Many parents never get around to proactively saving for their child’s college tuition. In fact, even those parents who have set aside money for school often have saved less than $10,000.
That amount alone won’t pay for four years of college. According to the College Board , the average tuition, fees, room and board in 2020-2021 for a four-year private college is $54,880, $43,280 for a public four-year college (out-of-state) and $26,820 for a public four-year college (in-state).
Applying for Scholarships
Many colleges and private organizations offer merit-based scholarships. This means money is awarded based on academic or athletic ability, not financial need. The College Board maintains a database of scholarships from more than 2,200 programs, totaling nearly $6 billion of potential scholarship funding.
However, many of these opportunities have very specific requirements. For instance, you might need to live in a certain state or major in a particular subject to qualify for the scholarship, so it’s important to read the requirements carefully. If you’re unsure whether you qualify, contact the scholarship sponsor.
Start researching scholarships early, because gathering the required documents and information to apply could take time and early deadlines are common for large awards. Many scholarships require you to submit a high school transcript, your standardized test scores, a financial aid form, and information about your family’s finances, including your parent’s tax returns from the previous year.
Many scholarships also require you to write an essay and provide at least one letter of recommendation. Be sure to follow all the directions carefully and to keep copies of your application.
Applying for a Grant
Unlike scholarships, most grants are based on financial need, not academic achievement. The largest source of need-based grants is the federal government’s Pell Grant program , but there are other federal student grants available.
To qualify for a Pell Grant, you must be a U.S. citizen attending either a two- or four-year undergraduate program. If you have already earned a baccalaureate or professional degree, you won’t be eligible for a federal grant, so this link has four simple steps if you’re looking for ways to pay for graduate school.
Pell Grant amounts are based on financial need, the cost to attend your college, and your enrollment status. The amount awarded will vary based on those factors, but the current maximum award is $6,495 for the 2021-2022 school year. To apply, you will need to complete the Free Application for Federal Student Aid (FAFSA®) .
Many states also distribute grants. The National Association of Student Financial Aid Administrators maintains a database of state financial aid programs to help you pay for college.
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Asking the College for More Money
While it may seem like a bold move, one strategy for obtaining additional student aid might be asking the college to provide a larger financial aid package. Appealing a financial aid decision is a possibility, but there are no guarantees. Financial aid awards are usually based on information provided on the FAFSA, and in some cases changes in financial circumstances can lead to an amended financial aid award. Some colleges and universities might also be willing to match a more competitive financial aid offer from a comparable school.
The appeals process might vary based on the school’s policies, so check in with the financial aid office or review the school’s website to determine the exact process.
Many schools will require a letter of explanation. Depending on the circumstances, documentation might be necessary to supplement the information detailed in the appeals letter.
Getting a Part-Time Job
Another way to pay for college is to look for a part-time job, either on or off campus. Some students may have been awarded Federal Work-Study as part of their federal student financial aid package. This program is administered by individual colleges or universities, so checking with the financial aid office to see if the school participates in the program is the first step.
Campus career services offices may also have resources for students looking for part-time work and may even help with resume writing. Websites popular with college students looking for work during the academic year include QuadJobs , WayUp , Snag , and Upwork .
Applying for a Tax Credit
Qualifying students—or their parents, if the student is a dependent—may claim the American Opportunity Tax Credit (AOTC) for up to $2,500 for each eligible child attending college. To be eligible, the student must:
• be enrolled in a degree program at least half time for one academic period.
• have not finished the first four years of higher education at the beginning of the tax year.
• have not claimed the AOTC (or the former Hope credit) for more than four tax years.
• have not had a felony drug conviction at the end of the tax year.
Another tax credit, the Lifetime Learning Credit (LLC) , is also available for qualifying students, but cannot be claimed for the same student on an individual tax return. The maximum benefit of the LLC is $2,000 per tax return, and there is no limit on the number of tax years the credit can be claimed.
Requirements for either of these tax credits may change from year to year, so it’s recommended to check the most recent information before claiming the credit.
Looking at Student Loans
If you aren’t awarded a scholarship or grant, there are a variety of student loans you can apply for to help pay for college, including federal and private loans.
The Federal Direct Loan Program offers both subsidized and unsubsidized loans. Subsidized loans are awarded based on financial need. The interest accrued on a subsidized loan is covered by the Department of Education while the borrower is enrolled at least half-time, during the grace period, and during periods of deferment. Unsubsidized loans don’t have a financial need requirement, and borrowers are responsible for paying the interest on an unsubsidized loan once it’s disbursed.
If you’ve already exhausted your federal aid options, you may also want to consider a private student loan, which is not subsidized or need-based and may require a cosigner. Banks and financial institutions, private organizations, and even some colleges offer student loans with varying interest rates and loan terms.
A good place to start may be speaking with a guidance counselor and doing some research about financing college costs that works best for the student and their family. No-fee private student loans from SoFi may be an option to help students pay for school after all federal student aid options have been exhausted. The application process can be completed easily online and you can see rates and terms in just a few minutes. Flexible repayment plans allow borrowers to select the option that best suits their budget.
SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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