Not too long ago, paying for college used to be something students could manage on their own with a part-time job.
These days, however, attending a college or university often means taking out loans just to get through one or two semesters. Don’t forget room and board, textbooks and school supplies, school and activity fees, and personal expenses.
Despite all these rising costs, many students take out loans without fully understanding the gravity of being tied down by student debt. But it doesn’t have to be that way. Here are three ways students and families can pay for college without taking out a loan:
1. Invest in a Savings Plan
By contributing to an investment account, not only are you making your dollars work for you but you’re also saving money on taxes. For example, the 529 plan is a popular tax-advantaged investment account specifically designed to fund students’ post-secondary education. Best of all, earnings in these plans are not treated as taxable income.
As with any low-risk investing strategy, the earlier you start contributing, the better. Even just a few extra years can make a big difference in the end result. Thus, opening a 529 plan account when the future college-bound recipient is young is a great way to make paying for their two- or four-year degree more manageable.
2. Apply for Grants and Scholarships
If students aren’t applying for grants and scholarships, they’re leaving free money on the table. The first step to applying for this type of aid is by completing a FAFSA application, although some organizations don’t require it. Scholarships are a particularly great way to fund education, as many are given out on the basis of interests, community and club membership, volunteer work and civic involvement, or other special circumstances.
Whether you’re a water skier, golf caddy, or merely a student willing to write an essay on safe driving, there are thousands of niche and need-based scholarships out there. Often, students must write essays to earn a scholarship. However, the return on investment for the time and energy it takes to apply is well worth it.
Furthermore, applying for more than one scholarship and using tools like the U.S. Department of Labor’s Scholarships Search Tool can help make the process simple and improve your chances of receiving free money for school.
3. Earn a Work-Study Job
Work-study programs are federally-funded jobs made available to students who fill out a FAFSA and qualify for work-study aid. Students often have to find their own jobs, but most schools offer work-study positions. While students are only guaranteed minimum wage, work-study is a great opportunity to help pay for college.
Gaining professional experience related to your studies is what sets soon-to-be graduates apart from the masses and gives them an edge in the job market. Work-study programs are a two-for-one deal for students. They not only help pay for their degree but also prepare them to enter the workforce quickly and in their chosen field upon graduation.
Paying for College is More Than Possible
Graduating debt-free is realistic for a majority of college students. Between long-term saving strategies and taking advantage of different forms of financial aid, there are ways to graduate free and clear of loan payments. Of course, choosing an affordable, in-state college will make things easier for students and their families. But no matter how or where a student chooses to obtain their degree, there are ways to significantly decrease, if not erase altogether, the need to rely on debt to get there.
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