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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 tuition, room and board, and other fees can cost from $10,000 to $80,000 a year. Here are some ways to make higher education more affordable.

Set up a 529 plan

If you have a younger child, it may be a good idea to set up a 529 plan. These accounts offer tax-free investment growth and withdrawals when used for qualified educational expenses. 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 requirements for receiving 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 forms and tax returns, retirement account statements, and information on savings and investments. For more information, visit

Assess your finances

Next, decide how much money you’re able to spend. Do you have savings available? How much will your child or others be able to pay each semester? 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

Many college scholarships are available for academics, sports, the arts, specific 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

The U.S. Department of Education offers educational grants that 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 a work-study program

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. Off-campus jobs may include working for a private nonprofit or public interest group who are partners with the school. To qualify for a 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 help you need. Call the financial aid office to ask for additional scholarships and advice on how to receive 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. Generally, you can choose from four types of federal student loans:

  • 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 a loan to help pay for college, it may make sense to tap into your home’s equity and take out cash to pay for college. Compared to higher-interest personal loans, mortgage interest rates are often fixed and may be lower. This option may give you 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 extend the life of your mortgage which will increase the amount of interest you will pay. In addition, while you may be able to deduct the interest on your original loan balance, the interest paid on the portion of the cash you receive to pay for college may not be deductible. You should also remember that your home will be 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 February 2024 by Freedom Mortgage.

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