Financing Your College Education

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As you begin your higher education journey, you may be wondering how to finance college. Let’s face it, financing your college education is expensive. According to the College Board, the average yearly cost of just tuition and fees at a four-year college or university can range from $12,000 to $35,00.

How To Finance College

Add on books, room, board, and other expenses and you could be in the $50,000-per-year range. But before you let cost discourage you from applying to the school of your dreams, you should know that there is more than $130 billion in federal aid available to students, in the form of grants, federal loans, work-study funds, and education tax credits and deductions.

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With help from the federal government, as well as aid from state governments, private sources, and merit scholarships, it is possible to afford the college of your choice. But how? Where do you even begin? We take a close look at navigating paying college within this article.

How to Finance College

Student looking at her scholarships application form

A college degree can boost your future earning potential, but higher education can be an expensive investment.

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Tuition, mandatory fees, room and board, and other costs can add up quickly. Fortunately, there are plenty of ways to pay for college.

  • 529 College Saving Plan: Families can use this saving account to invest in their children’s future higher education expenses. Usually, savers don’t have to pay taxes on disbursements from the account if the beneficiary uses the money to pay for eligible education expenses. Like any investment account, a 529 plan can lose money depending on market fluctuations.
  • Federal Grants: The U.S. Department of Education offers free federal grants to eligible college students. The department awards these grants based on financial need and other factors, and students typically don’t need to repay them. You must apply for the Free Application for Federal Student Aid (FAFSA) annually and meet specific criteria to qualify for a federal grant.
  • Scholarships: These awards provide free financial support for higher education expenses like books, room and board, and tuition. Scholarships can be one-time payments or renewable awards. Many organizations offer scholarships for qualifying students. Colleges may award institutional scholarships to eligible applicants based on financial need, merit, and other criteria. You can also apply for scholarships from community groups, corporations, relevant professional associations, your high school, and other organizations.
  • Work-Study: The Federal Work-Study Program finances part-time on-campus and off-campus jobs for qualifying students. You can use the money you earn from your work-study job to pay for education expenses. All work-study jobs pay at least federal minimum wage, but you may make more depending on the position and your skills. Your school will pay you directly at least once a month.
  • Full- or Part-time Job: Many students work full- or part-time jobs on or off campus to earn additional money for college. You can spend your wages however you want, which can make navigating and paying college expenses easier.
  • Employee Assistance Programs: Many companies offer tuition assistance or reimbursement for full- or part-time employees who enroll in higher education. Some corporations fund employees pursuing specific degrees, while other employers will provide aid for any college major. Tuition assistance programs pay money upfront and directly to the college.
  • Student Loans: You can take out student loans from the federal government or a private lender like a bank to pay for education expenses. Unlike many other types of financial aid, student loans accrue interest and must be repaid. You may also need to pay an initial fee to receive your student loan. Typically, federal student loans have lower interest rates than private loans.
  • Payment Plan: Some higher education institutes allow you to set up a payment plan for tuition and other expenses. These plans allow parents and students to make monthly payments, evenly distributing education costs throughout the year. This option can reduce the amount of money you need to obtain from student loans or other sources.

Many students use a combination of methods to finance their college education.

Types of Financial Aids for Students

Types of Financial Aids for Students

There are two different types of financial aid for students: merit-based and need-based.

  • Merit Based Aid: Merit-based financial aid is what many people refer to as scholarships awarded to a student by either an individual college or outside organization without regard for financial need. Students typically receive merit-based scholarships for academic achievements though some can be awarded for special talents leadership skills or other personal characteristics; athletic scholarships also fall under this category.
  • Need Based Aid: Need-based financial aid is awarded to a student on the basis of financial need. The Free Application for Federal Student Aid (FAFSA) is generally used for determining federal state and institutional need-based aid eligibility. At private institutions, a supplemental application may be necessary.

It’s important to know the basics of each type so you can choose the best financial aid options for you.

Using Your Merit

Student checking on scholarship opportunities

Before you delve into the world of need-based aid find out what merit can do for you.  Merit-based scholarships usually require very high qualifications with regard to grades and test scores as well as excellent recommendations and extracurricular/community activities.

It pays to start searching for scholarship opportunities early. Colleges often list numerous merit scholarships available for incoming freshmen on their websites and in their catalogs. High-school students should start researching the scholarship qualifications at the colleges they’re interested in during their junior year.

