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How to Pay for College: 8 Tips
To pay for college, submit the FAFSA to access grants, scholarships and work-study before taking out student loans.
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Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.
Karen Gaudette Brewer Lead Assigning Editor | Core Personal Finance
Karen Gaudette Brewer leads the Core Personal Finance team at NerdWallet. Previously, she guided students and their families through the ins and outs of paying for college and managing student debt on the Higher Education team. Helping people navigate complex money decisions and feel more confident brings her great joy: as the daughter of an immigrant, from an early age she was the translator of financial documents and the person who called the credit card company to fix fraud.
She joined NerdWallet with 20 years of experience working in newsrooms and leading editorial teams, most recently as executive editor of HealthCentral. She launched her journalism career with The Associated Press and later worked for The (Riverside) Press-Enterprise, The Seattle Times, PCC Community Markets and Allrecipes.com.
She is a graduate of the 2022 Poynter Institute Leadership Academy for Women in Media. Her writing has been honored by the Society for Features Journalism and the Society of Professional Journalists. In addition, she’s the author of two books about the Pacific Northwest.
Eliza Haverstock Lead Writer | Student loan repayment, paying for college
Eliza Haverstock is NerdWallet's higher education writer, where she covers all aspects of college affordability and student loans. Previously, she reported on billionaires and investing for Forbes in New York, and she also covered private markets for PitchBook in Seattle. Eliza got started at her college newspaper at the University of Virginia and interned for Bloomberg, where she spent a summer writing a feature story about plastic straws. She is based in Washington, D.C.
When paying for college, some forms of financial aid are better than others.
Money that you don't have to pay back should take priority — like scholarships, grants and fellowships — followed by income from work-study programs, or even employer assistance if you can work while enrolled.
To keep college costs manageable, exhaust free financial aid before taking out student loans when planning how to pay for college.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.59-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Variable APR
5.34-17.99%
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1)All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2)As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3)This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formula for student loan products takes into account more than 50 data points across multiple categories, including repayment options, customer service, lender transparency, loan eligibility and underwriting criteria.
Fixed APR
3.49-15.49%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Variable APR
5.04-15.21%
Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 10/25/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.
Credible lets you check with multiple student loan lenders to get rates with no impact to your credit score. Visit their website to take the next steps.
1. Fill out and submit the FAFSA
Fill out the Free Application for Federal Student Aid to receive federal aid like grants, work-study opportunities and even federal student loans. You can also qualify for state-level and school-based aid.
Be as thorough as you can when filling out the FAFSA. The federal government uses this to gauge what resources you and your family have to pay for college. For example, if you or your parents saved money in a 529 plan — a state-sponsored tax-advantaged college investment account — you'll be expected to tap into this to cover your costs.
Submit the FAFSA as soon as possible because some colleges award both need- and merit-based money on a first-come, first-served basis. In addition to the FAFSA, some schools also require you to complete the CSS profile to be considered for aid.
You don’t have to wait until you’re a senior in high school to start your scholarship search. In fact, it could pay to start earlier. For example, the Evans Scholars Foundation awards full-ride scholarships to hundreds of golf caddies each year. But you have to be a caddie for at least two years to qualify, which means you’d have to start caddying during your sophomore year in high school at the latest to be eligible by the time you apply at the beginning of your senior year.
Scholarships, unlike student loans, don’t have to be paid back. Thousands are available; use the Department of Labor’s Scholarships Finder to get started. While many scholarships require that you submit the FAFSA, most also have an additional application.
Paying for college will be easier if you choose a school that’s reasonably priced for you. To avoid straining your bank account, consider starting at a community college or technical or trade school.
If you opt for a traditional four-year university, research the school's net price — the cost to you after grants and scholarships. This will show you your out-of-pocket cost instead of solely focusing on the sticker price.
For example, if a $28,000-a-year school doesn’t offer you any aid, and a $60,000-a-year college offers you $40,000 in aid, the school with the higher sticker price could be a better option because of it's lower net price.
Schools have net price calculators on their websites to help you estimate the amount you’ll have to pay out of pocket.
Don’t make that mistake. As long as you submit the FAFSA and renew it each year you’re enrolled in school, you’ll receive Pell money if you’re eligible for it.
In addition to the need-based Pell program, the federal government offers several other types of grants, which also don’t need to be paid back in most cases. Many states have grant programs, too. Usethe Education Department's state education contacts and information locator to find the agencies in your state that administer college grants. Then look up and apply to state grant programs you may qualify for.
A college job checks multiple boxes: It provides an income, work experience and potentially valuable connections. The federal work-study program funds part-time jobs for college students with financial need.
To apply for work-study, submit the FAFSA. If you qualify, you’ll see “work-study” listed on your financial aid award. However, just because you’re eligible for work-study doesn’t mean you automatically get that money. You have to find an eligible work-study job on your campus and work enough hours to earn all of the aid you qualify for.
6. Work for an employer that pays for college
Nearly half of employers offer undergraduate or graduate tuition assistance, according to a 2022 survey by the Society for Human Resource Management, the latest research available.
A company can help you afford college by covering a percentage of costs, a flat amount, or even 100% of tuition. For example, you have access to more than 250 business-aligned programs from more than 40 schools, colleges and universities if you work at Target.
Employer tuition assistance programs can come in the form of tuition reimbursement — where you're reimbursed for tuition you already paid — or the company can pay the school directly. Employer student loan repayment can help you pay off your student debt faster.
When applying to jobs, research what educational benefits they offer. And if you're already employed, connect with the human resources department to see what is available for you.
You don’t have to say yes to all the aid you’re offered — especially student loans. As a rule of thumb, aim for student loan payments that don’t exceed 10% of projected after-tax monthly income your first year out of school.
If you do need to use private student loans, compare your options before you choose a lender. Shop around to find the lender that offers you the lowest interest rate and the most generous borrower protections, such as flexible repayment plans or the option to put your loans in forbearance if you’re struggling to make payments.
It is also harder to qualify for private loans. Unlike federal loans, most private loans take into account a potential borrower’s credit score and finances. Borrowers with strong finances or those who have a co-signer with strong finances stand to get lower interest rates and more favorable loan terms. There are also private student loans designed for borrowers with poor or no credit.
Remember: After you leave school, you’ll have to pay back any money you borrowed. Many student loans — all but federal subsidized loans — accrue interest while you’re in school, which means you’ll have to pay back more than you originally borrowed. You can use a student loan calculator to see how much you'll owe later based on what you borrow now.
