The cost of college has been climbing for decades, leaving many students and families feeling overwhelmed and unsure about how to afford higher education. According to the College Pricing 2024 report, the average annual tuition and fees for a public four-year university add up to more than $11,000 for in-state students—and go much higher for out-of-state or private institutions. These figures don’t even account for housing, books, or other essential expenses.
While these numbers may seem daunting, there are ways to ease the financial burden when paying for college. From scholarships and grants to employer tuition assistance and creative side hustles, there are many different ways to help fund your education. The key is to explore multiple strategies and find the ones that suit you best.
In this article, we’ll present different ways to pay for college, and share tips on how to make each option work for you.
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How to pay for college: 10 ways to cover costs
When it comes to ways to pay for college, there are numerous options to explore, each with its own benefits and considerations. Below are some of the most common and effective ways to finance a college journey:
1. Scholarships and grants
Scholarships and grants are two of the most sought-after ways to fund a college education, as they don’t require repayment. They are ideal for students who excel academically, participate in extracurricular activities, or face financial challenges. They’re also a strong option for students with unique talents or backgrounds, as many scholarships cater to niche groups.
Scholarships are typically merit-based, awarded to students who excel academically, athletically, or in extracurricular activities. Grants, on the other hand, are primarily need-based, intended for students who prove significant financial needs. For instance, if you have high grades and a history of volunteering, you may qualify for merit- and community-based scholarships. Alternatively, if your family income is below a certain threshold, need-based grants can help reduce the financial burden of college.
You can search for both scholarships and grants in a number of different ways.
- National databases: Online platforms like Fastweb, Scholarships.com, and the U.S. Department of Education’s search tool can help you find thousands of opportunities tailored to your skills, background, and goals.
- Local organizations: Community groups, nonprofits, and local businesses may offer scholarships to students in the area. These are sometimes less competitive than national programs, making them a great lesser-known option.
- Niche scholarships: Awards exist for everything from hobbies and talents to unique personal experiences. Examples include scholarships for first-generation students or those pursuing specific career paths.
- College-specific grants: Many institutions provide grants funded by alumni, endowments, or state programs. Check your college’s financial aid office for details.
Start early—scholarship and grant deadlines often come sooner than expected. Begin researching and applying by your junior year of high school or at the latest, early in your senior year. Apply to as many opportunities as possible to increase your chances of success. Tailor each application to the specific scholarship or grant, highlighting how you meet their unique criteria. Finally, stay organized and follow up on applications to ensure your submissions have been received and to inquire about timelines for decisions.
2. FAFSA and federal financial aid
The Free Application for Federal Student Aid (FAFSA) is a gateway to nearly all types of federal financial assistance for college. This annual application assesses your family’s financial situation to determine how much federal aid you qualify for.
By filling out the FAFSA, you can unlock grants, loans, and work-study opportunities to help cover tuition, housing, and other education-related expenses. The form is free to complete and available on the Federal Student Aid website or through the mobile app, making it accessible to students nationwide.
FAFSA is essential for students of all backgrounds, as most colleges and universities use it to allocate federal, state, and institutional aid. Whether you’re from a high-income household or a low-income family, submitting the FAFSA is critical—it’s not just for need-based aid. Many merit scholarships and state programs also require a FAFSA submission. It unlocks the following types of aid
- Grants: Need-based awards, such as the Pell Grant, provide funds that don’t need to be repaid.
- Federal loans: These are low-interest student loans. They include:
Subsidized loans: Available to students with financial need; the government pays the interest while you’re in school and during deferment periods.
Unsubsidized loans: Available to all students, regardless of financial need; interest accrues while you’re in school, and you’re responsible for paying it.
PLUS loans: Parent and graduate student loans that can help cover remaining costs, but require a credit check.] - Work-study programs: Opportunities to earn money through part-time jobs on or near campus, reducing the need for loans.
Pro tip: Fill out the FAFSA as soon as it opens—usually in October for the following academic year. State and institutional aid can run out quickly, so submit early—before the deadlines. Remember to double-check your application for accuracy, as errors can delay processing or reduce your aid. Finally, use resources like FAFSA workshops, high school counselors, or online guides to navigate the process and maximize the amount of aid you receive.
