The Ultimate List: 14 Tips and Strategies to Paying for College

The Ultimate List: 14 Tips and Strategies to Paying for College

College is not cheap. This is likely the most obvious statement you’ll read today. According to the USA Today, average student loan debt in 2014 was nearly $30,000.

As your child gets closer to college, you’re likely at least somewhat stressed about how to pay for it. If you’ve been planning since your child was young, then kudos to you. But if you started late, all hope is not lost.

Luckily we have tips and ideas to help parents or students reduce the potential debt burden.

Apply for Federal Loans and Grants

Parents often mistakenly assume they are too well off for their child to qualify for federal loans. But according to US News and World Report: “Whether you’re Bill Gates’s kid or a family with zero income, you can get a federal Stafford loan.”

Federal loans are cheaper and have more flexible payment options. Private loans typically include much higher interest rates, as well as fees for late payments.

Another misconception is that applying for federal loans is a complicated process. The FAFSA (the application for student eligibility to federal loans and grants) may look intimidating, but students should not be scared away. According to “There are a lot of myths about the FAFSA — it’s really arduous, it’s hard to fill out, it will take forever. Really it takes about half an hour, and based on your financial need, you can qualify.”

Grants may be an options, but are often reserved for students who demonstrate a certain amount of financial need.

Even if college is around the corner and your child has yet to apply for financial aid, do not assume it’s too late. Students should search the internet, community listings, and the high school counseling office for last-minute options.

Maximize Chances for Financial Aid

If you’ve started saving for college, make sure these funds don’t limit your family’s financial aid package. Families should place these assets in accounts held in the parents’ names. According to “The first dollar of assets held in the student’s name will impact a family’s expected contribution. That can lower the financial aid package.”

Student assets (savings account, investment in your child’s name, etc.) are assessed at a rate of 20%. So for every dollar the student saves, the federal government will subtract 20 cents from every dollar in the student’s financial aid package. On the other hand, parent assets are assessed at a much lower rate, with a maximum of 5.64%.

Parents can also help themselves by prioritizing their payments. The federal aid formula considers assets like stocks, mutual funds, and certificates of deposit. However, other investment vehicles like retirement plans, life insurance plans, and equity in a primary residence are not considered in the formula. In short, your family will likely be considered for more financial aid by sticking assets in places that aren’t considered by the FAFSA.

If financial aid is critical, students should be strategic about the schools to which they apply. If a student is accepted to a school where he or she is in the top 30% of applicants, the chances are much greater of receiving a substantial financial aid package.

Apply for Scholarships

There are many different kind of scholarships available for everything from academics and sports, to special talents such as musical ability or proficiency in science. Don’t just check with colleges for scholarships. Many businesses, local organizations, and professional groups also offer scholarships and other awards.

A student can maximize chances of winning a scholarship by applying to those he or she is most likely to win. Just keep in mind, an outside scholarship could affect your financial aid offer from a college.

A few resources that may aid your scholarship research include CollegeBoard, Fastweb, Niche, and moolahSPOT.

Choose the Right School

Obviously, the cost of college can vary wildly depending on the school. By choosing a more affordable college, students can save a lot of money in the long run. Typically, public schools are cheaper than private colleges. Also, qualifying for in-state tuition provide significant savings.

Also consider the financial aid programs of your target schools. Colleges vary significantly in the amount of aid they have to offer.

Consider Starting at Community College

While not perceived as prestigious as four year schools, community colleges are often are great alternative. After two years of community college, students can transfer to traditional schools and only be on the hook for two years of higher tuition.

Remember, employers ask where you graduated from, not where you started.

Find Work Study Programs through the College

Student employment through the university is a great option to help students fund their college expenses. These jobs may also fit with a student’s particular area of study, providing valuable experience.

Consult the Federal-Work study program for an overview of potential opportunities.

Additionally, by becoming an RA (resident advisor), your child could get free room and board. This could save significantly on expenses.

Get a Part-Time Job

In addition to helping your child to pay for college expenses, a part-time job could also help him or her boost her grades. According to the USA Today, studies show that students who work 10 to 15 hours per week actually have higher GPAs and are more likely to graduate.

Research Employer Reimbursement Programs

Many employers such as Chipotle, Chrysler, and Starbucks offer tuition reimbursement programs. For instance, Starbucks will pay half the tuition for an employee’s freshman and sophomore years. Furthermore, provided the employee/student is still in good standing, Starbucks offers full tuition reimbursement for both the junior and senior year.

Save on Non-Tuition Related Costs

Depending on your parental perspective, the next option may delight or horror you: consider your child continuing to live at home while going to college. While the experience of living on campus is valuable, forging boarding can greatly reduce expenses.

Also, students can save on expensive meal programs by learning to prepare some of their own meals. With mini-fridges, microwaves, and hot plates, a full kitchen is not a necessity.

Graduate on Time

Surprisingly, most students take more than four years to graduate, adding significantly to the tuition bill. According to the USA Today, the average student takes 4.5 years to graduate. USA Today further suggest students choose a major early to ensure all requisite classes are taken for an on-time graduation.

Consider Public Service Professions

A drawback of working in public service is that salaries in fields such as social work, education, and public defense tend to be less than salaries in other fields.

However, under the federal Public Service Loan Forgiveness Program, students with federal loans who work in public service are eligible to have any leftover federal debt waived after making 10 years of consecutive payment.

Furthermore, these borrowers can apply for a federal income-driven repayment plan, which sets student loan payments at between 10% to 20% of discretionary income.

Maximize your Tax Savings

Don’t forget the tax breaks that may come from paying tuition. For instance, with the American Opportunity Tax Credit, students can get a maximum annual credit of $2,500. If the credit brings the amount owed to zero, students can get 40% of any remaining amount of the credit refunded. (up to $1,000)

Consider a Service Commitment

Forbes suggests considering a service commitment in order to defray college expenses. Options include AmeriCorps, Peace Corp, National Health Services Corps, and ROTC programs.

Call on that Deep-Pocketed Relative

Got a rich uncle with money to spare? It might be time for a visit. If this is an option, at least your odds are better than playing the lottery.


Paying for your child’s college education may keep you up at night, but as this article demonstrates, you do have options. With a bit of due diligence and a lot of research, you may discover fantastic opportunities you never knew were possible.

Finally, it’s also not too soon to begin preparing your child for life after college. Part of this preparation is building and maintaining good credit. In addition to educating your child about responsible credit use, you could make him or her an authorized user on your credit card or co-sign for your child’s own card.

To find a card for your child, the best place to start may be a local community bank like the Bank of Southside Virginia. Most banks offer credit cards, but with local roots, your community bank may take more time to help you and your child determine the most sensible option.



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