Scholarships are one of the best ways to pay for college — after all, it’s free money you don’t have to pay back.
Because there are many possible sources of scholarship funds, most people can get at least some scholarship money, especially if they start searching for opportunities early.
Unfortunately, most students can’t fund their entire education with scholarships. If you need to find other ways to pay for college, read on to discover six options to turn to when scholarships aren’t enough.
Like scholarships, grants are awards that don’t have to be repaid. There are many sources of grant funding, including Pell Grants from the federal government and grants from individual states, such as New York’s Tuition Assistance Program.
Many grants are need-based, while others are awarded based on academic performance. To be eligible for federal or state grant funding, you’ll need to complete a Free Application for Federal Student Aid (FAFSA). Some states also require you to apply directly to their education department to be eligible for state grants.
Check out this complete guide to state grants to find information about your state’s options.
Covering the cost of college with savings is also a great way to fund your education since it can reduce or eliminate the need for student loans.
While tuition is expensive, attending a community college is much cheaper and easier to fund with savings. In fact, community college students pay an average annual tuition of just $3,440, according to CollegeBoard — roughly three times less than those at a four-year school.
Starting out at a community college has become so popular that many schools now market special 2 + 2 programs, which allow students to complete their first two years at a community college before transferring to a partner program at a four-year university.
Because the cost of community college is so low, you may be able to fund most or all of your first two years of college with money you already have in the bank.
3. 529 savings plans
Parents can stretch their funds even further by investing in 529 plans, which provide tax-breaks for college savings.
There are two types of 529 plans: One allows parents to prepay for tuition at a specific school or in a certain state, and the other allows money to be invested for use at any institution. When parents use a 529 plan to save for college, the money they contribute grows tax-free.
If you’re a parent and you want to be able to pay as much as possible for your child’s education, investing in a 529 plan and taking advantage of these tax breaks will allow your investment dollars to work harder. This will make it much easier to build a nest egg big enough to cover at least a portion of your child’s college costs — and hopefully more.
4. Work-study programs
Federal work-study programs provide students the opportunity to help fund their educations by working either on or off campus. Work-study jobs are typically related to the student’s major, and employers must accommodate the student’s class schedule.
Work-study programs are a form of financial aid, so you’ll need to fill out the FAFSA. Your school must also include work-study as part of your financial aid package in order for you to be eligible for a job. Eligibility is based on financial need, so you’re more likely to be offered this option if your family doesn’t have a lot of income.
Unfortunately, funding for work-study jobs is limited and there’s no guarantee a job will be available when you need one. Learn more about this option in our complete guide to work-study programs.
5. Federal student loans
If you’ve exhausted your options for school funding that you don’t have to pay back, federal student loans are typically the next best option.
Federal loans for students provide many more borrower protections than private loans, including loan forgiveness for individuals who work in qualified public service jobs as well as income-based repayment plans to keep payments from becoming too high.
Federal loans don’t require students to have a cosigner, and approval isn’t based on your income or credit score. Unfortunately, there are limits to the amount you can borrow, so federal loans may not fully cover the costs of your education.
Parents can also apply for loans through the federal government in the form of Parent PLUS Loans, although these work differently than loans for students. Parents do not get all the borrower protections students do, and parents with adverse credit likely won’t qualify for PLUS Loans.
You can learn all about federal loan options in our comprehensive guide.
6. Private student loans
When scholarships aren’t enough, consider taking out a private loan. However, most students shouldn’t apply for private loans until they’ve exhausted other sources of funding, including federal student loans.
When parents are borrowing, on the other hand, private loans can sometimes be a better deal than Parent PLUS Loans, so be sure to do some careful comparison shopping to select the best lender.
For both parents and students who’ve exhausted other ways to pay for college, there are a variety of options for private lenders, many which offer affordable interest rates as well as borrower protections such as deferment or forbearance.
Be sure to carefully compare the interest rates, loan terms, and customer feedback on private lenders to find the right loan for your situation.
Need a student loan?Here are our top student loan lenders of 2018!
|1 Important Disclosures for CollegeAve.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
2 Important Disclosures for Discover.
3 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB) or Turnstile Capital Management, LLC (TCM), which are not affiliated entities. Certain restrictions and limitations may apply. Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. All loan products may not be available in certain jurisdictions. Other terms and conditions apply. Ascent is a federally registered trademark of TCM and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for PNC.
PNC Bank is one of the nation’s largest education loan providers. For over 40 years, PNC has been committed to helping students and their families make possible the adventure of college.
6 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2018 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
7 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
8 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
9 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|3.69% – 10.94%1||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|3.82% – 12.82%3||Undergraduate and Graduate||Visit Ascent|
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|4.72% – 9.81%7||Undergraduate and Graduate||Visit LendKey|
|3.72% – 9.68%8||Undergraduate, Graduate, and Parents||Visit CommonBond|
|4.04% – 12.01%9||Undergraduate, Graduate, and Parents||Visit Citizens|