3. Work-study programs
Work-study programs offer students part-time job opportunities funded by federal or state financial aid programs, designed to help offset the costs of college. These roles are typically located on campus or within community service organizations and provide flexible scheduling to accommodate academic demands.
Beyond offering a paycheck to help you pay for your education, work-study programs usually deliver valuable professional experience, helping students develop time management, communication, and teamwork skills—benefits that enhance resumes and prepare students for future careers.
Positions can range from administrative support in campus offices to tutoring, library assistance, or even research. Choose roles aligned with your career goals, like research or tutoring, to add extra value by building relevant skills and networks within your field of interest. Applying early is essential, as positions are limited and competitive.
4. Employer tuition assistance
Employer tuition assistance programs offer financial aid to employees pursuing higher education, with some companies covering part or all tuition costs. These programs provide an affordable path to earning a degree or certification, combining work experience with financial support for education, making them a win-win for students and their employers.
Notable examples of companies that pay for college include Starbucks’ partnership with Arizona State University, Amazon’s Career Choice Program, and Walmart’s Live Better U initiative, which provides employees access to college degrees or certifications at little to no cost.
To maximize these programs, start by researching employers that offer such benefits, particularly those in your industry or field of interest. Understand the eligibility criteria, as some programs require a certain tenure or field of study to qualify. Additionally, review the repayment terms—some employers may require you to stay with the company for a set period post-graduation to avoid reimbursement obligations.
5. 529 college savings plans
529 college savings plans are tax-advantaged investment accounts specifically designed to help families save for educational expenses. Contributions to these plans grow tax-free, and when used for qualified education expenses—such as tuition, books, and supplies—withdrawals are also tax-free. This dual benefit helps families maximize their savings and reduce the financial burden of college costs.
529 college savings plans are best suited for families planning ahead for college costs, as they provide a disciplined, tax-efficient way to build up college savings over time. To make the most of a 529 plan, it's best to start saving as early as possible. The longer your investments have to grow, the more you’ll benefit from compound interest.
How to start a 529 plan?
To get a 529 college savings plan, you can start by researching plans offered by your state or looking into national programs. Most states have their own 529 plans, many of which are open to non-residents. You can set up an account directly through their respective state-operated websites or through the financial services company that manages the plan.
It’s important to compare features, fees, and investment options across different plans to find one that best fits your needs. Some states offer residents tax incentives for contributing to a 529 plan, so check for state-specific advantages that could further boost your savings
Once you've chosen a plan, you’ll need to open an account and begin making contributions. The process typically involves filling out an application online or through a financial advisor, and contributions can be made through direct deposits or lump sum payments. Some plans also allow for automatic contributions, which can help maintain consistent savings.
6. Private loans
Private student loans are an option for those who have exhausted federal loans and other funding sources, offering an opportunity to cover any remaining gaps in tuition costs. Private loans typically come with higher interest rates and fewer borrower protections. For this reason, students should prioritize federal loans first, as they typically offer benefits like income-driven repayment plans, deferment, and forgiveness programs that private loans don’t.
When considering private loans, only borrow what you truly need to avoid overburdening yourself with debt. You can find private loans through banks, credit unions, and specialized lenders such as Sallie Mae and SoFi. Researching different lenders and comparing rates and terms can help you choose the best option for your financial situation. Understand the loan’s repayment terms, including the interest rate, repayment schedule, and any associated fees before committing to ensure the loan is manageable and aligns with your financial situation.
Read this next: Applying for Student Loans? How to Get Started
7. Community college or dual enrollment
Community college and dual enrollment programs offer an affordable way to begin college-level education without the expensive price tag of a four-year university. While community college gives students a chance to complete general education requirements at a reduced cost, dual enrollment programs allow high school students to take college courses and earn credits before officially starting college. This can accelerate their education and reduce the total number of years needed to get a degree.
To make this strategy work, check on the front end that credits earned at a community college or through dual enrollment will transfer to the student’s intended four-year university. Work closely with your academic advisor to plan a curriculum that aligns with the requirements of your desired degree program.
8. Military programs
Military programs offer unique opportunities for students to receive tuition assistance and financial support for their education. These programs can significantly reduce or eliminate college costs, paving the way for a debt-free college education while offering career training and development in parallel with higher education. They’re a great option for individuals who are willing to serve or are already in the military. Here are some key programs available:
- GI Bill: The GI Bill offers comprehensive education benefits, covering tuition and fees, a monthly housing allowance, and additional funds for books and supplies. The Post-9/11 GI Bill is particularly popular and can be used for college tuition or other educational programs.
