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It’s no secret that college is expensive. It can be downright prohibitive for some people. But did you know that there are ways to pay for college even if you don’t have the money?
This article will discuss five different ways to pay for college without breaking the bank. So whether you’re a high school student trying to figure out your future or a parent who wants to give your child the best education possible, read on for some great tips.
And if you’re looking for a helping hand, consider hiring a financial advisor who specializes in college funding. While many financial advisors are knowledgeable on college planning topics, you may want to choose a financial advisor who has earned their Certified College Financial Consultant (CCFC) designation, especially if you have multiple children heading to college in the next several years.
We spoke with financial advisors in the Wealthtender community who share additional tips below.
A History of Tuition Costs
Before we get into how to pay for college, let’s first look at how tuition costs have changed over time. In the United States, the cost of attending college has been on the rise for quite some time. In fact, between 1985 and 2015, the average cost of tuition and fees at a public four-year institution increased by 213%. For private four-year institutions, the increase was 129% over the same period of time.
With numbers like these, it’s no wonder that many people are struggling to come up with the money to pay for college. But don’t despair! There are ways to make college more affordable.
The 529 College Savings Plan
One way to pay for college is to start saving early with a 529 College Savings Plan. A 529 plan is a tax-advantaged savings account that can cover qualified expenses at eligible colleges and universities. Family members or friends typically make contributions to a 529 plan, and the money in the account grows tax-free.
A tip that I would give parents that are wanting to plan for sending their child to college is to put as much money as you can into a 529 plan, invest it, and do it as early as possible.
I’ll usually give the example of how compounding and the market will work in their favor. The example I give is, let’s say you have 1 yr old and you put in $1000 today over 17 years with an 8% average return which turns into $3750. When they see how their money may triple in value, they get super motivated.
Nathan Mueller, MBA, CFP® | Blackbird Finance
Scholarships and Grants
Another way to pay for college is to apply for scholarships and grants. Scholarships are awards of financial aid that do not have to be repaid, while grants are typically need-based awards that also do not have to be repaid. In 2019-2020, prospective college students received an average of $7,626 in grants and scholarships, covering about 25% of their tuition and fees. There are a variety of scholarships and grants available, so it’s essential to do your research and find the ones you qualify for.
One excellent resource for finding scholarships and grants is College Aid Pro. College Aid Pro offers a free tool to help families discover financial aid and scholarship opportunities.
Work-Study Programs
Another way to pay for college is to participate in a work-study program. Work-study programs are federally funded and provide part-time jobs for eligible students. The money earned through these programs can help cover the cost of tuition, fees, books, and other expenses.
To participate in a work-study program, you must first complete the Free Application for Federal Student Aid (FAFSA). Once your college awards you financial aid, you will then be able to apply for work-study positions.
Payment Plans
Some colleges and universities offer payment plans that allow students to spread the cost of tuition and fees over the course of the semester or academic year. These plans typically require a small down payment and then monthly payments for the remainder of the balance. Interest is usually charged on the unpaid balance, so it’s essential to be aware of this before signing up for a payment plan.
Attend Community College First
One way to make college more affordable is to attend community college for the first two years and then transfer to a four-year institution. Community colleges typically have lower tuition rates than four-year colleges and universities, which can be a great way to save money.
In addition, many community colleges offer programs that allow students to earn credits that will transfer to four-year institutions. Community college can save you time and money by allowing you to complete your degree in a shorter period of time.
Utilize All of Your Resources
There are various ways to pay for college, so don’t let the cost deter you from getting the education that you want and deserve. If you’re willing to do your research and put in the work, you can find a way to finance your education without breaking the bank.
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About the Author
Max Marvelous
As a certified credit counselor and syndicated writer at MaxMyMoney, Max has coached over 250 Millennials to help take the stress out of money. When Max is not coaching, you’ll find him reading financial books, indoor cycling, or visiting local pawn shops looking for swiss-made watches.
To make Wealthtender free for readers, we earn money from advertisers, including financial professionals and firms that pay to be featured. This creates a conflict of interest when we favor their promotion over others. Read our editorial policy and terms of service to learn more. Wealthtender is not a client of these financial services providers.
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