How to Pay for Higher Education

Are you wondering how to pay for a college education? Or, if you’ve already graduated and still owe on one or more loans, are you struggling to deal with multiple payments and interest rates? Luckily, there are numerous options for future, current, and former students who want to get their financial life under control and win the war against the high cost of a degree. Refinancing can be a great option for those who have completed their studies and feel the need to clean up the monthly budget. 

Others find that joining the military service can be a life-changing move that comes with free education in most cases. Plus, many prospective college pupils opt to scour the marketplace for scholarship opportunities. The fortunate few are able to pay tuition and related education costs through finding ways to save money over the years, college funds, or cash. Finally, the incremental method of working for one year in between academic sessions is the ideal way of paying for school without accumulating any debt along the way.

How to Pay for Higher Education


If you’re not able to fully fund your child’s education with savings, there’s always the option of taking out loans. Federal student loans are available to eligible students and their parents, and private student loans are also an option if you need additional funding.

Before taking out any loans, be sure to exhaust all other options first, such as grants, scholarships, and work-study programs. Loans should only be used as a last resort, since they will need to be paid back with interest.

Refinancing Student Loans

Borrowing is the most common way to pay for higher education. But after a few years of paying on multiple student loans, many working people develop a desire to deal with debt in a more effective way. That’s why so many adults turn to refinancing student loans with NaviRefi as a smart, simple method of repaying college debt. When you refinance, the end result is a single monthly payment that nearly always includes better rates, more advantageous terms, and more time to repay the total debt. With interest rates rising these days, it’s wise to lock in an interest rate you can live with and take your personal finances well in hand. A refi can be done online in a few minutes and has the potential to reduce your monthly cash outflow by a lot.

Work-Study Programs

Another way to help pay for college is to take advantage of work-study programs. These programs allow students to work part-time jobs to earn money to help pay for their education. Work-study jobs are usually related to the student’s field of study, so it’s a great way to get experience in the real world while also earning money for school.

Scholarships and Grants

One of the best ways to pay for college is to take advantage of scholarships and grants. These are forms of financial aid that don’t have to be repaid, so they can really help reduce the overall cost of college.

There are a variety of scholarships and grants available, so it’s important to do your research and find the ones that best suit your needs. Many organizations offer scholarships, so it’s worth checking with your employer, religious organization, or community group to see if they have any programs that you might be eligible for.

Scholarships and Military Careers

Whether you choose to apply to a military officer’s academy like West Point or enlist directly into the services, there are plenty of options for free education. The academies are free to attend as long as you can gain acceptance. Enlisted personnel can take college courses while in the service at no charge. After they’re out, they can still get significant discounts on tuition and fees. Scholarships and grants are out there; the trick is to find them. There are several excellent online companies that help candidates search through thousands of opportunities and apply for several at a time, thus reducing the time it usually takes to hunt for scholarships and fill out lengthy applications.

Employer Benefits

Some employers offer tuition assistance as a benefit to employees. This can be a great way to get help with the cost of college, especially if your employer offers reimbursement for tuition and fees.

Community College

Another option to consider is community college. Community colleges typically have lower tuition rates than four-year universities, so it can be a more affordable option for students. Additionally, many community colleges offer two-year programs that allow students to transfer to a four-year school after completing their associate’s degree.

The Incremental Method

It goes under different names, but the incremental method is a very old and quite ingenious way of paying for school expenses. The modern version of the technique includes starting a college course of study at a community-based school for two years or longer, taking the necessary freshman and sophomore classes over perhaps a three or four-year time period. The next step is to gain admission to an in-state university and take advantage of lower tuition costs. Once there, again, take courses as you can afford them, with no time limit for earning a four-year diploma. Some students prefer to alternate one year of class with a year of full-time work in order to save money as they learn.

Paying As You Go

If you can’t afford to save enough money ahead of time or would prefer not to tie up your savings in a college account, you can always pay as you go. This strategy has the advantage of giving you more control over your money, but it does require that you have the discipline to save on a regular basis.

One way to make this easier is to set up a dedicated savings account for college and automate your contributions. This way, you can make saving for college a priority without having to think about it every month. Another advantage of paying as you go is that you won’t have to worry about whether your child will actually use the money – if they don’t go to college, you can use it for something else.

Saving Over Time

Many families prefer to start saving for college early, setting aside money each month into a 529 Plan account or a similar investment. This method has the advantage of allowing the account holder to take federal and state income tax breaks on the contributions as well as letting the money grow tax-deferred. When it comes time to write tuition checks, there’s no limit on how much can be withdrawn without paying taxes or penalties. Another significant advantage is that the account owner controls how and when the funds are spent. The trade-offs are that you may not get financial aid if you have too much money in savings, and you forfeit some control over the money if your child decides not to attend college or goes to a school that doesn’t cost as much as you’d anticipated.

529 Plans

A 529 Plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are managed by financial institutions.

There are two types of 529 plans: prepaid tuition plans and college savings plans.

With a prepaid tuition plan, you purchase units or credits at participating colleges and universities, sometimes at today’s prices. When your child enrolls in college, the units or credits can be used to pay tuition and mandatory fees (room and board may also be covered if the plan offers a residence hall option).

With a college savings plan, you open an account and make after-tax contributions. The money in the account grows tax-deferred, and when it’s time for your child to go to college, you can use the money tax-free to pay for eligible expenses, which include tuition and mandatory fees, books and supplies, and room and board (if your child is attending school at least half time).

You may also be able to use 529 plan funds to pay for some graduate school expenses.

There are a few things to keep in mind before investing in a 529 plan:

  • Investment options. Each 529 plan has different investment options, so you’ll want to compare plans and choose the one that offers the investment mix that best suits your needs.
  • Age-based options. Many 529 plans offer age-based options, which automatically become more conservative as your child gets closer to college age. With an age-based option, you don’t have to worry about reallocating your investments as your child gets older – the plan will do it for you.
  • Fees and expenses. All 529 plans have fees and expenses associated with them. Some plans may also have sales charges (loads) on mutual funds. Be sure to compare the fees of different plans before investing.
  • State tax breaks. If you live in a state that offers a tax deduction or credit for contributions to its 529 plan, you may want to consider investing in that state’s plan.
  • Eligibility. There may be residency requirements or other conditions that must be met in order for you to invest in a particular 529 plan.
  • Use it or lose it. Once you’ve decided on a 529 plan, make sure you use the money for qualified education expenses, or you’ll have to pay taxes and penalties on the earnings.

In Conclusion

There are a number of ways to pay for higher education, and the best option will vary depending on your individual circumstances. Be sure to explore all of your options and make a plan that best suits your needs.

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