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The 7 Best Ways to Pay for College

How to pay for college

For many college students out there, getting into college is only half the battle. Paying for college is the other half. With college prices higher than ever—and many families feeling an economic strain—funding higher education can seem next to impossible. But don’t worry: we’re here to help. If you’re wondering how to pay for college, this is the guide for you. In the sections below, we provide 7 strategic ways to pay for college successfully. We also offer insightful statistics and answers to some of your most commonly-asked college funding questions. You can pay for college. We’ll show you how.


By the Numbers - How Families Currently Pay for College

Since very few students get full-ride scholarships or enough private awards to fully cover the cost of an education, how are their families coming up with the money to pay for college? Let’s take a look at current numbers around what American families are doing a lot to minimize higher education costs, according to the 2020 “How America Pays for College” study from Sallie Mae and Ipsos:

  • 44% of college payments in academic year 2019-20 came from parent income and savings
  • 25% of college payments in academic year 2019-20 came from scholarships and grants
  • 58% of families surveyed used scholarships, making it the second biggest source of funding in academic year 2019-20 came from scholarships and grants
  • Fewer families are filing the FAFSA®, which means they could be missing out on thousands of dollars in financial aid. Just 71% filed for academic year 2019-20—a decrease from 83% two years ago
  • More than one-third (37%) of families used a college savings account like a 529—up from 21% in AY 2018-19

Share of college costs paid by from each funding source

The bottom line? From scholarships to saving strategies to limiting spending, there are so many different ways to help you pay for college.



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How to Pay for College - 7 Best Strategies

With the data now clearly laid out, it’s easy to see that there are several ways that students and their families have paid for college. For some, families provide the money. For many others, this simply isn’t possible. In cases where family money won’t get you across the finish line, there are several routes you can take to successfully fund the next step. Below, we’ve compiled 7 of the best ways to pay for college.


1. Apply for Financial Aid

Of all the college-funding methods discussed is this guide, the first one we’re discussing is perhaps the most sure-fire. It’s federally mandated financial aid. The reason that it's perhaps the best way to pay for college is that it’s virtually guaranteed if you qualify, and many families do. Plus, applying isn’t difficult — and those who qualify often go on to achieve their collegiate dreams. There is a strong connection between applying for financial aid, enrolling and ultimately earning a bachelor’s degree. But millions of families who would qualify for financial aid never file the documents.

There are two main types of financial aid from federal institutions. The first is the Free Application for Federal Student Aid (FAFSA): a form that determines whether students qualify for a wide range of financial aid. Based on a student’s individual or family income, FAFSA can automatically qualify college applicants for a host of loans and grants, including Stafford Loans, PLUS Loans, Federal Pell Grants and other need-based grants. FAFSA is also the benchmark used by most colleges to distribute their own need-based scholarship packages. 

Parents can file the FAFSA starting October 1 of each year. It’s important to file early to capture any money that students qualify for, especially for low-income students. If you don’t start early, you might miss the ability to get the Federal Supplemental Education Opportunity Grant (FSEOG), which can run out on some campuses.

Perhaps the most important source of financial aid that FAFSA can qualify you for are Federal Pell Grants. Unlike loans, Federal Pell Grants do not have to be repaid (except under very particular circumstances). They are awarded as a lump sum that can total in excess of $6,000 for a single academic year.

About 2 million would have received a Pell Grant and 1.3 million of them would have qualified for the maximum Pell Grant. In addition, many parents fail to finish the application. If you have trouble completing the Free Application for Federal Student Aid (FAFSA), contact the FAFSA hotline at 1-800-4-FED-AID (1-800-433-3243).

Students with extreme financial need who qualify for the Pell Grant are eligible for the FSEOG. In addition, some state aid programs and college aid programs run out of money and operate on a first-come, first served basis.


2. Apply for Scholarships

Perhaps the most important source of financial aid that FAFSA can qualify you for are Federal Pell Grants. Unlike loans, Federal Pell Grants do not have to be repaid (except under very particular circumstances). They are awarded as a lump sum that can total in excess of $6,000 for a single academic year.

Additional Tip - Look into private scholarships! 

When most people think of scholarships, they may think of financial awards provided by schools or governments. However, there is a huge array of scholarships also provided by private organizations like companies, foundations, service groups, and even individuals. These are called private scholarships, and they’re a great way to pursue funding outside of college- or government-offered financial aid packages.

Be sure to use Cappex when checking for private scholarships. Our site includes lists of scholarships broken down by these categories:

The Congressional Hispanic Caucus Institute also sponsors an online directory of scholarships, internships and fellowships for Latino students, but it can be relevant to any minorities. Also, the office of U.S. Rep. Lucille Roybal-Allard in California annually publishes a student resource guide of scholarships, internships and other opportunities. There also are scholarships available through MALDEF and the Hispanic Scholarship Fund.

And be advised - schools don’t list every scholarship! 

Don’t assume that you’ll find all the institutional scholarships listed on a school's website. When Longstreth’s daughter, who is Latina, was looking at Southern Methodist, Oregon State and Missouri University of Science and Technology, she discovered new institutional scholarships.

These scholarships were for Hispanic students interested in engineering, but weren’t on the institutions’ websites. She found out about them by talking to admissions representatives. It never hurts to ask!


Access Cappex's Scholarship Database

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3. Borrow Through the Federal Direct Loan program

The Direct Loan, which is designed exclusively for students, is the safest loan to use and has built-in safety nets if you graduate without a well-paying job. Provided by the U.S. Department of Education, the Direct Loan is currently available in four options: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.

