How to pay for college: 10 options to consider

The cost of earning a degree can be a major concern for students who have the means to pay out of pocket, and for a good reason. Between the 1994-1995 and 2024-2025 school years, the average cost of college tuition and fees alone increased from $5,740 to $11,610 at public four-year institutions, according to the College Board.

Private tuition and fees followed suit, with a significant jump from $24,840 to $43,350 during this same period — that excludes room, board and other related expenses. The steep increases, along with added costs, may be worrisome if you plan to enter college soon. Fear not – many creative options exist to help ease the financial burden.

10 Ways to pay for college

1. Use grants

Grants are a type of financial aid that does not need to be repaid, and often they are distributed to students with financial need. Grants typically cover several thousand dollars worth of college expenses. A common example of a grant is the Pell Grant, which provides up to $7,395 for the 2025-26 academic year.

You must complete the FAFSA to qualify for all federal and many state-based grants. Some states will also have their own separate applications for grants. Visit your state’s Department of Education website to see how to apply.

2. Apply for work study

Work study is a form of federal financial aid where you receive a job either at the school or with an affiliated organization. You can be eligible for work study by filling out the FAFSA. You are paid hourly and can use the funds to cover tuition, fees, living expenses or anything else you need.

Most students work between 10 and 15 hours a week and can often schedule work around their class schedule. Common jobs include working at the campus library, at the front desk of a dorm or the campus rec center. Like with any job, you will need to actively look for them, but you will often be given priority if you have a work-study grant.

3. Apply for scholarships

Like grants, scholarships do not have to be repaid after graduation and are one of the best ways to pay for college. Start by applying to your school’s scholarships, then use scholarship search engines like Scholarships.com, Unigo and Fastweb to find more opportunities.

It’s best to apply for scholarships early, particularly because some scholarship programs limit the number of applications they will consider. If you delay applying, it’s possible your application may not be accepted.

4. Start saving early

The golden rule of college finance still rings true: Start saving early to maximize compound interest.

5. Assess family finances

The federal financial aid formula considers assets such as stocks, mutual funds, certificates of deposit and rental properties that your family owns when calculating how much your parents can afford to pay for college. Other investment vehicles, like retirement plans, life insurance policies and home equity in your family’s primary residence, are not included in the federal financial aid formula.

Parents may qualify for more financial aid if they store assets in places not considered on the FAFSA. That includes paying off unsecured debt like personal loans and credit cards. Parents should talk to a tax expert or financial planner about moving these assets without incurring a large tax bill.

6. Compare 529 plans

A 529 college savings plan allows you to set aside money for qualified educational expenses so it can grow and be withdrawn tax-free later on. These 529 college savings plans can vary dramatically in fees, investment options, tax incentives and rates of return. While some states offer generous tax deductions and credits, others offer few or no state tax incentives. There are no federal tax benefits for 529 contributions.

When comparing different plans, research ratings through organizations such as Morningstar, look into your home state’s 529 plans and figure out your eligibility for state tax incentives. You can invest in any state’s 529 plan, but you may not get a tax break if you invest in a different state’s plan.

7. Get help from family

Parents and students don’t have to shoulder the burden of college costs alone. Grandparents and other family members can contribute to a student’s 529 plan, and there are built-in perks for those who give big.

The IRS allows individuals to give annual financial gifts of up to $19,000 per beneficiary to a 529 plan without disclosing the gift to the IRS. All 529 plans come with a limit, allowing donors to give a financial gift of up to five years of funds at a time at $95,000 without incurring gift taxes.

8. Choose an affordable school

The cost of college and the amount of aid available varies immensely by institution. Certain schools offer full-tuition scholarships, while some “work colleges” offer free or reduced tuition in exchange for the student working at the university.

Even many pricey institutions offer significant discounts to low- and moderate-income students. Visit the National Center for Education Statistics’ College Navigator website to research average financial aid packages by income bracket.

9. Take out federal student loans

Federal student loans are typically the first choice for students who need to borrow money for college since they come with benefits that private student loans can’t offer. For instance, they have extensive deferment and forbearance options, loan forgiveness programs and several income-driven repayment plans.

If you’ve exhausted all other options for getting money to pay for college, consider borrowing federal student loans. Federal loans have relatively low interest rates, especially for undergraduate students. If you’re an undergrad with financial need, you may qualify for subsidized loans, where interest does not accrue in school or during deferment periods.

10. Apply for private student loans

If you’ve exhausted all your federal student loans, which are capped on an annual and aggregate basis, it might be time to consider private student loans.

Private student loans can be another way to cover the cost of college. However, they’re generally considered to be a last resort. Private loans typically require a credit check to get approved, which means it can be tough to qualify as a college student with little or no credit history.

Even if you get approved, your interest rate is based on your creditworthiness, so your loans could be expensive and you may require a cosigner. Getting a cosigner would mean that the loans would show up on the cosigner’s credit report, which might make it difficult for them to get approved for their loans.

3 Ways to pay off student loans after college

If you have federal student loans, consider these options:

1. Public Service Loan Forgiveness: It forgives your remaining student loan balance after 120 consecutive payments while working for a qualifying employer.

2. Income-driven repayment (IDR) plans: A recent court order paused IDR applications, so you’ll likely need to explore other options, as applications for these programs are temporarily inaccessible. If resumed, it could decrease the monthly amount you have to pay, and most plans come with loan forgiveness after 20 or 25 years.

3. Refinancing: You can refinance your federal loans into a private loan if you spot a particularly good interest rate, though you’ll lose the benefits of the federal program.

The key is to create a plan for your student loans based on your goals and budget. With the right strategy, you could end up paying off your debt early, saving money on interest, and even getting some of it forgiven.

Bottom line

Paying for a college education is an investment, but resourceful students can source and combine multiple financing strategies. There are ways to minimize student loan debt, from applying for monetary awards to saving in advance to working while in school to offset costs.