The Young Money Club

So you’ve decided college is for you, but the idea of student loan debt scares you more than watching a Steven King movie while home alone. Well, you aren’t alone, plenty of people want to go to college but are thrown off by the enormous cost of it all.

Many 18 year olds rush into student loan debt without an understanding of the lasting effects of this commitment, and to top it all off, most don’t even know what they want to pursue in college (besides parties).

Deciding how to pay for college is almost as important as the decision to attend. It can set you up for great success or complete failure, but knowing how you’re going to cover your costs can provide you with a great deal of comfort and security. The following are 7 ways you can help fund your education while avoiding mountains of student loan debt.

Plan Ahead

Saving ahead of time is one of the best ways to pay for college. While it’s completely fine to save money in a typical saving or investment account, 529 plans offer tax advantages specifically designed for education saving.

It’s important to note that different people start saving at different times so the saving strategies you use may need to be tailored to the amount of time you have.

Another important note is that 529 plans rely on stock market returns so you may need to set aside a portion of your savings elsewhere in case of a downturn in the market before you get to put those savings to use.

There are a number of nuances and specifics that are involved with the 529 plan that you should definitely know before jumping into one, so make sure to do your own research.

For more information on 529 plans you can check here.

Scholarships

Scholarships are basically the Holy Grail of college payment options. For the majority of scholarships, they function as basically free money.

There are thousands of scholarships available for students each year, some of which go completely unclaimed. There are scholarships for basically everything you could imagine, from academic merit to the color of your eyes.

If you’re a student looking to pay for college, do yourself a favor and apply for every scholarship you’re eligible for. Don’t be afraid to ask local companies, banks, and organizations if they offer scholarships either.

A thousand dollars here and there may not seem like much against a 20-40k tuition bill but trust me, that “small” amount could add up in a bad way if it were to be replaced with student loan debt.

Scholarships.com is a great place to start your search if you don’t know where to begin.

Financial Aid/FAFSA

I would encourage everyone currently attending or planning on attending college to fill out their FAFSA every year. This is government financial aid that can help cover some of your schooling costs.

Everyone can fill out their FAFSA regardless of income or class, you may not get much but every little bit helps. They even offer bonus awards for those who file early.

You can find more detailed information and instructions here if you’re interested.

Income-Share Agreements

This is a rather new invention when it comes to paying for higher education. Rather than taking all your money upfront, some schools are opting to “invest” in their students and agree to take a percentage of their students earnings for a set number of years after they graduate.

You can check out a short list of schools that have this type of agreement here, but new ones are popping up all the time. This may not be best for everyone but depending on your degree and financial situation may be a good option.

Get a Job

This one is pretty straight forward but getting a job, part-time or otherwise, while in college can help cover some of your costs. Even if you can’t cover all your tuition with you job, it can help pay for books, housing, and other necessities you might have.

Although I would be cautious of over-working and not dedicating enough time to school work. There is no sense in working to pay for school if you’re going to have to repeat classes and pay double the amount.

Tuition Reimbursement

Depending on your goals and career choice, you may be able to work for a company that will reimburse you for your tuition costs. Companies such as Chipotle, Disney, Starbucks, and Wells Fargo, will help you pay for your education if you decide to work for them.

Many other companies also offer assistance for those pursuing higher education. Some will even send you back to school to get an advanced degree if it will benefit the company.

So if you aren’t dead set on working for your “dream” company, you may look for an employer who has something to offer you. If you’re unsure if the company you work for (or plan to work for) offers this type of program, you can always contact the HR department to find out more.

School Choice

This one kind of plays a role it paying for college but probably could’ve fit in with my How to Save Money in College post listed below. The school you choose can help you by offering scholarships but not really any other way.

Your school choice can most definitely affect how much you have to pay but not HOW you pay. It’s important when deciding on where to go to school, to take into account ALL of the costs that are involved.

People tend to look at the tuition payment and forget a lot of the other important costs that come with attending college. A community college in LA may end up costing you more than a 20k a year college in the middle of Texas. The entire cost of living is an important factor and could even outweigh any scholarship you might receive.

If you’re interested in a similar article you can check out How to Save Money in College.