How To Pay for College: 12 Smart Strategies To Make It Work

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The cost of college can be overwhelming — with in-state tuition at public universities averaging around $9,750 per year and private school costs exceeding $38,000 annually. So how do families afford it?

The good news is that many do, often by combining multiple resources. This guide covers 12 smart and realistic strategies to help you figure out how to pay for college without breaking the bank.

12 Best Ways To Pay for College

There are many ways to pay tuition. A little creativity goes a long way toward finding funding sources.

Before diving into the full list, here’s a quick breakdown of some popular payment strategies — and what to watch out for with each.

1. College Savings Plans

College savings plans, such as 529 plans, and Coverdell education savings accounts, are the most common tools parents use to save for college.

529 Plans

• This tax-advantaged account functions as a pre-paid college fund where the money in the account grows tax-deferred.
• Withdrawals for qualified education expenses are tax-free.

Coverdell ESAs

• Contributions are limited to $2,000 per year, per beneficiary.
• Withdrawals are tax-free as long the money is used on qualified education expenses.
• Coverdell ESAs also have added flexibility — funds can be used for expenses like private school tuition, tutoring or special needs services before students enter college.

2. Dual Enrollment

Want to save money before college even begins? Dual enrollment is a program offered to high school students that lets them take college-level courses. For each course they complete, they earn both high school and college credits.

In some cases, these students graduate from high school with an associate’s degree that they can apply toward a bachelor’s degree.

Not only does this save them time, but it also can save money — and it’s one more creative option for how to pay for college.

3. Employer Tuition Assistance

Employers sometimes offer tuition assistance programs for workers and their families. They might use them as a recruiting tool or part of a benefits package.

Colleges and universities sometimes offer tuition assistance for employees and their family members who want to attend that school.

These programs typically only cover the cost of tuition and fees, and don’t usually include room and board and books.

4. Federal Loans

The federal government offers three types of financial aid: grants, work-study and loans.

To qualify for aid, students must complete the Free Application for Federal Student Aid (FAFSA), and meet the requirements for the aid.

Loans are available in amounts between $5,500 to $12,500 per year for undergraduates and up to $20,500 for graduate students.

5. Federal Grants

There are a variety of federal grants available to students. Here’s a look at a few:

• Pell grant: Available to undergraduate students who have not yet earned a degree and demonstrate an exceptional financial need.
• TEACH grant: College students who are willing to teach in a public school for a period of time after graduation may qualify
• FSEOG grant: Offered by participating colleges to students with exceptional financial need. Awards are given on a first-come, first-served basis, so early submission is key.

6. Federal Work-Study Programs

For the Federal Work-Study program, qualifying students will work part-time and earn federal minimum wage. For many students, this offers a worthwhile way to pay for school.

7. Grants

In addition to federal grants, students can apply for state and local grants to help pay for college. The qualifications and award amounts can vary, depending on the organization or state offering the grant.

Here are some examples:

• Florida offers a need-based grant for all students that starts at $200.
• In Illinois and Washington, students may qualify for a grant that pays their tuition costs.

8. Part-Time Job

Popular jobs for college students include waiting tables and tutoring. Many work in retail as well.

Consider starting a side hustle, like rideshare driving or making deliveries. The money you make can go directly to your college education.

9. Personal Savings

Parents and students often use personal savings or investments to fund a college education. In fact, 37% of parents and 11% of students turned to their own savings in 2024 for all or part of their college expenses.

One advantage of setting aside money in a savings account is liquidity. The money can be used for any college-related expense and does not have to meet eligibility requirements required by tax-advantaged accounts.

10. Private Loans

Banks, credit unions and other agencies offer private student loans for students who have already borrowed the maximum allowed by the federal student loan program or do not qualify for it.

These loans tend to be more costly than federal student loans, with rates ranging from around 4.50% to more than 16% APY, compared to a fixed rate of 6.53% to 9.08% for federal loans.

Also, private student loans do not qualify for federal and state-sponsored loan forgiveness programs. For these reasons, they tend to be a last resort option.

11. Scholarships

Many students rely on scholarships to pay for their college education. Scholarships are often known as free money since they don’t have to be paid back.

Students typically have to meet certain requirements to qualify for them. In some cases, the student must maintain a specific grade point average or participate in a club. Others look at athletic or artistic performance.

12. Family Members

If you have generous family members, you might turn to them when paying for college. In some cases, your grandparents, aunts or uncles might want to chip in to cover some of your college costs.

What’s the Best Way To Pay for College?

Generally, earning a scholarship or receiving a grant is the best way to pay for college. That’s because you won’t have to dip into savings or repay the funds in the future.

How To Pay for College Without Loans

If you want to pay for college without loans, some avenues include:

• Employer-sponsored tuition programs
• Personal savings
• A part-time job
• Start a side hustle
• Scholarships
• Grants

Make a point to exhaust all of your options before turning to loans. You could also take classes on a part-time basis while working full-time to cover your costs.

How To Pay for College by Yourself

If you are paying for college without help, some potential strategies include:

• Federal student loans
• Employer-sponsored tuition programs
• Personal savings
• A part-time job
• Scholarships
• Grants

You don’t need a parent or guardian as a cosigner to take out federal student loans. But, when possible, seek out other ways to pay for school before committing to loans.

How To Pay for College With Bad Credit

If you have bad credit, that likely won’t stop you from taking out federal student loans. Generally, student borrowers can tap into some level of federal student loans regardless of their credit score.

Beyond loans, consider other strategies, like a part-time job or a scholarship, to pay for school.

As you go through school, the following strategies might help you improve your credit score:

• Make on-time bill payments
• Avoid racking up credit card debt
• Don’t borrow more than you need

What’s Worth It When Paying for College?

A college degree is often a smart long-term investment. In 2024, the median weekly pay for someone with a bachelor’s degree was $1,543 — compared to $738 for high school grads. Over a lifetime, this difference adds up to more than $1 million.

A degree can also provide more job security, with lower unemployment rates among college grads.

Final Takeaway: Build a Plan That Combines the Best Options

Students have plenty of options when it comes to how to pay for college. The most effective strategy often combines several sources, including savings, scholarships and loans.

The key is to start saving as early as possible, make use of tax-advantaged accounts and apply for a variety of scholarships and grants to form a complete financial aid package. Income from a job and student loans can fill in the gaps as needed.

Allison Hache contributed to the reporting for this article.

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