How do I pay for college with no money? Your options

Many families aspire to save enough to meet the costs of a college education. But with college costs going up each year, it can be hard to even know how much to save for college.

For instance, education costs went up an average of 12 percent each year between 2010 and 2022, according to the Education Data Initiative.

Employment changes, inflation and other expenses like medical bills may impact how much you’ve been able to save. But there are still ways to pay for higher education, even with no money for college.

Paying for college statistics

How to pay for college with no money saved

Are you panicking, asking, “How do I pay for college with no money?” Don’t worry. Paying for school if you don’t have money saved will take a little more work, but it is possible. Start with these tips to lower your financial obligation.

Apply for scholarships and grants

Federal grants, like the Pell Grant and the Federal Supplemental Educational Opportunity Grant, are given to students who demonstrate financial need based on information submitted through the FAFSA.

You may also qualify for state or institutional grants. During the 2022-23 academic year, the average undergraduate qualified for a total of $10,680 in grant aid.

Scholarships, while similar to grants, may vary in eligibility requirements. Scholarships come in various forms, from academic scholarships that require essays and transcripts to extracurricular-based awards that may require video submissions or interviews.

Because many scholarships come from private organizations, you can use a scholarship search engine to filter through the thousands of offerings and apply only for the ones that you qualify for. You should also contact your financial aid office to see if there are institutional scholarships you can stack with private awards.

Pros

• Don’t have to pay them back.
• Can qualify for grants through the FAFSA.
• May cover a large portion of tuition .

Cons

• Can come with specific requirements and can be hard to qualify for or apply for.
• No guarantee that you’ll be accepted.
• May require maintaining certain conditions, like a minimum GPA.

Request work-study

Federal work-study is a need-based program that gives students part-time job opportunities — typically on campus — to help cut tuition and academic costs.

College Board found that the average undergraduate student received $90 in work-study funds in the 2022-23 academic year. That average is small because it includes the large majority of students who do not participate in work-study.

These jobs are university-affiliated, determine weekly hours by financial need and pay at least the minimum wage.

Work-study eligibility is based on factors like your family size, income and financial history. Like other forms of federal aid, work-study jobs are based on your FAFSA information. Your school’s financial aid department will determine your eligibility.

Pros

• May be able to build work experience, possibly related to major.
• Can often work on campus.

Cons

• Possibly minimum wage pay.
• If you leave school, you also lose your part-time job.

Take out student loans

Student loans come in two forms: federal and private. These should be a last resort after other financial aid has been used. However, many students still need to take out loans after receiving aid to fill gaps in their funding.

Even so, College Board data shows that the number of students resorting to loans has decreased. Federal loans disbursed to undergraduate students declined by 49 percent between 2012-13 and 2022-23.

Federal student loans

Federal student loans are administered by the U.S. Department of Education. Undergraduates have access to two types: Direct Subsidized and Direct Unsubsidized loans.

Subsidized loans are need-based and don’t accrue interest until after the grace period is over. Unsubsidized loans accrue interest immediately. Neither type of loan checks your credit, and both open the door to several unique repayment options and forgiveness opportunities.

Pros

• More borrower protections.
• Rates may end up being lower than private.
• Can access through the FAFSA.

Cons

• Less flexible loan terms.
• May not cover full cost of attendance.

Private student loans

Unlike federal student loans, private student loans from banks and credit unions can typically cover the full cost of your attendance. They may also be a cheaper option if you or your co-signer have good credit, which can lead to better student loan rates.

Priavte student loans have strict eligibility requirements and fewer borrower protections. Borrowers should explore these loans only after students have borrowed the maximum amount from the federal government.

Borrowing too much through student loans is a common mistake. By overextending their borrowing, students risk high monthly payments after graduating and thousands of dollars in interest charges.

Whether you use private or federal student loans, as a rule of thumb, borrow only as much as you need to cover the academic costs after accounting for scholarships and grants. Also, maximize federal loans before applying for private.

Pros

• More flexible terms.
• May cover all attendance expense.
• Lower starting rates.

Cons

• Fewer borrower protections.
• Have to source on your own.
• Higher rate caps.

Cut expenses

As a student, there are several ways to cut costs.

Room and board and amenity fees can add thousands of dollars per year to your total cost of attendance. Living in a low-cost apartment off-campus or living with family or friends is a good way to bring those monthly charges down.

You can also apply to become a resident advisor (RA) as soon as your sophomore year. RAs are often high-achieving undergraduates who are given responsibility over the general safety and well-being of residents within on-campus housing. RAs are often granted free room and board and, depending on the school, can also be paid a monthly stipend.

Pros

• Won’t end up borrowing as much.
• Being an RA can add life experience and help on a resume.

Cons

• You might not get the full college experience if you live off-campus.
• Watching costs that closely can add stress.

How to start saving for college

Even if you have no money for college, it’s never to late to start saving. There are a few ways to save for your college education, but a 529 plan is among the most popular.

It allows you to make contributions through investments, like stocks and funds, that are tax-deferred and can grow over time. You can open a 529 plan for yourself or someone else.

There are two types of 529 plans to choose from: education savings plans and prepaid tuition plans.

• Education savings plans are the more common option of the two. Account owners can choose their investments, which determine the account growth over time. Withdrawals with these plans can be used for any K-12 and higher education-related expenses.
• Prepaid tuition plans are a type of 529 plan offered by select states and institutions. As such, the money in the account isn’t guaranteed in every state and may come with institutional restrictions. Prepaid plans are only available for higher education-related expenses, and don’t cover room and board.

There are drawbacks and benefits to each plan. Your choice ultimately depends on your financial situation and what you need the funds for. Before taking one out, look into the details of each to make sure you’re setting yourself up for financial and academic success.