Ask your guidance counselor for a list of local scholarships. Investigate the merit scholarships offered by your community or state as well as those from local organizations such as clubs businesses churches synagogues and other associations. Perhaps there’s a PTA scholarship for example or a town-sponsored scholarship essay contest. Then move your search to the Internet.

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There are websites that can help you locate the types of scholarships you qualify for. A word of caution: As you search, beware of scholarship scams. If a scholarship requires an application fee, for instance, don’t apply. Also, make sure the scholarship information you find online is up-to-date and apply to as many scholarships as you qualify for.

The aid process varies by state and by school so one of the best sources for any student is a college’s financial aid office. Some colleges’ academic departments offer merit scholarships. So even if you don’t qualify for a scholarship as an incoming freshman you may still be able to apply for and receive a scholarship as a college sophomore junior or senior.

When you apply for a merit scholarship make sure you’re using any separate application that may be required. Include all requested information such as essays and activities. Some applications may also ask for personal recommendations but when in doubt include them. And, of course, read and follow the directions carefully.

Loans, Grants, and Work Study

Happy students looking at their approved loans grants letter

While scholarships are awarded on the basis of merit loans grants and work-study are typically awarded on the basis of financial need. Here’s what these types of aid are all about:

  • Grants: Grants are awarded on the basis of financial need and do not require repayment.
  • Loans: Loans are financial aid awards that require repayment. They offer the opportunity to defer the cost of your educational expenses by borrowing now and repaying after you graduate. Some loan programs are based on financial needs like federal loans which offer low-interest rates.  Other loan programs are available to all students regardless of income like private loans which usually have higher interest rates. Many students use federal loans to cover tuition costs and private loans to cover other expenses like food housing and books.
  • Work-Study: Based on financial need the federal work-study program provides part-time employment to students to help with college expenses. Non-federal work-study, on the other hand, is not based on financial need. So if you don’t qualify for federal work study, you should inquire about non-federal student employment opportunities at your school.

To get started with financial aid, fill out the FAFSA as it is required by all U.S. colleges to apply and qualify for financial aid.

State governments and individual colleges also use the FAFSA to assess whether or not you need more financial help than the federal government can give. Keep in mind that colleges only have a certain amount of money in their financial-aid budgets so the earlier you apply for aid the better your chances of receiving it.

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No matter what you do it’s important to understand all aspects of each loan you choose to accept as the terms and conditions of loans vary considerably. And remember that there are always alternative options. For example, you can opt to work with the school on a combination of loans and monthly payment plans.

Will I Drown in Debt?

A student looking at her college loans document

While using loans to pay for college may be necessary it can also be a little scary. How will you possibly pay it all back?

First, it’s important to consider how much you and your family are comfortable borrowing, Look at college loans as an investment. The investment in yourself will pay off in the long run as a college education will typically help you secure a better-paying job as well as provide you with the continued potential to increase your salary.

Only borrow what you need and try to live economically while in school to minimize your student loan debt. Keep in mind that repayment usually doesn’t start until after you’ve graduated and that you can pay off your student loans over a fairly long period of time.

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No matter which financial path you find yourself on after asking “how much does college cost?” remember that paying for college, even the priciest of colleges, is doable. Start early research your options know what you’re getting yourself into and choose what’s best for you and your family.

What is a 529 College Fund?

529 College Fund

A 529 college fund is a tax-advantaged savings account used to pay for qualified education expenses. There are two types of 529 college funds:

  • Education Savings Plan: Families can use this state-sponsored investment account to save for future education costs, such as tuition and room and board. Typically, the beneficiary can use these funds at any university.
  • Prepaid Tuition Plan: A saver can purchase credits for future tuition and mandatory fees at participating institutions. This plan doesn’t cover room and board, and the beneficiary must attend specific colleges to receive all funds.

Generally, an education savings plan offers the most flexibility.

How Much Does College Cost?

College expenses can vary widely among institutions. According to the College Board, here are the average yearly costs for common types of higher education institutes:

Type of College Average Cost
Private four-year college $39,400
Public four-year out-of-state college $28,240
Public four-year in-state college $10,950
Public two-year in-district college $3,860

Generally, public two-year community college students pay significantly less than their peers who enroll at four-year institutions.

