How to Pay for College 101: Which Resources You Qualify for and how to Evaluate Them

Jon O'Donnell Updated on October 27, 2020

Figuring out how to pay for college can feel overwhelming. It costs a ton, there are a lot of options, and the best process for putting together funding isn’t always crystal clear.

Take a deep breath — we’ve got your back.

Below is a breakdown of the different funding options you have and what you need to know to make the most effective use of them.

#1 way to pay for college: federal and state grants

Raise your hand if you like free, no-strings-attached money. Yeah, us too.

So, start with the Federal Application for Student Aid, otherwise known as FAFSA.

The FAFSA automatically evaluates you for several types of financial aid, including federal grants and some state grants. Even if you think you won’t qualify for aid, it's vital to fill out the FAFSA. Lots of non-need based aid, including many college-based grants, are also distributed via information collected via your FAFSA. (We discuss these other types below.) You don't want to miss your chance because you didn’t file a single form.

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When you get your acceptance letters from colleges, you’ll also find out what state and federal aid they’ve determined you’re eligible for. (Learn more about how to read your financial award letters.) These can include Pell Grants, and Federal Supplemental Educational Opportunity Grant (FSEOG), as well as more specialized grants. Many states also award grants. You can check out what your state offers here.

Federal and state grants are just that: Money granted to you to pay for college. You don’t have to pay them back, so they’re a pretty sweet deal. 

Next best source of college money: scholarships

Scholarships are a fantastic way to get more money to pay for college. And there is a scholarship for everyone. They can be awarded based on need, academic merit, or a variety of other criteria including military service, athletic or artistic achievement, community service, ethnicity/nationality, or program of study.

Don’t assume you must have a 4.0 average to qualify – scholarships that aren’t as well known or have very narrow criteria usually have lower academic thresholds for consideration because they get fewer applicants.

Filing the FAFSA automatically evaluates you for some scholarships, especially those offered by your college, but you should look on your own for others. Community groups, local businesses (including your parents’ employers) and other organizations often have independent scholarships up for grabs.

Start researching early and check again every few months to see if there are any new (or newly promoted) scholarships that you might qualify for. You can check with your guidance counselor to start, and we’ve got a list of 500+ good options to start with here. Just make sure you’re tracking the deadlines and requirements for each application. They don’t necessarily follow the school/college application calendar.

Work for the money: part-time jobs and work-study

Many financial aid packages include a work-study option. This is federal aid that provides a part-time, on-campus job while you're in school – you can indicate interest in it on your FAFSA. Note: qualifying for work-study doesn’t guarantee you a job but you’ll likely have first dibs on those that exist. The great thing about work-study is it has few requirements other than showing up for work. And it can be a good way to make new connections within your college. The downside is that your hours may be limited based on your work-study award. Learn more about work-study positions here.

If you don’t get a work-study position or it won’t provide as much cash for college as you hoped, consider an off-campus part-time job. Some students (and their parents) often worry juggling a job and school is too much, but research shows working during college can actually boost your GPA as long as you put reasonable limits on your hours.

Federal student loans

Your FAFSA application also evaluates your eligibility for federal student loans. If the money you cobble together from grants, scholarships and jobs isn’t enough to cover all your college costs, federal loans are generally your first choice. They have lower interest rates than private loans and are typically more borrower-friendly, with features such as income-based repayment plans.

Federal loans come in two kinds: subsidized and unsubsidized. In a subsidized loan, the federal government covers the loan interest while you're in school. That can save you thousands! Subsidized loans are issued based on financial need. If you qualify for subsidized federal loans, always max these out before you consider unsubsidized loans.

The government also offers unsubsidized student loans. These are not based on financial need and the government doesn’t offer repayment help. But unsubsidized federal loans are still a great choice because of their lower interest rates and fees compared to private lenders.

However, both kinds of federal loans are subject to dollar limits, so you may need to find other ways to fully fund your college education.

Ask for more

If, even with aid, you still have a substantial gap between your expected college costs and what you can pay it may be time to send a financial aid appeal letter.

You can do this if there have been significant changes in your finances since you filled out your FAFSA —for example, job loss, serious medical illness, etc., or if you’ve lost some aid due to changing circumstances.

A successful appeal letter needs to be professional and respectful and carefully explain why you need more money – not just that you need it. (Everyone wants more money for college. You need to show why you deserve it.) We’ve got a sample letter you can look at for tips and customize to fit your situation. 

Paying with private loans

After you've exhausted all the options above, a private student loan may be the best way to bridge the gap between what you can afford to pay now and what college costs. Just make sure you know what you're signing up for.

Private loans are a great tool for helping to pay for college, but they come with interest and fees you may be paying for a long time.

To ensure you’re making a smart decision about what you can afford, use our free NitroScore tool. The NitroScore tool helps you determine the affordability of different college funding scenarios based on your projected salary after graduation. If your costs look high relative to what you’ll be making once you graduate, you may want to think about making some bigger changes.

If the NitroScore results look good and you’re still looking for additional funds for college, check out private loan offerings from some of our trusted and highly vetted loan partners. Funding your college education can be a many-step process. Get started today.

Published in: How to Pay for College

About the Author
Jon O'Donnell

Jon is a writer and marketer for Nitro who is passionate about bringing transparency to the student loan process along with providing families with the information needed to make smart financial decisions. He also just recently refinanced his student loans allowing him to pay them off 5 years faster all while saving an additional $152/month. As he continues to pay them off himself, he strives to help others do the same. Jon also has a long history of connecting people with educational opportunities to help them improve their careers and their overall personal finances. In his free time you can find him reading travel blogs and researching destinations around the world in search of his next adventure. Read more by Jon O'Donnell

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