As you prepare for college, the steep costs are probably a major concern. Figuring out how to pay for college may seem out of reach for you or your children.
It’s not easy, but here are five ways to accumulate the funds you’ll need:
How to Pay for College: Savings
If you have extra money to set aside to for college, you should consider enrolling in a 529 plan. With these plans, contributions are invested and grow tax free as long as you use the earnings for educational purposes. Ideally the plan is opened early in the student’s life so the funds can grow over time and then be used to pay for education. However, it can be opened at any point to start saving for college.
How to Pay for College: Scholarships and Grants
Scholarships and grants are awarded to students based on an application and selection process. These funds for educational purposes do not have to be paid back. They can be available to students based on financial need, degree pursued, location, talents or disabilities. Private scholarships may be available through non-profits organizations, individuals or companies. Scholarships are also available through colleges for athletics, leadership, academics and financial need. Scholarships can range from a few hundred dollars to full-rides that cover all costs related to the degree.
How to Pay for College: Financial Aid
Financial aid packages help many students to pay for college. These can include federal loans such as Stafford Loans, PLUS loans for parents and guardians and Perkins loans for low-income students. These loans usually have low interest rates and delayed repayment plans until after graduation. A Federal Work-Study program is also available that provides on-campus jobs for students. In order to receive federal financial aid, a Free Application for Federal Student Aid (FAFSA) needs to be filled out online or through a college’s financial aid office.
How to Pay for College: Private Loans
Private loans are available through banks and credit unions. These loans typically have higher interest rates than federal loans. Your credit score and income are taken into consideration. Private loans do not require a completed FAFSA.
How to Pay for College: Employment Options
Another option for paying for college is to have a job while going to school. This could include working full-time and attending college part-time or working part-time and attending college full-time. Keep in mind, the more money you make, the lower your financial aid award. If you are working full-time, there may be a tuition reimbursement plan available as an employee benefit. Some companies cover any classes; some only cover specific classes related to your work. Either way, these programs allow you to make progress on your college education without the expensive bills.
