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If you’re considering attending college it’s important to know the different ways to pay.

The first step is to understand the costs you’ll have to cover. The college bill consists of two types of costs: direct and indirect expenses. Tuition, fees, housing, meal plans, and other costs paid directly to the college are direct expenses. Indirect expenses can vary widely depending on the student, but often include travel, dorm furnishing, entertainment, and personal bills. These costs are not paid directly to the college.

Here’s a quick rundown of the different ways to pay for college expenses.

Financial Aid

Financial aid is money from federal, state, and local governments, along with your college, to help you cover the college bill. It can include grants and scholarships (free money you do not need to repay), as well as loans (money you borrow and repay with interest). 

To receive financial aid, you will need to fill out the Free Application for Federal Student Aid (FAFSA) and an additional form that some colleges require, called the CSS Profile. Some states also have their own financial aid application forms. Colleges use this information to determine how much financial aid to award. 

Outside Scholarships

In addition to scholarships that your college may offer you, you should apply for outside scholarships available online or locally in your community. 

Tuition Payment Plans 

Check with your college about their tuition payment plan options, which allow you to pay direct expenses not covered by financial aid in installments throughout the year rather than paying them all at once. They sometimes charge a small fee to start, but don’t charge interest like loans. 

Savings 

Any amount of money you save towards college helps. You can set aside money to grow with the intention of using it for college expenses later. A 529 college savings plan, a Coverdell Education Savings Account, and even a regular savings account are great tools for saving.

Working 

Earning an income before or during college is another way to help cover costs, particularly indirect expenses. It may be difficult to juggle a job and classes during the school year, so some students work over the summer to save for the upcoming year. 

The Federal Work-Study Program is another form of federal financial aid. The program provides part-time jobs for students, allowing them to earn money during school to help pay for educational expenses. Work-study jobs can be a great opportunity for students because they tend to factor in class schedules and academic goals to be more inclusive of students' needs. The FAFSA determines whether you qualify for a work-study program, and if awarded, you will need to search and apply for work-study positions.

Loans

If you have a remaining bill after financial aid has been applied that cannot be covered by the above options, you may consider loans to cover the remaining cost. While we do not recommend taking out additional loans, it’s important to explore all of your options. Make sure you maximize your federal student loans before considering any other loan options. 

The Parent PLUS Loan is one to consider; however, it does not offer the same benefits as a federal student loan, and it’s the parent’s sole responsibility to repay. Private student loans often have much higher interest rates than federal student loans and do not have the same benefits. If you must take out a private loan, you should compare multiple providers and closely review the terms of each loan, including interest rates, repayment options, and any hidden fees, to make an informed decision.

If you plan to attend college, we recommend exploring all of the options above. Determine which options are best for you and put together a plan for how you'll cover costs as they come up. Regardless of what options you choose, don’t forget to fill out a new FAFSA form before every academic year.