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How to pay for college: 6 ways to help pay for college even when you don’t think it’s possible

6 min read

6 min read

Here’s to pursuing higher education! But, with rising tuition costs, you may be trying to figure out how to afford college.

Education statistics reveal the total cost of going to college is reaching tens of thousands annually, leaving students and parents burdened with financing college. Fortunately, there are strategies college students and parents can use to afford the cost of higher education. With these strategies, affording higher education may be within reach, even if you think college expenses are something you could never finance on your own. Some options can even get you a free ride!

But first…

The first step to paying for college is to fill out the Free Application of Federal Student Aid (FAFSA). While the funds are distributed by the federal government, both public and private nonprofit colleges use the FAFSA to offer and distribute financial aid opportunities to students. With the FAFSA, you can receive federal aid like grants, work-study opportunities, and student loans. That said, it’s a critical financing element for those exploring how to pay for college.

Be as thorough as possible when filling out the FAFSA forms and submit FAFSA paperwork as soon as it’s available to you. Some colleges award need- and merit-based money on a first-come, first-served basis.

Ways to pay for college

Read on to learn a few tips on how to pay for college. We’ll categorize paying for college in two ways: without and with student loans. Read on as we outline your options for financing your advanced education.

How to pay for college without loans

If you’re wondering exactly how to get money for college, there are ways to cover college costs without taking out student loans.

1. College-specific financial aid

Colleges and universities often have a division that handles your financial aid. They receive contributions from alumni and corporate sponsorships to support low-income or high-merit students. Many apply for financial aid the moment when they apply for admission to the school. These financial aid packages can partially or fully cover tuition and fees. And in some cases, a living allowance is given.

2. Grants

Grants are small amounts of money that are considered gifts in some circumstances. Typically, they won’t cover all college expenses, but they can help offset costs. Unlike other forms of financial support, grants are generally free to the recipient, so you don’t need to pay it back as long as it’s used as intended. Schools and other grantors often reference your financial need and academic merit to determine candidacy for the grant. Some grants are paid in exchange for services such as teaching or research. In that case, they’re considered taxable income.

While there are various types of grants available, they are usually bucketed into two groups:

  • Program or subject-specific grants offer money to students who take courses in priority fields or under-populated academic programs such as science and mathematics.
  • Student-specific grants consider the student’s profile and financial situation. For example, some grants give support to students who will be among their family’s first generation to attend college.
  • Federal government grants are another grant source to consider. The Federal Pell Grant, for example, is the largest federal grant program for undergraduate students and is awarded to students who demonstrate financial need to help them pay for college expenses. In addition to the Pell program, the federal government offers other types of federal grants. And many states also offer grant programs. You can use the Education Department’s state education contacts and information locator to find agencies in your state that administer college grants and apply to the grant programs you qualify for.

3. Work-study programs

Sometimes, financial aid is given in exchange for part-time work at the school work-study programs. Many colleges reserve several positions for students participating in these programs, and students can use funds to offset tuition costs, so it’s worth pursuing.

4. Academic and athletic scholarships

Colleges and universities want to recruit the best and the brightest individuals. This often includes athletes and academic achievers. So, if you belong to this group, you could get a scholarship to offset college costs.

Word of caution: Academic scholarships require you to remain in good standing. For this reason, you could lose your scholarships if you breach certain college rules or fall below a certain grade point average.

5. Corporate or business scholarships

Corporations or businesses often have sponsorship programs aimed at developing young talent. These companies give grants or scholarships to deserving students. Some scholarships are for the children of their employees. In other situations, in exchange for paying your college tuition, a company will ask you to sign a contract of return service. So, you are required to work for the company for a certain number of years once you graduate.

6. Student loans

As the name implies, college students borrow money to pay for their college education from public or private lending institutions. Use student loans once you’ve exhausted all other options. And if you need to borrow, take out a federal student loan before a private student loan. Federal loans have benefits that private student loans don’t, like income-driven repayment plans and student loan forgiveness programs.

Pay close attention to the interest rate on your loan. A high interest rate can increase the amount you owe over time. Also, check when the interest will start to accrue and when the payback period starts —all these can greatly affect your financial future, so borrow carefully!

(Head to Spruce for more college student budget tips.)

Word of tax wisdom: Luckily, there is a way to offset some of your student loan costs. When you start repaying your student loan, you may be able to deduct the interest paid — even if you don’t itemize deductions. The maximum $2,500 deduction is “above the line,” so you don’t have to itemize your deductions to claim this benefit. The IRS limits this duction to just one per return, so married couples who are both repaying student loans can’t deduct more than $2,500 annually on their joint return.

Learn more about the student loan interest deduction.

Get help with taxes as a college student or parent

Taxes can be tricky for any taxpayer. And filing taxes as a college student (or as a parent!)  can make things even more intimidating.! H&R Block can make tax filing for students a little easier. Whether you choose to file online or want to file your taxes with a tax professional, we’re here for you.

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