How Teens Can Pay for College

Ways To Pay for Higher Education

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If you've been discussing college with your teen, then you probably already know it doesn’t come cheap. The cost of tuition, room and board, and other fees could be as high as $50,000 per year, depending on the type of school, according to data from College Board. That's like buying a brand new luxury car every year—for four years in a row. 

Luckily, there are things you and your teen can do to make college more affordable, regardless of what your financial situation looks like. Some of them you might be more familiar with—like filling out the FAFSA or applying for scholarships and grants—but there are plenty of other ideas that you might not have considered yet.

Key Takeaways

  • Depending on the type of institution, the cost of tuition, room and board, and fees for just one year of college could range from $18,000 to over $50,000. 
  • Create a written plan for how you want to pay for college. It’s a big investment and having a plan may help you and your teen feel better prepared.
  • If you can, use money from savings, scholarships, and grants to pay for college first. After that, student loans may be your teen’s best bet. 
  • Comparing the cost of every school, getting a part-time job, appealing financial aid, and more may help your teen pay for college.

The Cost of College

One of the biggest factors impacting how much you and your teen will have to pay for college is the type of institution.

According to College Board, the average cost of attendance for different types of schools for the 2020-2021 school year ranged from $18,000 to over $50,000. This included tuition, fees, room and board, and other costs like books and personal expenses.

Type of School Average Cost for 2020-2021 School Year
2-year community college $18,550
4-year public school, in-state $26,820
4-year public school, out-of-state $43,280
4-year private school $54,880

Financial Aid

It's best to try and get as much financial aid for your teen’s college education as possible when you're trying to figure out how to pay for college. That's because financial aid that’s in the form of grants and scholarships is considered free money. You generally don't have to pay it back.

When you apply for financial aid, the package you receive may list out several different types of aid, including grants, scholarships, work-study jobs, loans, aid for military families, state and federal aid, aid from your college, and more. 

Fill out the FAFSA every year. This is the key to unlocking financial aid packages for each year your child is in college. 

Grants and Scholarships

Grants and scholarships are, without a doubt, the best way to pay for college since you generally don’t have to pay them back. Websites like Fastweb are a great place to start, but make sure you leave no stone unturned while looking for scholarships. Check with different businesses and organizations, your local and state governments, and more to see if they offer scholarships or grants.

Work-Study Programs

Work-study programs are a type of financial aid that unlocks certain jobs for your teen. Work-study is generally more flexible and accommodating of school schedules. The income your teen earns from the work-study job also isn't considered in future financial aid awards. That's one big advantage because it won't decrease the amount of financial aid your teen could qualify for in the upcoming years. 

Student Loans

Student loans are often easy to resort to but try to keep them as a last-resort option. Student loan payments don’t necessarily match up with salaries earned after college, making it especially tough to pay them back when just starting out in a career. 

If you’re considering student loans for your teen, it may be better to choose federal loans instead of private loans if you can. It also helps to create an estimated post-graduation budget with your teen so they know what's actually an affordable amount to borrow and how it’ll get paid back after college is over.

"Look at how many students graduate in their field from the college your student will attend, find out how much money they earn in that major, and calculate that income against potential student loan payments," Jodi Okun, founder and president of College Financial Aid Advisors, told The Balance via email. "If the numbers just don’t fit, you might need to make some tough choices."

What You Need To Think About Aside From Financial Aid 

Financial aid can literally shave down the cost of college, but there are a lot of other indirect things you can do to pay for college, too.

Create a Written Plan To Pay for College

According to Okun, your written financial plan is essential and should start when your teen is in high school, but continue on through the college years.

A good financial plan should include a list of ways to pay for college so that you minimize or even eliminate the need to take out student loans. Create a to-do list with deadlines so that it's more concrete and binding. You may even use this as an opportunity to teach your teen how to budget and build credit, or other financial skills they’ll need after graduating.

Revise your plan every year based on how much financial aid your teen receives, what school they’re attending, if they pick up a part-time job, and other factors that could come into play over time. This will help you be prepared for the different costs of college each year.

Choose the School Wisely

Your teen probably has a list of schools they'd like to attend. It may help to cast a wide net and get financial aid estimates from each school they're accepted to. After taking financial aid packages into account, the cheapest school might not necessarily be the one with the lowest sticker price. A private college may offer a larger financial aid award than a public college, for example, so don't count out your teen’s dream school until you’ve done your due diligence.

Finding schools that have large pots of money for merit aid—a type of award based on your teen’s merit, not necessarily financial need—can be a winning strategy, according to Neeta Vallab, founder of MeritMore, who used this strategy to find the best option for her family.   

"I think a smart strategy would be to find places where there are fewer students like [your teen]," Vallab said in an email to The Balance.

For example, if your teen is particularly strong in science, technology, engineering, or math (STEM), a college known for liberal arts that wants to expand its STEM department may be interested in your teen coming to its school. It could potentially try harder to woo you over with a larger financial aid award.

Get a Part-Time Job

Many college students may choose to get a part-time job instead of doing a work-study program. That's because the pool of potential jobs is larger, and your teen may be able to earn more, too.

Just remember, the income your teen earns while in college is counted when you apply for financial aid in future years. This could impact the amount of aid they get year to year.  

Consider Financial Aid Appeals

Once your teen receives offer letters from the schools they’ve been accepted into, it's important to realize that those offers aren't written in stone. You and your teen can write an appeal letter citing the other offers to essentially “shop around” for the best financial aid package, according to Vallab. The MeritMore website offers this feature and Vallab said that several families have told the team at MeritMore that they’ve found success on this front.

The Bottom Line

You and your teen should think of paying for college as a school assignment. Put a plan in place to use savings, financial aid, scholarships, work-study programs, and student loans (if necessary). Then consider other options, and revise the plan every year, as needed.

At the end of the day, the goal is to come out on the other side of college with a minimal amount of debt so that your teen can start the next stage of their life on the right foot. Some people will have an easier time doing this than others, but no matter your situation, there will be a way to pay for college—you and your teen just have to find the right one for you.

Frequently Asked Questions (FAQs)

How do you pay for living expenses while in college?

Many people use a combination of savings, student loans, and part-time jobs to pay for living expenses while in college. You may also be able to use scholarships and grants to pay for living expenses, depending on the terms of the financial aid you receive. 

How does the military pay for college?

The military has several ways to pay for college. If you're currently going to school, you may be able to join the ROTC to receive scholarships in exchange for a commitment to join the military as an officer after graduation. If you're already in the military, you can take advantage of its Tuition Assistance program. If you're a veteran, you can use your GI Bill benefits to pay for school.

When do you pay for college?

Each college has its own schedule for when payments are due. Generally, this is around the start of each semester or term, which is often twice per year. Contact your teen’s college to learn when payments are due.