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How to Pay for College

Figuring out how to pay for college can be difficult and confusing. Many worry about paying too much, getting caught in a loophole or borrowing a large amount of student loan debt — making the college financing process stressful.

When you complete your college search, start by applying for scholarships and grants, and continuing to build your college savings. Apply for federal, state and college financial aid by completing the Free Application for Federal Student Aid (FAFSA). If your financial aid package falls short, consider private student loans to cover the remaining cost of college attendance. We have broken down these three options below.

Step 1: Scholarships and Grants

Apply for as many scholarships and grants as possible! The money you receive will go directly towards the cost of college, and you do not have to pay it back. This reduces the amount you must borrow in student loans and pay out of pocket.

There are many places to look for scholarships. You can visit your guidance counselor’s office to find local scholarships or sign up with a free scholarship matching service, such as, to match your profile with national and regional scholarships and grants. There are scholarships for nearly everyone, not just academic overachievers. There are “weird scholarships” for student adept in candy technology, duck-calling or for just being tall (over 5'10"). Check out these weird scholarship requirements -- you may be surprised at what you find!

You do not have to be a writer, a star athlete, or over 5'10" — although these are great opportunities — to obtain scholarship money. There are programs you can join, such as, that only require participation to be eligible. is a free online rewards program that has given away over $750,000 to current and future college students. You can win these monthly scholarships before and throughout college to supplement costs. Learn more about how to win scholarships on

Step 2: Federal, State and College Financial Aid

The next step in paying for college is applying for financial aid by completing the FAFSA as soon as possible on or after October 1 to secure your eligibility for programs with early deadlines. If eligible, you will receive an award letter offering various forms of aid, such as:

  • Federal, state and college grants and scholarships
  • Federal or campus work study
  • Subsidized federal student loans
  • Unsubsidized federal student loans
  • Federal Parent PLUS Loans

Federal student loans offer the best benefits and the lowest interest rates. If you need to take out loans to finance your education, always borrow federal first.

The Federal Stafford loan is the first federal student loan that you should consider. Undergraduate students can borrow at a fixed 3.76% interest rate and graduate and professional school students can borrow at a fixed 5.31% interest rate. Federal Stafford loans require no payments until six months after you graduate or drop below half-time enrollment status. In order to receive this loan, you must file the FAFSA each year.

Another federal loan option for undergraduates is the Federal Parent PLUS loan. This loan is taken out in the parent’s name, and has many great benefits. It allows parents to borrow the entire cost of attendance (minus other financial aid) at a fixed 6.31% interest rate. (This rate is for 2016-2017) (July 1, 2016, through June 30, 2017, i.e., Academic Year 2016-2017)

Step 3: Private Student Loans

If scholarships and federal, state and college financial aid fall short of providing the funds you need, the next step is a private student loan. Private student loans are offered by banks, credit unions, states, colleges and other financial institutions. Although you do not need to complete the FAFSA, you will probably need a credit-worthy cosigner in order for the private loan to be approved.

Lenders offer private student loans for certain schools, and the provisions of each loan vary. You can find lenders on To better inform yourself about the amount you will have to repay after school, check out the student loan calculator. This calculates monthly loan payments for a given loan amount and interest rate.

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How to Apply to College

Find out how to complete your college applications, and learn the three steps to take when applying to colleges for the best chances at getting into the right college for you.

How to Pay for College

Learn how to choose the right resources for paying for college, so you can get the best education with the least amount of debt after graduation.

SAT and Test Prep Resources

A competitive score on a standardized test could help you get in to your top school. Check out these resources to help you tackle the SAT, ACT and other required tests.