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If you want to reduce your college expenses, consider completing your prerequisite courses at a two-year college and transferring to a four-year college to finish your degree. This strategy can help you save thousands of dollars.

Other factors that can influence college costs include:

  • College endowments
  • Economic downturns
  • Housing expenses
  • Mandatory fees
  • Meal plans
  • Online vs. in-person classes
  • Region
  • The school’s reputation and size
  • Textbook prices

Many colleges with high sticker prices offer generous financial packages for students, so you shouldn’t immediately eliminate a school from your list based on the advertised cost of tuition. It can be worth applying to your preferred schools and investigating your financial aid options before deciding where to enroll.

What Is the Cost of Attendance?

College students doing their group research

Cost of Attendance (COA) is the total amount you pay to study at a college for a single semester or year. This figure can include direct charges that you pay to the school, such as tuition and fees, and indirect expenses like clothing and gas.

Examples of COA expenses include:

  • Tuition
  • Room and board if you choose to live on campus
  • Mandatory fees, like laboratory and student ID fees
  • Meal plans
  • Textbooks and supplies
  • Transportation costs, such as a parking permit or bus pass
  • Personal expenses

Financial aid options like federal grants and scholarships may reduce your overall COA.

Is Going to College Worth it?

College students discussing at school campus

Yes, going to college is worth it for many students. Many entry-level jobs require an associate’s or bachelor’s degree.

Obtaining a relevant degree can help you qualify for a position in your preferred field and make it easier for you to advance to more senior positions. College graduates may also earn a higher starting salary than peers without a degree.

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Going to college can also offer numerous personal benefits. Many college students create lasting friendships, develop professional networks, and meet romantic partners. You can also gain adaptability, confidence, independence, and many other positive traits throughout your studies.

Merit Scholarships

Three college students checking nationwide scholarships list

While most merit scholarships are offered by or through colleges themselves some scholarship sources aren’t dependent upon your attendance at a particular school. Check out these nationwide scholarships open to most college-bound students:

  • Coca-Cola Scholars Foundation: Each year the Coca-Cola Scholars Foundation awards 50 four-year $20,000 scholarships and 200 four-year $10,000 scholarships for use at accredited colleges and universities in the United States. These scholarships reward leadership and excellence as exemplified through academic achievement and extracurricular activities, including a commitment to community service.
  • Davidson Fellows Scholarship: The Davidson Fellows Scholarship disburses $50,000, $25,000, and $10,000 scholarships to extraordinary young people under the age of 18 who have completed a significant piece of work. Application categories are mathematics, science, literature, music, technology, philosophy, and “outside the box”.
  • Equitable Excellence Scholarship: The Equitable Excellence Scholarship provides 100 $5,000 annual scholarships that will be renewed each academic year for four years, for a total of $20,000 per student. And 100 $2,500 one-time scholarships will be awarded. This organization is committed to those who show potential and have the desire to pursue what’s possible while displaying strength in managing challenges.
  • Essay Contests: A number of organizations offer scholarships based on essays. For example, the Atlas Shrugged Essay Contest offers as much as $10,000 for a winning essay based on a selected topic related to the novel by Ayn Rand. The annual John F. Kennedy Profile in Courage Essay Contest offers up to $8,500 to high-school students who submit an original essay about an elected official who has demonstrated political courage. And, the International Water, Sanitation and Hygiene Foundation offers a $2,000 scholarship for students who are asked to respond to a prompt regarding safe access to clean water and sanitation systems.
  • National Merit Scholarship Program: This program was designed to recognize college-bound high school students who have maintained strong academic records. The National Merit Scholarship Program uses 11th graders’ PSAT scores to select its candidates and finalists. Each year, the program awards, on average, 7,500 high school juniors with a $2,500-scholarship.

While the above is just a sampling of the various national scholarships available, it can help you get started in the right direction. It’s a good idea to apply to any and all scholarship programs you qualify for.

Best Colleges with Merit Scholarships

Methodology: The following school list is in alphabetical order. To be included, a college or university must be regionally accredited, offer degree programs online or in a hybrid format with merit scholarships.

Andrews University

Andrews University

Andrews University offers several merit-based scholarships. The school’s partnership scholarship is awarded based on students’ SAT or ACT scores or GPAs but is only eligible for on-campus students.

Other scholarships offered include a National Merit scholarship covering full tuition, a Music Performance scholarship, and Student Missionary scholarship. The school’s fully online degree programs include studies in religion and business administration and an RN-to-BSN.

