With the cost of tuition steadily rising, it can be difficult to pay for college. Working while in college, though an effective method for financing your education, may not be an option for everyone. You might not be able to find a job easily, depending on the economic climate. Even if you do, you might not have the time to hold a job and study at the same time. Moreover, if you plan to attend graduate school afterward, you will likely need to maintain your grades so you can qualify for admission, and working may distract you from that goal.
If you want to go to college full-time but not have to work to pay for it, there are options besides taking out a student loan. Carefully consider all the alternatives to paying for school without working to determine the right course of action for your educational and financial goals.
Undergraduate students at public institutions paid an average of $25,487 in tuition, fees, and room and board at public institutions for the 2019–2020 academic year. That's up from $20,035 in 2010-2011.
A scholarship is a financial gift from an organization or individual. You don't have to repay a scholarship as you would with a loan, which makes it one of the best ways to pay to go to school full-time and not have to work. Depending on the scholarship, you might receive a gift amounting to anywhere from a few hundred dollars to the entire cost of your tuition. If the requirements aren't too cumbersome, it's generally worth applying, since a scholarship is free money that reduces the cost of your education and might even prevent the need to take out a loan.
Organizations that offer scholarships include:
- Universities: Schools offer merit-based scholarships based on a student's academic achievements, talents, traits, and interests. They also offer need-based scholarships based on a family's ability to pay for school. For example, you might get a merit-based scholarship from your school if you have an above-average grade point average. Contact the financial aid office of your intended university to determine whether it offers any scholarships, what types of scholarships it offers, and how to qualify and apply for them.
- Professional or social organizations: These include associations related to your field of interest, civic groups, and religious organizations. Many of these scholarships grant gifts for attributes other than grades; you might qualify because of your background or interests (if you come from a military family or are a female student studying engineering, for example). Look for these scholarships online or through resources at your library.
- Employers: Public and private companies also offer scholarships based on your academic profile or non-academic contributions, including an essay, community service, or a willingness to work for the firm after you graduate. Find these scholarships online and reach out to the company directly.
These are grants that the federal government typically awards to students who have financial need, are enrolled in a domestic undergraduate program, and don't already have a bachelor's, graduate, or professional degree. They're a great option to pay to attend school full-time and not have to work because you don't have to repay them unless you withdraw from college early, switch to a non-grant-eligible enrollment status (e.g., from full-time to part-time enrollment), or also qualify for an outside grant or scholarship that reduces your financial need.
You might also qualify for a Pell Grant if you're enrolled in a postbaccalaureate teaching certification program.
But keep in mind: Pell Grants count as need-based aid. You can't receive more federal need-based aid than your financial need, which amounts to the cost of attendance minus your expected family contribution (EFC) as determined by a formula established under federal law.
The EFC will be phased out and replaced by the Student Aid Index (SAI) effective with the 2023–24 award year. Starting in October 2022, Free Application for Federal Student Aid (FAFSA) applications will use this new formula to determine eligibility. The SAI uses a slightly different calculation method from the EFC, but is essentially a name change to reflect a student's award, not how much a family is willing to contribute to their child's education.
Unfortunately, if you are considered a dependent on your parents' taxes, for now, your EFC is based on your parents’ income. This may limit your eligibility even if your parents cannot comfortably fund your education. If you do qualify, your aid is limited to the maximum grant amount for that year.
The application for a Pell Grant is the same as that for a federal student loan; you will need to fill out a FAFSA form and then submit a new one each year to remain eligible for Pell Grants.
You can receive a maximum of $6,345 in Pell Grants for the 2020–2021 award year extending from July 1, 2020, to June 30, 2021. For the 2021-22 award year, the maximum amount is $6,495.
A research grant is similar to a teaching assistantship, but it may offer more flexibility and may not require a set number of hours of work each week. Many universities provide these grants to fund ongoing research and give students in majors aligning with that research the ability to pay for their college education and not have to work in a traditional job. Grant amounts vary by school but may range from a few hundred to a few thousand dollars per project or academic semester.
Usually, grants are offered to juniors, seniors, or graduate students. Since they often support a larger project of a faculty member at the college, you may need to be recommended in order to apply. Speak to your professor or faculty advisor to learn more about what you can do to qualify and apply for a research grant.
If you're open to the idea of working, but not during the school year, consider getting a job with an employer in your hometown or college town during your summer or winter breaks.
Granted, if your aim is to save enough to cover your educational expenses, you might have to work two full-time jobs over the summer to save enough for the academic year. This means you should choose jobs that pay decent wages. Waiting tables is a good way to bring in money, but you can also tutor or do other jobs that offer more than the minimum wage.
As a last resort, consider using student loans to help cover your college costs without a job. Unlike the other options for attending school full-time without getting a job, a loan must be repaid (both the principal and the interest) and can potentially leave you with debt long after you graduate. If possible, limit your student loans to federal student loans, which offer attractive terms including income-based payments or student loan forgiveness programs once you graduate.
It can be difficult to graduate without a job lined up and maintain a large monthly student loan payment, so understand the financial responsibility you are undertaking when you get a student loan. Pay attention during financial aid counseling, which you are required to take when you obtain the loan. Likewise, review the Master Promissory Note outlining the terms of the loan. Carefully managing your money can help you avoid making financial mistakes in college that can follow you into adulthood.
Whether you qualify for a scholarship, grant, summer job, or loan without working, the aid might not be enough to cover all of your expenses as a student. However, you may qualify for tax breaks like the American opportunity tax credit (AOTC), which can reduce your tax bill by up to $2,500 based on your educational expenses. Claiming such a credit can help you recoup some of the costs of school, and you can put the savings toward the expenses that financial aid didn't cover.
The AOTC is specifically for undergraduate college students and their parents. You can claim the credit on your taxes for a maximum of four years. Your parents will claim the credit if they paid for your education expenses and you're listed as a dependent on their return.
There's also the lifetime learning credit. This credit allows parents and students to lower their tax liability (up to $2,000) to help offset higher education expenses. The amount of the credit is 20% of the first $10,000 of qualified education expenses, or a maximum of $2,000 per tax return.
Student loans forgiven between January 1, 2021, and December 31, 2025, are now tax-free, too, thanks to the American Rescue Plan Act of 2021.
Some educational deductions and credits cannot be claimed together, and there are specific rules about which expenses and income levels qualify. Talk to an accountant to determine the best way to take advantage of educational tax breaks.