Direct Subsidized Loans are only available to undergraduate students with demonstrable financial aid (established via FAFSA). These loans do not accrue interest while students are in school, or for the first sixth months after school is finished.

Direct Unsubsidized Loans are available to eligible undergraduate, graduate, and professional students. Demonstrable financial need is not required to earn these loans, though the amount you borrow is determined by your cost of college attendance and the amount of financial aid you’re currently receiving. Direct Unsubsidized Loans accrue interest the moment they take effect.

Direct PLUS Loans are available to eligible graduate and professional students, as well as dependent undergraduate students that may need extra assistance with costs not covered by other forms of financial aid. You do not need to demonstrate financial need to apply, but you will need to conduct a credit check. Direct PLUS Loans are unsubsidized, so they accrue interest the moment they take effect.

Direct Consolidation Loans are loan plans that allow borrowers to consolidate all of their loans into a single plan through one loan servicer. Doing so allows you to have just one fixed interest rate, which can make loans more affordable and easier to pay. Direct Consolidations Loans are provided at no charge and welcome all borrowers to apply.


4. Explore College 529 Savings Plans

Another great way to save for college (and ultimately pay for it) is a 529 Savings Plan, also called a 529 Plan. State-sponsored and offered by nearly all U.S. States, 529 Plans are specialized savings and investment accounts that do not tax on interest accrued. In almost all cases, you keep everything you earn to put towards a college education.

There are two primary types of 529 Savings Plans: College Savings Plans and Prepaid Tuition Plans. College Savings Plans work like retirement funds in that they invest deposited money into mutual funds or other options (some of which can be determined by individual). Prepaid Tuition Plans allow plan owners to pre-pay all or some of the cost of an in-state public college education. (There is also a Private College 529 Plan, which offers the same service for participating private colleges.)

Interested in learning more about 529 Savings Plans and comparing them state-by-state? Check out this USNews article for more information. 


5. Look Into “Fly-In Programs”

Tuition, room and board, and other academic expenses are the biggest contributors to the cost of college. However, one added cost that many overlook is the cost of visiting colleges. Traveling to schools, staying overnight, and traveling back can cost hundreds to thousands of dollars. Thankfully, with fly-in programs, those costs can be covered.

Offered to applicants from certain demographic groups and/or those with demonstrable need, fly-in programs cover the cost of travel, lodging, and other expenses so students can visit certain college campuses. These programs are usually offered in partnership with schools themselves, so check out the websites of your top schools to see if they have fly-in opportunities. You can also read College Greenlight’s annual list of the most popular list of college fly-in programs.

Some schools sponsor fly-in programs that will pay for primarily underrepresented students to check out their campuses. College Greenlight publishes the most popular list of college fly-in programs.


6. Explore Summer Programs

Some schools offer free summer programs for minority students. Veronica Longstreth, a school consultant in San Diego, said an impetus for these programs was that universities were concerned that they weren’t getting minority students in certain majors, such as STEM.

You can find some of these programs through College Greenlight. One of the forums on College Confidential is also dedicated to summer programs. And you always can use Google to find programs.


7. Choose an affordable school

One of the smartest ways to pay for college is to choose a college that fits your price range. The annual tuition for colleges and universities across the country varies considerably, but so does the aid offered by these colleges. Once you have your aid in front of you and notification of any scholarships awarded, you can begin to make a choice that works best with your financial situation. 

Choosing an affordable school means being honest with how you expect to handle finances going forward. If your primary goal is to avoid loans, then you’ll want to avoid any colleges whose costs will require you to take out loans. On the other hand, if you have a plan to pay back loans after college either through your career or other work, then a college payment plan with loans may be the right choice for you.

Also, before you commit to any college, make sure you run the institution’s net price calculator. This special calculator will give you an estimate of what a particular college will cost after any applicable grants and scholarships are deducted.


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BONUS Tips for Saving Money on College Applications - Obtain Fee and Application Waivers

It can be costly to apply to colleges and universities. If you are a low-income student, ask schools about application waivers. The SAT and ACT also offer fee waivers. Schools that accept the Cappex Application and Greenlight Scholars Application agreed to waive application fees for all applicants.


Popular Question: Should I work part-time while attending college to help pay for school? 

If at all possible, attend school full time. Your chances of graduating will increase. In fact, a new study says the chances of earning a bachelor’s degree increases significantly if you take 15 credit hours.

EAB, a consulting firm that tracked 1.3 million students at 137 schools, found that students who took at least 15 credit hours during their first year were 19% more likely to graduate. They also were more likely to return for their sophomore year and have higher grade point averages. Students who received Pell Grants, the study discovered, experienced similar results.

That said, if you personally feel that you have the bandwidth to work part-time while at school, you certainly can help pay for college by doing so. Out of the many ways to pay for college, working part-time during the school year is one of the most immediate. (For those with loans, money earned in college can facilitate a repayment plan that avoids most interest.) need help finding a place to work? Start with your college’s career center. There, you’ll find opportunities for employment through on-campus jobs, internships, and other positions in the area.


Pay for College with Cappex!

With 7 of the best ways to pay for college now covered, we hope this article has put you in a better position to fund the next step of your education. Want to take your research further? Ready to start securing funding?  Take some time to read other financial aid articles here on our site, and sign up to search and apply for scholarships in seconds.

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