Andrews University is accredited by the Higher Learning Commission.

Bellarmine University

Bellarmine University

Bellarmine University offers several merit-based scholarships. Some, like the Scarlet or the Kentucky Governor scholarships, may be automatically awarded based on GPA and SAT or ACT scores.

Other scholarships are offered in the fields of music and athletics. Bellarmine offers an online degree completion program with 7 week courses. Fields of study offered include communication, organizational leadership, and information technology.

Bellarmine University is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

Clarkson University

Clarkson University

Clarkson University automatically considers applicants for merit-based scholarships. Guidance counselors can nominate students for Leadership and Achievement awards. Students pursuing STEM degrees may be eligible for incentives.

Clarkson currently offers no undergraduate degree programs online, but many of their undergraduate programs feature online courses. The school does offer two graduate degrees in business administration and science that can be earned online.

Clarkson University is accredited by the Middle States Commission on Higher Education.

Fairfield University

Fairfield University

Fairfield University considers all prospective students for merit scholarships based on their applications. Factors include grades, test scores, and extracurriculars.

Students in the arts and sciences may be able to get a scholarship for an unpaid internship. Fairfield currently offers online graduate degree programs and some accelerated on-campus bachelor’s degree programs. Areas of study offered include interior design and educational technology.

Fairfield University is accredited by the New England Commission of Higher Education.

Gonzaga University

Gonzaga University

Gonzaga awards merit scholarships to 98% of its incoming students. Awards are based on GPA, recommendations, test scores, and extracurriculars.

Students may receive other scholarships for academic excellence, service, and leadership. Gonzaga currently offers fully online graduate degree programs and undergraduate courses. Areas of study offered include nursing, communication and leadership, and sports and athletic administration.

Gonzaga University is accredited by the Northwest Commission on Colleges and Universities.

Lawrence University

Lawrence University

Lawrence University assesses all student applications for merit scholarships. Students may be awarded up to half of their tuition. Lawrence considers many factors including GPA, class rank, high school attended, written essays, and test scores. LU offers accelerated programs to help students earn bachelor’s and master’s degrees quickly. Areas of study offered include law and forestry.

Lawrence University is accredited by the Middle States Commission on Higher Education.

Samford University

Samford University

Samford University awards several merit scholarships for students who demonstrate academic excellence or are committed to helping their communities. Scholarships offered include the Crosland, Davis, and Marion scholarships.

Most of the scholarships offered require students to maintain academic standards. Samford University offers online undergraduate degree programs. Some of these programs are fully online, while some are blended. Programs are offered in organizational leadership, liberal studies, and more.

Samford University is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

Seattle Pacific University

Seattle Pacific University

Seattle Pacific University offers several merit scholarships. SPU considers factors like GPA, test scores, and faith-based activities. Students may also be invited to apply for a Distinguished Scholar Award, which pays full tuition. SPU offers online courses to make it possible for working students to earn a degree. Areas of study offered include accounting and apparel design.

SPU is accredited by the Northwest Commission on Colleges and Universities.

Southern Methodist University

Southern Methodist University

Southern Methodist University offers several merit scholarships that may be earned by high-performing students, including the President’s Scholars Program, which pays full tuition. Other scholarships are awarded based on leadership skills, National Merit status, and IB scores.

SMU currently offers online undergraduate courses and fully online graduate degree programs. Fields of study offered include network engineering and advertising.

Southern Methodist University is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

St. Catherine University

St Catherine University

St. Catherine University offers several merit-based scholarships. The Sisters of St. Joseph of Carondelet Founders Scholarship is the highest and pays full tuition and fees. Awards are based on academic excellence, extracurriculars, and exceptional musical or artistic skills. St. Catherine University offers several fully online undergraduate degree programs. Areas of study offered include marketing and healthcare management.

St. Catherine University is accredited by the Higher Learning Commission.

Stetson University

Stetson University

Stetson University awards three merit-based scholarships: Presidential, Dean’s, and Transfer Dean’s. Students are automatically considered for these scholarships with their applications. Students may also receive scholarships based on their majors.

Stetson currently offers online undergraduate courses and fully online graduate degree programs. Areas of study offered include chemistry, digital arts, accounting, and law. Courses are offered in full-term and half-term lengths.

