College graduates are currently leaving school with nearly $30,000 in student loan debt.
It may even feel like taking on mountains of debt is what incoming freshmen should expect.
But although it might not be possible to avoid student loans altogether, there are several ways to pay for college — and many of them don’t require you to incur any debt at all.
If you’re preparing for college, here’s your first course: Paying for College 101.
10 ways to pay for college
The most important thing you can do as a college student is to fill out the Free Application for Federal Student Aid (FAFSA).
The form helps the U.S. Department of Education and your school’s financial aid office determine your eligibility for several essential ways of paying for college.
After you start with the FAFSA, here are your options for paying for college.
Scholarships are a type of financial aid that you don’t have to pay back. Your school may offer several options based on merit and financial need. Academic scholarships are common, but if your high school grades aren’t good enough for you to qualify during your first year, don’t fret.
During your first year or two in college, you’ll have the chance to earn better grades which can give you the ability to qualify for scholarships in future years.
In addition to scholarships provided by your school, you can also apply for scholarships from private companies and organizations. Websites like Scholarships.com and FastWeb list millions of scholarships that you can apply for. While you won’t be eligible for all of them, you may still be able to get a significant amount of cash to help you cover your costs.
Like scholarships, grants don’t need to be repaid. The Department of Education provides a number of grants based on financial need — a crucial reason to fill out the FAFSA — and other requirements.
Additionally, you may be able to find state- and school-based grants, along with grants from private companies and organizations, to help you pay for college. Take some time to search for grants that can help you achieve your goal.
3. Work-study programs
Work-study programs can be an excellent way to pay for college through employment at your school. Your eligibility is typically based on the information you share on the FAFSA. The job opportunities are typically part-time and flexible, which can make it easier to manage your class schedule and workload.
Keep in mind, though, that the pay may not be as good as if you were to find a job on your own outside of your campus. But if you prefer to stick to campus or don’t have means of transportation, a work-study program can be a great option.
If you don’t qualify for a work-study program or you want more options, you may be able to find a job that’s a better fit for you, either on-campus or off-campus. Depending on your school schedule, you may be able to find a part- or full-time job that can help you reduce your reliance on student loans.
Also, whether or not you choose to work during the semester, take advantage of the summer with a seasonal job to earn money for the upcoming school year.
If you or your parents have had an opportunity to save for education-related expenses, you’ll be able to reap the benefits of that preparation. Note, however, that some college-based savings accounts, including a 529 plan and Coverdell Education Savings Account, typically require you to use funds for certain expenses. Otherwise, you might incur tax penalties.
If you don’t have any college savings yet and still have some time, consider opening a 529 plan or Coverdell ESA to take advantage of tax savings on your contributions.
6. Parental assistance
If your parents have the means, they may be able to help you pay for college through their current income or savings.
Parents also have the option to take out Parent PLUS loans or private student loans to help their children pay for college.
However, parent loans are typically less favorable than loans you can take out as a student, so try to avoid that option, if possible.
If you’re considering asking your parents for help, be mindful of their financial situation and their own need for financial security in the future.
7. Choose an affordable school
While this option won’t give you access to more funds to help pay for college, it can drastically reduce your costs to make your education more affordable overall.
The idea of having a well-known university on your resume can be appealing. But many state colleges can provide a lot of value for much less. You may also consider attending a community college for the first two years, then transferring to a university to finish your degree.
By picking a less expensive college, you may be able to save thousands of dollars every year — making it easier to avoid student loans.
8. Fellowship or assistantship
If you’re a graduate student, your college may have fellowships and assistantships that you can apply for.
With a fellowship, you’ll be able to get financial aid in exchange for research and development in your field of expertise. In many cases, you don’t need to teach, which could be a distraction from studies.
With an assistantship, you’ll perform certain tasks as an employee to professors and other faculty members, as well as the department in which you’re studying. That may include teaching undergraduate courses.
In either case, you typically don’t have to pay back the money you earn from a fellowship or assistantship.
9. Federal student loans
If all your efforts to pay for college without student loans aren’t enough, your FAFSA will help determine how much financial aid you qualify for in the form of federal student loans.
These loans are provided through the Department of Education and when you apply for undergraduate loans, there’s no credit check. Even with graduate and parent loans, you can get approved as long as you don’t have an adverse credit history.
With federal loans, everyone who gets approved receives the same interest rate, as well as access to several benefits, including:
- Student loan forgiveness programs
- Income-driven repayment plans
- Repayment terms ranging from 10 to 30 years
- Generous deferment and forbearance options
Because of the reasonable interest rate on federal student loans, they’re typically the best loan option to tap into first.
Depending on your financial need, you may even qualify for subsidized student loans. With this option, the federal government pays any interest that accrues while you’re in school, during the six-month grace period after you leave school, and during deferments in the future — making them an excellent option for saving on interest costs.
10. Private student loans
If you’ve tapped all of your resources, including federal student loans, and still don’t have enough to cover your education costs, private student loans can help bridge the gap.
Private loans differ from federal loans in a few ways:
- Private student loans typically charge higher interest rates than undergraduate federal loans.
- Private loans require a credit check, and your interest rate can vary based on your creditworthiness.
- If you can’t get approved for a private student loan on your own, you may need a creditworthy cosigner to help you qualify.
- Private loans generally don’t provide access to loan forgiveness programs or income-driven repayment plans. Also, forbearance and deferment options may not be as generous.
Not all private lenders are created equal, so if you’re considering private student loans, it’s important to take time to shop around for the best rates and terms.
With Purefy’s Compare Rates tool, you’ll be able to compare rate offers from multiple lenders in one place which can help you find your best option to save the most money quickly and easily.
Paying for College 101: The bottom line
There are several ways to pay for college, and many of them don’t require that you borrow money which you’ll inevitably have to pay back.
Whether you’re a high school student preparing for your freshman year or a current college student trying to reduce your student loan debt, these options can help you get the funds you need to complete your education.