.

²This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

³As certified by your school and less any other financial aid you might receive. Minimum $1,000.

Information advertised valid as of 05/01/2023. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

Cosigner Recommended

Recommendation

Best for Private Loans

Repayment Terms

10-15 Years⁶

(undergraduate)

Interest Rates

Variable Rates: 5.99% APR - 16.33% APR¹

Fixed Rates: 4.50% APR - 14.83% APR¹

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Variable Rates: 5.99% APR - 16.33% APR. Fixed Rates: 4.50% APR - 14.83% APR. Lowest rates shown include 0.25% interest rate discount with auto debit payments.¹
Apply online in minutes and receive an instant credit result²
Multiple repayment options from in-school payments to deferred.¹ No origination fee or prepayment penalty³
Last year, students were 3x more likely to be approved with a cosigner⁴ and it may help you get a better rate.
Borrow up to 100% of school-certified expenses, whether you're online or on campus⁵

Borrow Responsibly

We encourage students and families to start with savings, grants, scholarships, and federal student loans to pay for college. Students and families should evaluate all anticipated monthly loan payments, and how much the student expects to earn in the future, before considering a private student loan.

Loans for Undergraduate & Career Training Students are not intended for graduate students and are subject to credit approval, identity verification, signed loan documents, and school certification. Student must attend a participating school. Student or cosigner must meet the age of majority in their state of residence. Students who are not U.S. citizens or U.S. permanent residents must reside in the U.S., attend school in the U.S., apply with a creditworthy cosigner (who must be a U.S. citizen or U.S. permanent resident), and provide an unexpired government-issued photo ID. Requested loan amount must be at least $1,000.

¹Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment.

²In 2022, instant credit decisions were provided to 97.8% of applicants. Other applications typically received credit decisions in 3 to 5 business days.

³Although we do not charge a penalty or fee if you prepay your loan, any prepayment will be applied as outlined in your promissory note-first to Unpaid Fees and costs, then to Unpaid Interest, and then to Current Principal.

⁴Based on the percentage of borrowers who were approved for an undergraduate loan with a cosigner compared to the percentage of borrowers who were approved for an undergraduate loan without a cosigner from October 1, 2021 through September 30, 2022.

⁵ For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website may be subjected to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time.

⁶ Examples of typical costs for a $10,000 Smart Option Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment may receive a loan term that is less than 10 years.

Information advertised valid as of 05/25/2023.

SALLIE MAE RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS, SERVICES, AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SALLIEMAE.COM FOR THE MOST UP-TO-DATE PRODUCT INFORMATION.

Smart Option Student Loans® are made by Sallie Mae Bank. Sallie Mae, the Sallie Mae logo, and other Sallie Mae names and logos are service marks or registered service marks of Sallie Mae Bank. All other names and logos used are the trademarks or service marks of their respective owners.

Edvisors is not the creditor for these loans and is compensated by Sallie Mae for the referral of Sallie Mae loan customers.

Recommendation

Best for Private Loans

Repayment Terms

5, 7, 10, 12 and 15 years

Interest Rates

Variable rates as low as: 6.16% APR¹

Fixed rates as low as: 4.62% APR¹

Apply Now More Info

Recommendation

Best for Private Loans

Repayment Terms

Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget

Interest Rates

Variable rates as low as: 4.99% APR (with autopay)^*

Fixed rates as low as: 4.49% APR (with autopay)^*

Apply Now More Info

Variable Rates: Starting variable rates range from 5.16% APR - 13.13% APR (with autopay)^*, and will never exceed 13.95% (sometimes lower in certain states as required by law)
Fixed Rates: Fixed rates range from 4.49% APR to 13.98% APR (with autopay)^*
Easy online application!
No origination fees, late fees, and no insufficient fund fees. Period
Up to four repayment types (including no payments while in school) and multiple repayment terms help you find the loan that fits your budget
0.25% discount when you set up autopay^*

*UNDERGRADUATE LOANS: Fixed rates from 4.49% to 13.98% annual percentage rate ("APR") (with autopay), variable rates from 5.16% to 13.13% APR (with autopay). GRADUATE LOANS: Fixed rates from 5.25% to 13.60% APR (with autopay), variable rates from 5.79% to 13.07% APR (with autopay). PARENT LOANS: Fixed rates from 6.50% to 13.98% APR (with autopay), variable rates from 6.32% to 13.13% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 04/28/2023.

Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or other eligible status and meet SoFi's underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, evaluation of your creditworthiness, years of professional experience, income, and a variety of other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

How to Pay for College Without Parents

Not all students have parents who are willing to help pay for college. This may make getting a private student loan difficult, but federal student loans may still be an option.

Federal Student Loans

Unlike private student loans, federal student loans do not require a cosigner. This means, students can get federal student loans without the assistance of their parents. In order to receive federal student loans, you must first file the FAFSA. If you are considered a dependent student, your parent’s information will be required to complete the FAFSA.

If your parent refuse to assist you with completing the FAFSA, you may request a dependency override or a professional judgement from your school’s financial aid office. The decision to grant a dependency override or a professional judgement is up to the discretion of your school.

Income Share Agreements

An income share agreement is an alternative to a student loan that does not require a cosigner. This is basically a contract you sign to receive the money you need to pay for school in exchange for a percentage of your future salary for a set period of time. You will not be charged interest, however your payments will be a fixed percentage of your income. That means as you income increases, your payments will increase regardless of how much you originally borrowed until your repayment term is over.

Apply for a Stride Funding ISA

Income Share Agreement

Recommendation

Best for Private Funding

Repayment Terms

Payments based on a fixed percentage of future income for up to 60 months after graduation

Only pay when earning more than the $30,000 minimum income threshold.

Payments stop early if you ever hit the payment cap (2.0x your initial funding amount)

Interest Rates

Payments based on a fixed percentage of future income.

Lower (or no) payments when you're unemployed or underemployed.

Apply Now More Info

How to Pay for College with Financial Aid

To pay for college with financial aid you will first need to file the FAFSA. Filing the FAFSA is necessary in order to receive federal student aid such as subsidized and unsubsidized loans, PLUS loans, and work-study.

Depending on your college you may also need to file the CSS Profile to determine aid eligibility.

Once your college has determined your financial aid eligibility you will receive an award letter with the types of loans and grants you qualify for. Here are the most common loans and grant you’ll encounter from the federal student aid program.

Direct Subsidized Student Loan

Direct Subsidized Loans are need-based loans from the federal government. With a subsidized loan, the government pays the interest on your loan while in school, during your grace period, and during periods of authorized deferment.

Direct Unsubsidized Student Loan

Direct Unsubsidized Loans are non-need-based loans from the federal government. With an unsubsidized loan, you are responsible for the interest that accrues while in school, during your grace period, and during authorized periods of deferment.

Federal Pell Grant

The Pell Grant is a federal grant awarded to students with financial need. If you qualify for a Pell Grant, the amount you receive will be determined based on need. The current yearly maximum for a federal Pell Grant is $6,895

>>>More: Student Loan Limits

Non-Federal Financial Aid

While federal student aid offers some of the more common types of aid, you may be eligible for financial aid that is considered nonfederal aid. When you complete the FAFSA, the information you provide on that application can also be used to help qualify you for state and institutional aid.

We recommend that you take the time to review your state and institutional aid options to make sure you don’t miss out. Like we said before, some state and institutional aid may only require you to complete the FAFSA, however, some states and schools may ask for additional financial aid applications. By not taking this extra step, you could miss out on valuable financial aid.

A common application asked for by some schools is the CSS Profile™. This application is offered by the College Board, and there could be fees to complete (there could be a waiver option for those with financial need). If your school requires you to submit a CSS Profile, make sure to submit that application by your school’s deadline.

>>>More: State Grants

How to Pay for College Without Financial Aid

Savings

Tapping into savings to pay for college is an investment in your future. While it may or may not be enough to cover your entire tuition, if you are able to contribute some of your savings to help you pay for college you may reduce the amount you need to borrow.

>>>More: 529 Savings Plans

Tuition Payment Plans

Many colleges offer tuition payment plans, allowing students to make a set series of payments on a predetermined schedule. With a tuition payment plan, your entire tuition isn’t due at once, allowing you time to save up for each installment.

Attend Part-Time

One way to pay for college without financial aid, is to pay as you go. It may tack a little time on to obtaining your degree, but you will graduate debt free. If you’re working while in school, don’t forget to ask your employer if they offer tuition assistance or reimbursement (or seek out an employer that offers this benefit).

>>>More: How to Pay for College Without Financial Aid