Paying for college has never been more expensive. It can quickly become overwhelming to calculate and, with the variety of schooling options—and price points—it’s difficult to plan ahead. Plus, everyone’s financial situation is different.

Attending college is no small financial decision for students and parents alike, but don’t let the initial sticker shock stamp out you or your child’s excitement over that coveted acceptance letter.

There are a myriad of scholarships, resources, funds, and financial aid options available for your child to achieve their higher education goals.

This article will discuss six ways to pay for college that are available to parents and their children.

1. Fill out the Free Application for Federal Student Aid (FAFSA)

The important first step parents and students should take is to complete the FAFSA as soon as the application opens each year in October.

The FAFSA determines your eligibility for financial assistance and puts you in the running to receive financial aid including federal grants, work-study opportunities, student loans, and even state and school-based aid.

The form can be easily submitted online and, after completing the FAFSA, you have a better idea of your options on how to pay for college—so it’s the perfect place to begin. Additionally, remember to fill out a FAFSA every year you are attending college to apply for continuing federal aid.

2. Federal Grants

Federal grants are free financial aid from the U.S. Department of Education awarded to students and families based on financial need.

Federal grants, unlike federal and private student loans, do not have to be repaid. However, students must qualify, which is why it’s important to fill out the FAFSA as soon as possible.

After completing the FAFSA, you’ll be notified of your financial aid award letter which can include a variety of grants such as:

• Pell Grants
• Federal Supplemental Educational Opportunity Grants
• Teacher Education Assistance for College and Higher Education Grants

3. Scholarships

Scholarships are certain amounts of money that can be awarded on the basis of academic or other achievement. Similar to federal grants, scholarships do not need to be paid back. Scholarships often cover a specific area of study, interest, qualification, or achievement and can be funded by a variety of different providers.

Merit-based scholarships are offered by colleges based on a student’s academic performance – like their grade point average (GPA) or standardized test scores – and determined when the school reviews your student’s college application.

On the other hand, private scholarships often come from organizations and the requirements can vary from general to very specific qualifications. We recommend searching for scholarships long before your high school senior year to familiarize yourself with what is available.

4. Work-Study and Jobs During School

The Federal Work-Study Program is another form of federal financial aid. This program, available to undergraduate, graduate, and professional students, funds part-time jobs for those with financial need in order to pay for tuition costs, fees, or other costs like room and board.

To apply for work-study, you must first submit the FAFSA. If a student qualifies, they will see “work-study” listed on their financial aid award letter. Note: just because a student is eligible for work-study does not mean they receive money automatically. Students are still responsible for finding eligible work-study jobs on campus and working enough hours to earn all the aid they qualify for.

Finding non-work study part-time jobs while in school and full-time jobs during the summer are two more additional ways to pay for college.

5. College Savings Plans

Families can plan ahead by saving for future college costs with a 529 plan. A savings account that provides several tax and financial aid advantages, a 529 plan allows families to plan ahead by saving for college tuition or additional expenses related to getting a degree.

Two advantages of 529 plan—over other savings accounts—are:

• Tax Advantages. More than two-thirds of US states provide a state income tax deduction or tax credit based on the contributions to the state’s 529 plan. Thus, any earnings accumulated are either on a tax-deferred basis or entirely tax-free when used for qualified higher education expenses.
• Financial Aid Advantages. If you or your student own a 529 plan, the plan will be reported as a parental asset on the FAFSA. This means that distributions are ignored. But don’t worry, it has minimal impact on a student’s eligibility for need-based financial aid.

6. Federal and Private Student Loans

A last resort for financing college is through federal and private student loans. This money must be paid back, will accrue interest, and often comes with some type of origination fee.

• Direct Subsidized Federal Student Loans. The federal government pays the interest accrued on the loan while your student is in school and during the first six months after graduation. These loans are need-based and awarded based on your FAFSA.
• Direct Unsubsidized Federal Student Loans. These loans require you to pay all the accrued interest and are not based on financial need.
• Private Student Loans. These loans, provided by banks, credit unions, and private lenders, are often unsubsidized and come with either a fixed- or variable-interest-rate. Each private loan has different terms so do your research and map out a repayment schedule so your student can build and maintain good credit after graduation.

An important difference between the two—federal student loans have both annual and lifetime limits, putting a cap on how much money families can borrow through federal loans alone. Private loans, on the other hand, do not have a limit on how much families can borrow.

We recommend exhausting all sources of free aid, college savings, and even college payment plan options before turning to student loans. However, loans can be an effective way to aid in financing college.

With six places to start searching for funding, there are a variety of ways for parents and students to finance college. Keep in mind, you may have to dig around with a few dedicated hours of research.

Regardless of what you choose to do in the end, your first move is clear: fill out the FAFSA every year when it opens. Then, contact the financial aid department at the school you plan to attend. Their admissions team will be able to give school-specific financing options and scholarships to aid in your debt-free graduation.