How to Fund a College Education

There are more ways than one to pay for college

Reviewed by Pamela Rodriguez
Fact checked by Suzanne Kvilhaug

Funding a college education today is no easy feat. Adjusted for inflation, the average annual cost of tuition at a public four-year college is 40 times higher than it was in 1963. From 2010 to 2023 alone, tuition at public four-year colleges rose by 36.7%, reflecting a steep and persistent increase.

To manage rising costs, there has been a surge in student loans. Pew Research Center indicated that 1 in 4 U.S. adults under the age of 40 hold some amount of student loan debt.

However, there are ways to fund your education other than student loans. This guide will outline several strategies for paying for college.

Key Takeaways

• With rising college costs, it’s important to create a comprehensive funding strategy.
• Evaluate your school options, seek out scholarships, and explore employment-based tuition benefits.
• Consider working part-time or attending college part-time to spread out tuition expenses.
• Avoid relying solely on student loans when other funding sources may be available.

Consider methods other than student loans to fund your higher education. 

Average Costs of College

According to the College Board, the sticker price of undergraduate tuition and fees, excluding room and board, at an in-state four-year public college increased by 2.7% year-over-year (before adjusting for inflation) for the 2024-2025 academic year.

Undergraduate tuition and fees at a private nonprofit four-year college increased 3.9% to $43,350 during the same period.

While the cost of getting a higher education is staggering, creating a strategy to comfortably afford your college education can get you to the finish line.

How to Pay for College

Here are some smart ways to budget for and afford rising higher education costs

1. Carefully Choose Your School

Generally, in-state public schools cost significantly less compared with out-of-state public schools or private schools. If you’re dissatisfied with the quality of the public schools in your home state, you may want to consider moving to a different state with better schools and establishing residency there.

Establishing residency in a new state requires meeting strict requirements that vary by state and sometimes by school. However, it may be worth jumping through hoops for the education savings. Most states require the student to have at least one parent who is a resident for at least one full year before they enroll in college, in addition to other criteria.

For example, California has particularly stringent requirements when it comes to qualifying for in-state tuition. Here are some examples:

• You must be continuously physically present for 366 days or more immediately prior to the requesting residence status.
• You must have an intent to make California your permanent residence and have proof, such as a California driver’s license or documentation of property ownership.
• You must be financially independent if you’re an unmarried undergraduate student under the age of 24 and your parent(s) do not live in the state.  

2. Research Scholarships and Grants

If you have a particular skill, certain schools may see you as an asset. Do some research about which schools may provide a scholarship and the criteria you’ll have to meet to be awarded one. Additionally, find out about federal grants, such as the Pell Grant, which is awarded to students who demonstrate financial need. 

Another method is to find work in a field that pays you to go to college. For example, some companies provide partial or full tuition reimbursement. The military also provides tuition benefits, and some of them are available to spouses and dependents of service members, too.

A third method is to find out about an income-share agreement (ISA). These are plans that lend you money now in exchange for a share of your future income for a determined payment term later on. Generally, the income-share rate can range from 2% to 10% of your future salary, but the total repayment amount is capped.

3. Factor in the Cost of Living

It’s important to keep the cost of living in mind, which varies by location. For example, if you live off-campus, your living expenses will probably be significantly lower than if you live on campus. Or, if you go to college in a big city, you can expect the cost of housing to be higher than if you attend school in a suburban or rural area.

Consider the area you think you want to live in post-graduation and the cost of living in that area. If possible, choosing a place with an affordable cost of living and where your school is recognizable can make it easier to live and potentially help with future job prospects.

4. Find an Impactful Job While In School

If you’re able to work during the academic year or find a summer job between semesters, you can start earning before you enter the full-time workforce post-graduation.

Temp agencies are a good place to start since they do most of the job search for you, and jobs tend to pay higher than minimum wage. Also, getting real-world work experience before graduation can foster professional connections that could help you land a meaningful internship or your first salaried role relevant to your chosen field.

If you aren’t able to land a higher-paying job, consider one that will at least help subsidize your living expenses. For example, if you work in food service, you might get free food during working hours or food to take home at the end of the day. Alternatively, if you can get a job working at your school’s office of residential life, you could potentially get a discount on student housing.

5. Maintain a Flexible Schedule

Some programs may be more intensive than others. For example, pursuing a degree in medicine may be more demanding of your time and make it more challenging to work while in school. You may want to consider attending school part-time for several reasons.

Attending school part-time can help spread out tuition and housing costs while also freeing up time to work simultaneously. However, there are some factors to consider before switching to a part-time academic schedule. Part-time students may not be able to live on campus, making it more difficult to socialize. Additionally, if your student loans require you to be in school at least half-time, be sure you maintain this requirement so you don’t have to repay your loans earlier than planned.

Two other options are to spend a year or two working full-time after you graduate from high school to save up some money, or go to school at night or on the weekend while working. These strategies may mean it takes more than four years to complete your degree, but they will make it easier to budget and gain work experience at the same time.

6. Find Out if You Qualify as an Independent Student

Not all parents may be able to contribute to their child’s higher education costs. If you’re older and meet certain requirements, you may qualify as an independent student under the Higher Education Act (HEA). This act carries a different definition of “dependent” that differs from the guidelines set forth by the Internal Revenue Service (IRS).

Here are the requirements to qualify as an independent student under the HEA:

• Age 24 or older by Dec. 31 of the award year
• Orphan or ward of the court
• Armed forces veteran or serving actively
• Graduate or professional student
• Married
• Dependents other than a spouse
• A student for whom a financial aid administrator makes a documented determination of independence because of other unusual circumstances

The Bottom Line

College is expensive, but it doesn’t have to be financially overwhelming. By researching funding sources, planning ahead, and working strategically, you can make higher education more affordable.

Start by understanding your full cost of attendance and what options are available to you, including grants, scholarships, in-state tuition, and employment benefits. Making informed decisions today can lead to a more secure financial future post-graduation.