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How to pay for college

Tips and resources to help make college more affordable

Whether your child is already applying to colleges, or you are a few years away, it’s a good idea to start thinking about how to pay for it. Depending on where your child goes to school, college can cost from $10,000 up to $80,000 a year. Here are some ways to make higher education more affordable.

Set up a 529 account

If you have a younger child, it’s a good idea to set up a 529 account. These accounts allow you to invest money tax-deferred with tax-free distributions when used for expenses such as tuition, fees, books, supplies, and some room and board. This is an easy way to get started saving for college with minimal effort or maintenance since you can set up automatic deposits. Grandparents and other family members can also help set up 529 accounts.

If college is just around the corner, here are additional suggestions to plan for this expense.

Fill out the FAFSA application

One of the first steps in college financial aid is to fill out the Free Application for Federal Student Aid (FAFSA). FASFA forms are available on or after October 1st for the following school year. Financial aid offices in colleges and universities use this application to determine eligibility for aid, including loans, grants, scholarships, and work study. This will help you estimate how much aid you might receive.

Even if you think you won’t get financial aid, it can be worth filling out the FAFSA. You have nothing to lose and you may be pleasantly surprised. When you are ready to fill out the form have information on hand like social security numbers, driver’s licenses, W2 and tax returns, retirement account statements, and information on savings and investments. For more information, visit

Assess your finances

Next figure out how much money you have to spend. Look at any 529 accounts you have to see how much these savings can contribute. Put together a monthly budget to estimate how much you can contribute from your current income. Knowing how much you can afford will also help you focus on schools that are in your price range.

Compare prices

When creating a list of potential schools, make sure you include the cost of tuition and room and board as well as other expenses like books and travel. If you find schools with similar programs and reputations and one is less expensive, think about choosing the more affordable school. Public colleges can be just as good as private schools without the hefty price tag. But don’t rule out private schools as they often have endowments and generous merit scholarships.

Research scholarships

There are many available college scholarships for academics, sports, the arts, fields of study, special interests, and more. You may be surprised by the scholarships available to your student. Information about scholarships can be found at:

  • The financial aid office of the college
  • High school guidance counselors
  • U.S. Department of Labor free scholarship tool
  • Religious, community or business organizations
  • Parent’s employers
  • Professional organizations related to the field of interest

Look at federal grants

These grants are from the U.S. Department of Education and generally do not need to be paid back. They are for students who have exceptional financial need. You can find a list of the federal grant programs at

Check out work study

The Federal Work-Study program provides part-time jobs for students with a financial need. These jobs are available to full or part-time students and can be on or off campus. On campus jobs include working for the school in the library, dining hall or helping a professor and off-campus would be a job at a private nonprofit or public interest group who are partners with the school. To qualify for work study, completing the FAFSA is required. Work study is often part of financial aid packages.

Ask for school assistance

If your top choice school isn’t offering you the money you need and other schools are offering a better financial aid package, go back and ask your top choice for more money.

Before you ask, put together a list of the schools and the amounts they offered. Don’t forget to include the costs of books, supplies, and transportation as well as tuition, room, and board in your estimate of total expenses. This will help you determine how much extra you need. Call the financial aid office and ask for scholarships and how you can appeal for more financial aid. You may be asked to submit a letter detailing any changes in income, offers received from other schools, or other supporting documents.

Take out a student loan

Borrowing money is another way to pay for college. There are four types of federal student loans, which you’ll see below.

  • Direct Subsidized Loans are made to undergraduate students who demonstrate financial need.
  • Direct Unsubsidized Loans are available to undergraduate and graduate students. There is no requirement of financial need.
  • Direct PLUS Loans are unsubsidized loans for parents of dependent students.
  • Direct Consolidation Loans allow you to combine federal student loans (for example, if you have loans for two or more children) into a single loan.

You can also learn more about these loans at

Consider using the equity in your home to get cash

If you need to take a loan out, it may make sense to tap into your home’s equity and take out cash to pay for college. Some benefits are that the interest rates are fixed and may be lower, you can have more time to pay the money back, and you may be able to access more money than you would from student loan programs.

Keep in mind these loans will likely extend the life of your mortgage, will increase the amount of interest you pay, there are no tax deductions on the interest when you use the cash for college tuition, and your home is used as collateral on the loan. Freedom Mortgage can help you borrow from your home’s equity to pay for college with a cash out refinance.

Freedom Mortgage Corporation is not a financial advisor. The ideas outlined above are for informational purposes only and are not investment or financial advice. Consult a financial advisor before making important personal financial decisions.

Last reviewed and updated March 2023 by Freedom Mortgage Corporation.

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