5 ways to pay for college

Scholarships, grants, and student loans can help cover the expense of attending college.

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The price of a college degree continues to rise, making it hard for some people to afford. Here’s how to pay for college. (Shutterstock)

It’s no secret that college education costs continue to rise. During the 2019-20 school year, tuition and fees at a public, four-year university averaged $9,400, according to the National Center for Education Statistics. This is a 13% increase from the 2010-11 school year, when the average costs were $8,300.

Despite the rising costs, most college graduates believe their degree is worth it. And fortunately, several options are available to make college more affordable. Here are five ways to pay for college.

If you need private loans to help fund your college education, visit Credible to see your prequalified student loan rates from various private lenders, all in one place.

Tips to cut college costs

Before you come up with a plan for how you’ll pay for college, take time to figure out what your education expenses will be. In addition to tuition and housing, you’ll need to buy books, supplies, and equipment like a laptop.

Whether you plan to commute to school or live on campus, you’ll need to factor in transportation costs. And depending on the school you attend, you may have to pay additional fees.

With that in mind, here are a few ways you can lower your college costs:

  • Choose a more affordable school. One of the easiest ways to save on tuition costs is by starting out at a community college. Once you complete two years, you can transfer to a four-year university.
  • Consider living at home. Living on campus can be expensive, so you can save quite a bit of money by living at home during college. Or you can choose to live off-campus and share an apartment with a roommate.
  • Look for ways to save. While you’re in school, look for additional opportunities to save money. For example, you might consider renting your textbooks or carpooling to school to save money on gas.

After you’ve exhausted your federal financial aid options, private loans can help fill any gaps in your education costs. With Credible, you can quickly and easily compare student loan rates from private lenders.

5 ways to pay for college

Once you’ve identified some strategies for lowering your college costs, you can begin thinking about how you’ll pay for school. Let’s look at five strategies for how to pay for college.

1. Complete the FAFSA first

The Free Application for Federal Student Aid (FAFSA) is a form you’ll fill out to qualify for federal aid. Submitting the FAFSA helps you qualify for things like financial aid, federal grants, work-study programs, and more. 

The deadline for submitting the FAFSA for the 2022-23 academic year is June 30, 2023, but you’ll want to fill it out as soon as possible. Federal aid is disbursed on a first-come, first-served basis, so if you put this off, you could miss out on vital opportunities to pay for school

Even if you don’t think you’ll qualify for financial aid, it’s still a good idea to complete the application. Schools look at the FAFSA when making financial aid decisions for scholarships and grants they award.

2. Find scholarships and grants

If you’re trying to figure out how to pay for college without loans, you should look for as many scholarships and grants as possible. Students don’t have to repay scholarships, and thousands are available through schools, employers, nonprofits, and community groups. 

Scholarships are available for a variety of different purposes. Some are merit-based, so you can earn them for things like academic achievements. Need-based scholarships, which are awarded based on financial need, are also available. 

You can use a free tool to search for scholarships, like those on CollegeBoard or Scholly. You can also contact the financial aid department at the school you’re planning to attend to ask about scholarship opportunities. 

Grants are another source of financial aid that you don’t have to repay. They’re available through the federal and state government, your school, and nonprofit organizations. For example, federal Pell Grants are available to undergraduate students that can demonstrate financial need.

3. Get a federal work-study position

Federal work-study positions provide students with part-time jobs while they’re in school. These positions are usually reserved for students with some type of financial need and can take place on or off campus.

These positions are available for full-time and part-time students. Your college administers the work-study program, so you’ll need to contact your school’s financial aid office to find a program you’re eligible for. 

If a federal work-study position isn’t an option, you can find other ways to earn money while you’re in school. You can look for opportunities to work as a research assistant, take on a paid internship, or take a part-time job off campus.

4. Take out federal student loans 

Once you’ve maximized the grants and scholarships that are available to you, you’ll want to look into federal student loans. These loans are available through the U.S. Department of Education, and they must be repaid. 

Three main types of federal loans are available: 

  • Direct Subsidized Loans — Available for undergraduate students who are in a state of financial need. As long as you’re enrolled in school part-time, the federal government will pay for the interest on your loans until six months after you graduate.
  • Direct Unsubsidized Loans — These loans are available to all undergraduate and graduate students, whether or not they have a financial need. But you’re responsible for the interest that accrues on your student loans while you’re in college. You can make interest-only payments while you’re in school or have this interest added to your principal loan balance.
  • Direct PLUS Loans for graduate students, professional students, and parents — Two options are available for Direct Plus Loans, the Grad PLUS Loan and the Parent PLUS Loan. These loans are subject to a credit check. Borrowers can still potentially qualify for a loan, even with an uneven credit history. The difference between the two is that, unlike Grad PLUS Loans, borrowers are responsible for payments as soon as the loan is disbursed for Parent PLUS Loans. Interest does accrue for Grad PLUS Loans, but borrowers don’t need to make payments while enrolled at least half-time or during the grace period after graduation.

Federal loans come with several benefits that private loans don’t have, including lower interest rates, income-driven repayment plans, and deferment or forbearance options. For these reasons, you should always exhaust your federal loan options first. 

5. Take out private student loans to fill any funding gaps

Private loans should be the last financing option for paying for college. Private lenders — like banks, credit unions, or online lenders — fund private student loans. Individual lenders set their own terms for private loans, so they tend to be more expensive, and you may have to apply with a cosigner if you have little or no credit history. 

But private student loans have a few advantages. They can be a good way to fill in the gaps if your federal loans don’t cover your school’s full cost of attendance. And you may be able to refinance your loans in the future and lower your interest rate. 

If you need to take out private student loans, shop around to find the lowest rates and the most flexible repayment plans. You can use Credible’s student loan calculator to determine your estimated monthly payments. 

If you’re ready to apply for a private student loan, Credible makes it easy to see your prequalified student loan rates from multiple lenders.