Stetson University is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

The New School

The New School

When students apply to The New School, the admissions department automatically considers them for merit-based scholarships. They consider factors like GPA, extracurriculars, and test scores. Auditions and portfolios may also be considered. The New School offers six fully online bachelor’s and master’s degree programs along with many online courses. Areas of study offered include fashion management and media studies.

The New School is accredited by the Middle States Commission on Higher Education.

Truman State University

Truman State University

Truman State University’s Truman’s Merit Scholarship is an automatic scholarship for students who apply with at least a 2.5 GPA and a 27 ACT score or 1260 SAT score. Students should also submit their extracurriculars and an essay to be considered for other scholarships. Truman offers online undergraduate credits and online graduate degree programs in fields like counseling and accountancy.

Truman State University is accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools.

University of Denver

University of Denver

First-year and transfer applicants to the University of Denver are automatically considered for merit scholarships based on their GPA and test scores.

Students who earn these scholarships receive a fixed amount for 12 quarters. Music students may qualify for additional scholarships. DU offers online asynchronous and synchronous undergraduate degree programs. Areas of study offered include global studies, healthcare administration, and information technology.

The University of Denver is accredited by the Higher Learning Commission.

University of Richmond

University of Richmond

The University of Richmond offers two primary merit-based scholarships: Richmond Scholars and Presidential Scholars. These pay between a third and the total cost of tuition. UR also offers smaller merit-based scholarships. All are based on GPA, test scores, extracurriculars, and major. UR offers a fully online program for a Bachelor’s in Interdisciplinary Studies. Students in this program take two courses per semester.

The University of Richmond is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

University of South Carolina

University of South Carolina

The University of South Carolina awards merit scholarships to both residents and non-residents of South Carolina. USC considers GPA, extracurriculars, recommendations, and more for its scholarships. The exact criteria change each year because it’s based on the incoming class. USC offers fully online undergraduate degree programs in fields like integrated information technology.

The University of South Carolina is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

Utah Tech University

Utah Tech University

Utah Tech University offers merit scholarships for new and first-time transfer students who are residents or non-residents of Utah. Those who’ve applied previously can apply for a Second Chance scholarship. UT considers GPA as one of the main factors for awarding scholarships. UT Online offers ten bachelor’s degrees in fields like management and design.

Utah Tech University is accredited by the Northwest Commission on Colleges and Universities.

Washington and Lee University

Washington and Lee University

Students attending Washington and Lee University need to complete the Johnson Scholarship application to be considered for all merit scholarships.

Washington and Lee consider applicants’ grades, leadership skills, and potential contributions to the university. The school doesn’t currently offer fully online undergraduate programs, but students may take many courses online. Fields of study offered include biochemistry and economics.

Washington and Lee University is accredited by the Southern Association of Colleges and Schools Commission on Colleges.

Webb Institute

Webb Institute

All students accepted to Webb Institute receive a full tuition scholarship. The school also offers merit-based scholarships to help students pay for other necessities, like room and board. Scholarships are often based on student aptitude. Webb is an engineering school that offers one degree, a BS in Naval Architecture and Marine Engineering.

Webb Institute is accredited by the Middle States Commission on Higher Education.

Widener University

Widener University Wilmington

All incoming freshmen and transfer students to Widener University are automatically considered for merit scholarships. Merit scholarships last for eight semesters provided students maintain their grades and pace.

Factors for consideration include GPA, test scores, and extracurriculars. Widener offers fully online undergraduate degree programs. Fields of study offered include urban studies, allied health, RN-to-BSN, and liberal studies.

Widener University is accredited by the Middle States Association of Colleges and Schools.

Getting Your College Degree Online

College student taking her degree online

Attending college can set you up for professional success and help you develop into a self-sufficient adult. If you’re worried about how to afford college, many financial aid options can make paying for tuition and other expenses easier.

You may qualify for multiple forms of assistance, reducing the upfront costs of your college degree. Pursuing an online degree can also decrease your cost of attendance. You can save money on tuition, room and board, transportation, and other expenses.

You can start your educational journey today by researching accredited colleges and financial assistance programs.

Ready to start your journey?
Brianna Anderson
WRITTEN BY Brianna Anderson

Brianna has a Ph.D. in English from the University of Florida and an M.A. in English from the University of Kentucky. Her research interests include careers and professional development, digital pedagogy, and first-year writing.