In the U.S., college tuition is a considerable investment families and students have to make. Even Arnold Schwarzenegger paid for his son’s college tuition before letting him fly with his own wings. Often, college students must take on expensive loans, which might slow down their career. However, there are other options for students who want to fund their college expenses, without having to take on a loan.
Read on to learn more about the different ways to save money for college.
1. Federal Financial Aid
To pay for college tuition, you can reach out to the Federal Government. It is true that the U.S. is not famous for its government aid. However, they do have multiple financial aid programs to help youth attend university.
1.1 Need-based federal grants
To apply for the need-based scholarship, you must apply for a Free Application for Federal Student Aid (FAFSA). The general formula to apply for a need-based scholarship is the following:
Cost of attendance – Expected family contribution = Student need
Cost of attendance includes direct (college fees, housing…) and indirect (supplies, textbooks…) costs for college tuition. For a program such as the Federal Pell Grant, total student need amount should total between $20,000 and $50,000.
1.2 Federal Work-Study Program
Federal Work-Study Program is another way for the government to help college students fund their education. While working and studying at the same time may be complicated, it can be a smart move to apply the gained experience in your studies on a job.
1.3 Federal student loans
As the name states it, Federal student loans do imply taking on a loan. However, bare with us that the rates charged for a student loan are much cheaper than the ones offered by private institutions. They also provide several types of loans, meaning you do not have to fulfill the financial needs requirements to apply for one.
1.4 Parent PLUS loans
Another alternative to student loans are the Parent PLUS loans, which are also delivered by the government. These loans have a fixed interest rate set for the duration of the loan. The main difference resides in the fact that the parents are taking on the loans instead of the child.
2. Institutional Aid
The second way to fund your college expenses is to reach out for institution aid. Merit-based scholarships are pretty popular, especially among the sports academics. However, need-based scholarships are also accessible under certain conditions.
2.1 Need-based scholarship
Need-based scholarships are delivered by private institutions. They may have some additional requirements, such as ethnicity or academic standing.
2.2 Merit-based scholarship
Contrary to popular belief, merit-based scholarships do not require outstanding academic performance. However, the market is indeed highly competitive. We recommend you apply to various different colleges to maximize you chances of earning one.
3. Company Financial Aid
While a common tip to fund college tuition might be to get a job, some workplace can even fund some or all of your courses. Companies like Starbucks, Uber and Chipotle are becoming popular college sponsors. Other companies like Wells Fargo also have programs to help parents provide for their children’s college fees.
3.1 Tuition Reimbursement Program
The Tuition Reimbursement Program is provided by a couple companies. Tuition fees can be fully or partially paid by these companies. However, this program does imply for the student to bare the full tuition first. The Reimbursement Program then takes place only if the selected courses are in line with the job the student is employed for.
3.2 Direct Bill Program
The Direct Bill Program on the other hand requires the company to pay for the courses. However, similarly to the Tuition Reimbursement Program, courses must align and serve the employee’s job within the company.
3.3 Lump Sum Program
The Lump Sum Program may be a little trickier to acquire. However, the concept is close to the Direct Bill Program one. With the Lump Sum Program you can leverage a considerable amount of money which you can invest for higher education, including courses that will benefit the company you are working for.
3.4 Parents Tuition Reimbursement Program
Similarly to the Parent PLUS loans we saw in 1.4, Parents Tuition Reimbursement Program is a program where some companies will assist their employee’s children’s to pay for their education if attending a specific school the company is partnering up with.
4. Military Tuition Assistance
On another note, if you, your spouse or your parents are in the military, you might also have access to the Military Tuition Assistance who can help you pay for college.
According to the Military One Source website, eligibility is strict and does include a limited amount per credit hour and, indeed, the full completion of the course. Yet, it can be an interesting funding solution.
5. Thinking Ahead
Another way of thinking about college tuition is to think ahead. If you are still in High School and aware of the financial responsibility that goes along with loaning money for college expenses, you can start taking Advanced Placement Courses, target high-pay jobs or attend low fee colleges.
5.1 Advanced Placement Courses
Advanced Placement Courses are a great way to limit college fees for Undergraduate students. Of course, one must know what courses they will be applying for in advance. If that’s the case, there is no need to wait until college to start earning the credits required for the degree.
5.2 High-Pay Job
Another way to consider the college funding problematic is to think about it reversely. The issue is maybe not about having the money to fund it today, but rather about having the money to pay back for it tomorrow. Following that line of thought, one can target high-paying careers, companies, and jobs and not have to worry as much for college tuition, as they’ll be sure to be able to cover it after college.
5.3 Community College
The last option is to target a Community College, where tuition fees are less expensive than regular ones. Other savings habits such as eating at home, living with one’s parents or cutting leisure expenses can also be of use when trying to save money.
On that note, let’s hop on to our last way to pay for college without taking on a student loan.
6. Saving Money
If you don’t want to take on a loan to pay for college tuition or if you don’t want your children to have debt early on in life, and you can’t access any of these cumulative solutions, then you’re in the right place. Here is our plan for you.
6.1 Take on a job
You can choose a part-time one that you can cumulate with your studies. However, you can also take a year off to go for a full-time one. Indeed, working and studying are both complicated to manage. Furthermore, going all-in for a job, may allow one to make more money and, with the right savings habits, may be able to save for more than just college.
6.2 Assimilate savings habits
We’re not suggesting taking a year-off for fun! Instead, save up as much money as you can during the year. Reduce all expenses to the bear minimum and work as much as you can (without burning out).
To help you, you can check out our related article where you can download a personal finance starter course for free.
6.3 Open up a savings account
This part is crucial. You cannot let your savings aside or they’ll burn due to inflation. Instead, set up on a savings account, like Finnt, for them and let compounding interests operate and help you build wealth over time.
6.4 Enroll in college
Even if you have enough to pay for the full year, do not do so. Pay a minimum of courses at a time – if you can add a part-time job on top to add on to your revenue, that would be ideal. You don’t want to pay all at once, because you want the money you saved to continue working for you, and not for them!
We hope this content helped, and gave you a good grasp of financial solutions to pay for college tuition for you or a family member!