It can be challenging to determine the right way to fund your college education, which is why we’ve narrowed down six ways to pay for college in 2020.
With the cost of education on the rise, it’s important to make the right decisions to get the most out of your college investment.
The cost of attendance (COA) is the dollar amount that colleges and universities use to refer to tuition, fees, books, supplies, living expenses, and more. It’s important to factor in the COA when deciding which college to attend because the cost can vary significantly from institution to institution.
For the 2019-2020 academic year, the average annual cost of tuition, fees, housing, and food was $30,500. The average spending depends on the institution you plan to attend (private versus public), the cost of living in that area, whether you will be an in-state student, and more.
2-year public institution (in-state)
4-year public institution (in-state)
4-year public institution (out-of-state)
4-year private nonprofit institution
Attending a community college for the first two years can save you thousands of dollars and put you at an advantage for the next stage in your education. Additionally, if you are an in-state resident and attend a public university, you can attend college at a lower cost.
State taxes play a significant part in school funding, and residents who attend school in-state receive lower tuition rates. On the other hand, private institutions can offer generous aid packages to undergraduates with financial need, which is why it’s integral to compare your options.
Scholarships might seem too competitive and not worth trying; however, they should not be discounted. Not all scholarships are based on academics and may focus on special skills, talent, and financial need. Regardless of grades and test scores, many scholarship opportunities are available.
Many scholarship dollars go unclaimed because many people do not know that some scholarships exist, so we recommend looking into less conventional scholarship opportunities.
Scholarships can range from a few hundred dollars to the entire cost of tuition.
The best part about scholarships is that you can apply and qualify for more than one scholarship at a time. Start your hunt for scholarships early so that you can take advantage of every opportunity available.
Other resources for scholarship opportunities include:
The federal government, state governments, colleges, and private organizations offer grants to help pay for college. Unlike loans, grants are free money that typically does not need to be repaid.
The U.S. Department of Education offers several grants for four-year colleges, universities, community colleges, and career schools:
One thing to note is that all of the grants listed above are only available to students with financial aid. To qualify for financial aid, complete the Free Application for Federal Student Aid (FAFSA). If you qualify for any form of financial aid and plan to keep it, it is important to fill out the FAFSA every year that you attend school.
Working while attending college can offer you invaluable experiences that can put you miles ahead of your peers. Paid internships or jobs related to your future career are a great way to gain valuable insight and cover expenses.
Do you want to work in health care? Consider working as a scribe in the emergency room to get on-the-job experience. Do you plan on becoming a software engineer? Apply for paid internships that will help you pay for school while also getting the upper hand in the field.
Alternatively, you can see if your employer provides tuition reimbursement. Nowadays, many employers offer tuition reimbursement as a job benefit.
Additionally, the federal government offers work-study jobs to help students earn money to cover educational expenses. The Federal Work-Study program is available to undergraduate and graduate students. Qualifying students work part time on or off campus while enrolled in this program. The Federal Work-Study program is for students who demonstrate financial need.
Please note that not all schools participate in this program. Check with the financial aid office of the school that you would like to attend to see if they offer the Federal Work-Study program.
The IRS offers a tax credit to qualifying individuals. Whether you are a student, spouse, or parent, you might be eligible to deduct qualifying educational expenses from the past year.
Qualified educational expenses can include tuition, borrowed funds, and more. The institution in which you are receiving an education must also be eligible. These institutions can be any college, university, or vocational school that participates in the federal student aid program. The tax credit will not cover your tuition, but it can help you receive reimbursement funds to help cover tuition.
To qualify for a student loan, you must complete the FAFSA. If you are eligible for a student loan, you will need to complete it annually to continue receiving funding.
Federal student loans are a great way to fund your education and typically have better benefits than private loans. Deciding to take out a student loan is a big step, so you should make sure that you fully understand the terms of the loan before signing.
The federal government offers several student loan options to help you fund your education:
Sometimes, students might need additional funds to cover their education. As a result, they might need to apply for a private student loan. It’s usually best to consider federal student loans first, as they have fixed interest rates, income-driven repayment plans, and benefits not often offered by private loans.
Private student loans are non-federal loans, which means they are through a private lender. These lenders can include a bank, credit union, state agency, or school. Most private student loans have variable interest rates, which can be higher or lower than federal interest rates.
Financially planning for college can be a burden, but with the right tools, you can pave the right way to getting the most out of your postsecondary education. Take advantage of the tips above to make the most out of your college investment.
At CollegeFinance.com, we offer various resources to help you make informed decisions about college, whether you’re planning, borrowing, or repaying.