Paying for College 101: 7 Ways to Find Money for College

8 min to read
Image of a daughter in a white shirt and mom in a grey sweater working on college applications and finacial aid applications.

If you have a high school student that dreams of going to college, then you're acutely aware that achieving that dream can be expensive –often very expensive.

Between 1980 and 2020, the average price of tuition, fees, and room and board to earn an undergraduate degree increased by 169%, with the average annual cost rising to $36,436 for the 2022-2023 academic year. Considering that the real median household income in the United States in 2022 was $76,330, the cost of college seems painfully out of reach for many families.

College offers many benefits, though, including gaining the knowledge and skills for a lifelong career, meeting new people, and exploring new ideas. College graduates also make more money over their lifetime than people who forego college.

For many, the benefits of going to college make the high cost of tuition a worthwhile investment. 

Navigating Financial Aid

If your student has decided that pursuing a higher education degree is right for them, it’s time to find ways to pay for college. In addition to applying for grants and scholarships, financing college begins with knowing whether your student qualifies for financial aid.

There are two types of financial aid:

  • Needs-based financial aid, which is awarded to students whose family income indicates a need for additional support.
  • Merit-based financial aid, which is awarded to students who qualify based on their achievements, which could be academic, civic, or athletic.
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Filling out the FAFSA

A big question families often ask is how to get grants for college and other scholarships. A good place to start is by completing the Free Application for Federal Student Aid, or FAFSA. The FAFSA collects information on your household income to determine if your student qualifies for financial aid.

Many colleges take the FAFSA information along with your student’s college application and college entrance exam scores, if applicable, to create a financial aid package, which could include both needs- and merit-based grants and scholarships as well as work-study opportunities, which are designated jobs on campus to help them cover the cost of college and get a start on building work experience.

Based on that package, you can compare the real cost of tuition, fees, and room and board at each college your student is considering. Each school typically offers their own unique financial aid package, so it is a good idea to do a cost comparison once you receive the packages from each institution. 

Looking Beyond Financial Aid: 7 Ways to Pay for College

For many families, there is a gap between what the financial aid package covers and what the student will still owe for tuition, fees, and room and board. For others, the FAFSA can be so overwhelming they don’t complete it and must figure out how to pay for college without financial aid.

 There is no single best way to pay for college – every family and situation is different. But if you’re looking to learn more about how to pay for college, here are seven options beyond the financial aid package: 

1. Student Loans

Student loans are a common way to help students cover the cost of tuition. Student loan repayment can often be deferred until six months after graduation, but the interest still typically accrues on the loan during that period.

There are two types of student loans:

 Student loans – like any loan – should be approached with caution. The recent student loan crisis, where millions of graduates are unable to pay back their student loans, highlights some of the problems with this solution for financing college.

It’s easy for students who don’t have much financial literacy experience to take out loans they can’t afford after entering the working world. Many don’t fully grasp the impact of compounding interest, especially during periods when the loan is deferred, or calculate the amount of their monthly payments. Students should review numbers carefully to determine the real cost of their loan and to try not to cover the entire amount of their college costs with student loans alone – federal or private. 

2. Private Scholarships

It’s estimated that a regular high school student meets the qualifications for 50-100 scholarships; they just don’t know it. Scholarships are an excellent option for paying for college - students don’t have to pay it back like they do a student loan.

While many scholarships could appear on their chosen school’s financial aid package, there are many private scholarships offered by businesses, non-profit organizations, civic groups, and school districts that are just waiting for students to apply.

The Department of Education offers guidance on finding legitimate private scholarships to help pay for college costs. Your student’s high school counselor can also guide you towards private scholarships your student may qualify for.

3. Parent Loans

If you don’t want your students burdened by student loans, you could opt to take out a parent loan. The federal government offers parents loans through the Direct PLUS program. PLUS loans are capped based on the cost of tuition at the chosen college and can be deferred. You must complete the FAFSA to determine eligibility for a PLUS loan. 

You can also take out private loans from a financial institution. You should consider all of your options before taking out a loan, as you may end up repaying the loan at the same time you are thinking about retirement.

4. Savings

Almost every state offers “529 plans” to help families pay for college. These are investment plans that 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 for your student when the time comes.  

Beyond 529 plans, students and families could dip into traditional savings to cover the cost of college. For high school students, working a summer job is a great way to grow savings to help cover college costs. 


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, upon graduation ROTC students are generally free of college-debt and have a career waiting for them. 

6. Attend Community College

A great way for students to save money on college tuition is to spend the first two years taking general education classes at a community college at a much lower tuition rate. 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 do some research into how your credits will transfer before making the investment.

Community college can also be a great solution for students who are undecided about their major or career path. They can explore different subjects to see what they like at a much lower cost. Community colleges are typically close to home, giving the added benefit of saving money on room and board.   

7. Take AP Classes in High School

Another way to save money on tuition is to take Advanced Placement® (AP)* classes in high school. Many colleges accept AP courses for college credit, which means that students may not have to take some of the required first-year college classes, which can help save money on college tuition, boost their GPA so they better qualify for additional scholarships, and could help them graduate early. While there is a fee to take the AP exam, it is much lower than taking a college course, and some schools cover the costs for AP exams for their students.

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Support from School Counselors

High school counselors are a great resource to help you and your student navigate the college application process. They can answer questions about the FAFSA, steer students to scholarship opportunities, and help families weigh different college options based on a number of criteria, including cost.

Have your student connect with their school counselor early in their junior year to prepare for taking that next big step and selecting a college that meets their education needs – and that is affordable. 

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