How to Pay for College: 7 Ways to Cover the Cost
byKristina Cappetta
7 min to read
As of March 2025, the average cost of college tuition, fees, room and board, supplies, and other expenses at a private institution was $62,990 per year, three times higher than the average cost of education 30 years ago.
No matter which college your student chooses, the bottom line is that a college education has many families wondering many families wondering how to pay for college?
How do Most Students Pay for College?
Most students pay for college through a combination of resources including financial aid, student loans, scholarships, grants, and savings.
Financial Aid
Families looking for ways to pay for college often first want to find out if their children qualify for financial aid.
There are two types of financial aid:
Merit-based financial aid: Awarded to students who qualify based on their achievements, which could be academic, civic, or athletic.
Needs-based financial aid: Awarded to students whose family income indicates a need for additional support.
To determine if your student qualifies for needs-based financial aid, you’ll want to complete the Free Application for Federal Student Aid, or FAFSA. The FAFSA collects information on your household income. Filling out the FAFSA is an easy process, and there are plenty of resources to guide you along the way.
Many colleges use the FAFSA information, your student’s college application, and their college entrance exam scores to create a financial aid package. A financial aid package could include both needs- and merit-based grants and scholarships.
During the 2023-24 academic year, approximately 10 million college students received federal financial aid in the form of grants or loans.
Quick Tip: Each school typically offers its own unique financial aid package, so it is a good idea to do a cost comparison once you receive the packages from each institution.
Student Loans
Many turn to student loans to pay for college. Statistics from March 2025 show that 85% of undergraduates borrow money to pay for college, with the average full-time student borrowing more than $7,709 to attend. Student loan repayment can often be deferred until six months after graduation, but in most cases, the interest still accrues during that period.
There are two types of student loans:
Federal student loans. The federal government funds these loans. They have fixed interest rates and income-driven repayment plans, which are not usually offered with private loans. They are also capped. The amount your student qualifies for often depends on if they are still claimed as a dependent and how many college credits they have completed. Families must complete the FAFSA to apply for a federal student loan.
Private student loans. Students take out these loans directly from financial institutions such as banks or credit unions. There typically is no cap, and interest rates can fluctuate. Students can apply for private student loans at any time and for any amount.
Families should be careful when taking out student loans. Students should consider what their monthly payment amount will be compared with the average annual income of workers who have the degree they are pursuing to make sure they will be able to pay back the loans.
Due to the burden student loans can present, some parents can take out a loan through the Direct PLUS program. Direct PLUS loans are capped based on the tuition cost and payments can be deferred. A completed FAFSA form is required to determine eligibility.
How to Pay for College Without Taking Out Loans
Even if your student was unable to get financial aid or if the package does not cover all expenses, there are other ways to pay for college without taking out loans.
1. Work-study programs
Work-study programs are part-time jobs that allow students to work somewhere at their university while attending classes. Jobs could be anything from reshelving books in the library to working as a tutor or office aid. To qualify for the Federal Work-Study Program, you need to complete the FAFSA. Simply check the box to signify your interest in the work-study program if your student’s intended university participates in the program. This is not only a good way to pay for college but can also allow your student to gain valuable work experience.
2. Work during college
Some college students work off-campus while going to school to cover the cost of college. Finding an off-campus job at a coffee shop, retail store, or even in the field they are pursuing their degree through an internship or other job placement can help to offset college expenses.
3. Scholarships and grants
Unlike student loans, college grants do not need to be paid back unless the student does not complete their degree program. Grants are often need-based but may have other requirements. A completed FAFSA is required.
Federal grants include:
Pell grants
Teacher Education Assistance for College and Higher Education (TEACH)
Iraq and Afghanistan Service Grant
Federal Supplemental Educational Grants (FSEOG)
Scholarships also do not need to be repaid and are another terrific way to avoid student loans. Many scholarships appear on the student’s financial aid package after filling out the FAFSA, but not all. There are many private scholarships offered by businesses, non-profit organizations, civic groups, and school districts that are easy to apply for and often overlooked. In fact, it’s estimated that a regular high school student meets the qualifications for 50-100 scholarships; they just don’t know it. Doing your homework in this area can be a real game changer when it comes to paying for college.
The Department of Education offers guidance on finding legitimate private scholarships to help pay for college. Your student’s high school counselor can also guide you toward private scholarships your student may qualify for.
4. Savings
Many families use traditional savings or 529 plans when looking at how to pay for college. 529 plans allow families to invest money and make tax-free withdrawals for qualified education expenses like tuition and room and board.
Anyone can open a 529 plan for students, though some states have residency requirements. If you start early and invest even a little bit every month, you will have a nice savings account to finance college when the time comes.
There are also Education Savings Accounts (ESA). These accounts help to pay for educational expenses from kindergarten through college. Withdrawals are tax-free if they are used for eligible expenses.
5. ROTC
One of the ways to pay for college is for your student to join the ROTC program. The Army Reserve Officers’ Training Corps (ROTC) offers students scholarships of up to 100% of the cost of tuition plus money to offset room and board and books in exchange for serving in the Army as an officer after graduation. There are more than 1,000 colleges and universities that partner with the ROTC. While this path may not be for everyone, ROTC students are generally free of college debt and have a career waiting for them upon graduation.
6. Attend community college
Another smart way for students to save money on college tuition is to take general education classes at a community college, where tuition is generally much lower. Students can then transfer to a four-year college or university to complete their degree program. However, not all credits transfer to every university program, so find out if your credits will transfer before making the investment.
7. Take AP classes in high school
Students who can take Advanced Placement® (AP)* classes in high school can save on college costs. Many colleges accept AP courses for college credit, meaning that students may not have to take some of the required college classes if they score high enough on their exams.
While there is a fee to take the AP exam, it is much lower than taking an equivalent college course, and some high schools even cover the costs of AP exams.
Get support from school counselors
High school counselors are an excellent resource to help you and your student navigate the college application process. They can answer questions about the FAFSA, steer students toward scholarship opportunities, and help families weigh different college options based on a number of criteria.
Have your student connect with their school counselor early in their junior year to prepare for that next big step and select a college that meets their education needs—at a price your family can afford.
Though preparing for college can be stressful—after all, there is a lot to think about—paying for it shouldn’t be your primary concern. With all the financial resources available, there’s a good chance that you’ll find the right solution for your family.
*AP® and Advanced Placement® are registered trademarks of the College Board. Used with permission.
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