- ROTC (Reserve Officers' Training Corps): ROTC offers scholarships in exchange for a commitment to serve as an officer in the military after graduation. These scholarships can cover tuition, fees, and other educational expenses, in addition to providing a stipend for living costs.
- National Guard and Reserve Scholarships: These scholarships support part-time service members with funding for college expenses. Some programs offer benefits that cover tuition costs in exchange for a service commitment upon completion of the degree.
Research the specific requirements and obligations associated with each program, so that you fully understand how and when the benefits can be used—whether during active duty, as part of a reserve commitment, or after service. And as always, be sure to meet all application deadlines and comply with the necessary paperwork to maximize your tuition assistance.
9. Side hustles and savings
Generating additional income can be a practical way to help cover college costs while gaining valuable work experience. Side hustles include freelancing, part-time jobs, internships, and even starting an online business, such as selling products or offering services. There are several options that can be tailored around a student’s schedule, making it easier to balance work and academic responsibilities.
You should prioritize work that allows for flexibility, so it doesn't interfere with class times or study sessions. Budgeting is also key—set aside a dedicated portion of earnings for college expenses to grow significant savings over time.
10. Income sharing agreements (ISAs)
ISAs are an alternative financing option that allows students to pay a percentage of their future income after graduation instead of taking on traditional debt. This arrangement can be advantageous for those who may not qualify for traditional loans or prefer not to have upfront debt. With no payments required while still in school, ISAs can ease financial pressure during studies. However, it’s essential to understand that the total amount paid over time can be more than what would be paid in traditional student loans, depending on future income.
To get an income sharing agreement, you’ll first need to research and identify programs that offer this type of financial aid. ISAs are typically available through certain educational institutions, specialized schools, and some boot camps, vocational training programs, and coding academies that have partnered with investors or educational lenders to provide ISAs.
To make the most of an ISA, you’ll need to thoroughly understand the terms—including repayment caps, the percentage of income required, and how long payments will be made. This funding method should generally be used as a last-resort option after other avenues have been explored, as it can result in higher overall repayment amounts if the student secures a high-paying job post-graduation.
Get that money
Finding the best ways to pay for college can be overwhelming, but by combining multiple strategies, you can create a comprehensive financial plan that works for you. The key to successfully financing your education is diligent planning, thorough research, and a commitment to pursuing opportunities.
Take the time to understand your options, apply early, and remain proactive. With persistence and a well-rounded approach, you can minimize your college costs and set yourself up for success in your academic and professional future.
FAQs
What is the best way to pay for college without taking out loans?
The best way to pay for college without loans is to tap into a combination of scholarships, grants, employer tuition assistance, and income from side jobs. These options can help cover educational costs without adding debt. Additionally, pursuing community college or dual enrollment programs can save on tuition fees, and 529 college savings plans can make a significant impact if funded early.
Does the Army pay for college before service?
Yes, there are programs like the ROTC (Reserve Officers' Training Corps) and certain scholarships available through the National Guard or Reserve that can help pay for college before service begins. Some programs offer full or partial tuition coverage in exchange for a service commitment after graduation.
Are scholarships taxable income?
Scholarships are typically not taxable if they’re used for qualifying educational expenses, such as tuition, fees, and required course materials. However, any portion used for non-qualified expenses, like room and board, may be taxable. Always consult IRS guidelines or a tax professional for your specific situation.
How do 529 plans compare to other savings options?
529 plans are tax-advantaged accounts specifically designed for educational expenses, making them more beneficial than regular savings accounts or taxable investment accounts. Contributions grow tax-free, and withdrawals for qualified education expenses are also tax-free. While other savings options like Roth IRAs or traditional savings accounts don’t offer the same education-specific benefits, they can be more flexible for other types of investments.
What happens if I default on a private student loan?
Defaulting on a private student loan can have serious consequences, including damage to your credit score, increased debt due to added fees and interest, and potential legal action from lenders. To avoid default, communicate with your lender if you’re struggling to make payments and explore options like deferment, forbearance, or refinancing to manage your loan responsibly.