7 Smart Ways to Pay for College Expenses

Ways to Pay for College

BIG Ideas:

  • Families use savings and income to pay for college.
  • A college 529 savings plan offers a tax-advantaged way to pay for college.
  • Many schools offer tuition payment plans that allow you to make monthly payments for college.
  • Federal and Private loans are designed to help you pay college expenses not covered by Financial Aid or savings.

Make college decision. Check.

Sign the acceptance letter. Check.

Purchase a school decal for the back of the family car. Check.

You’re on a roll!  You conquered all those steps in the college admissions process and more! You completed long applications, proofed and reproofed all the essays, and gathered up all those required financial docs.

Now, there’s only one last assignment to complete: you have to figure out how to pay for college.


Sure, it’s probably your most challenging assignment yet, but help is available. Here are 7 ways to pay for college:

  1. Savings. If you have savings specifically set aside for college, now is the perfect time to start tapping it. You may, for example, have a 529 college savings plan, the tax-advantaged savings account designed to help families save over time for college expenses. The money you have in a 529 plan grows tax-deferred and any withdrawals you make for qualified education expenses – tuition, room and board, fees, books, supplies – are tax-free provided they do not exceed the cost of attendance at an eligible school. There’s another advantage of your 529 plan: The money you use has a minimal impact on your child’s ability to qualify for Financial Aid. Different states offer different 529 plans that may have other benefits. In Texas, you can take advantage of the Texas College Savings Plan® (TCSP) and the LoneStar 529 Plan® (LS529). Texas also offers a prepaid 529 Plan, known as the Texas Promise Tuition Fund (TPTF), whereby you can lock in tuition fees for future college expenses. If you don’t currently have a 529 savings plan, it’s never too late. Money can add up quickly. Do you have other savings? You may consider using those funds for college but remember not to jeopardize your financial well-being to pay for college. For example, you don’t want to use funds you have saved in your emergency savings account or deplete your retirement savings.
  2. Tuition payment plans. To help make college costs more manageable for families, many schools offer 10- or 12-month payment plans. In Texas, for example, students may enroll in payment plans like those offered by the University of Houston or Texas A&M. In addition, with the Texas Tuition Promise Fund, you can also make installment payments for future tuition. To determine if your school offers payment plans, talk to the Financial Aid Office at your school.
  3. Scholarships. There’s nothing like free money to help defray the cost of college. And the good news is, there are a host of scholarships available on both a local, state, and federal level that can get you that money. Here are some tips to help you find scholarships and to help boost your chances of getting one. Remember that scholarships aren’t just for first-year students; many are renewable and available in future years. And, if your daughter is a STEM major, there are special scholarships for that too. To help make college possible, each month Brazos awards a $5,000 scholarship to a deserving student, through our Murray Watson Jr. Scholarship! We also offer our $1,000 No Essay Scholarship (P.S. it takes less than one minute to enter!)
  4. Grants. Scholarships aren’t the only free money available for managing college expenses. You may also be able to take advantage of grants. Grants, which are offered by the government, schools, or even private organizations, also don’t need to be repaid. But unlike scholarships that are based on academics, athletics or some other interest/talent, grants are often need-based. Talk to your Financial Aid office or dean of the school to find out about grant opportunities. You can also research corporations and professional associations that may offer them.
  5. Student contributions. Paying for college isn’t just for parents. Students who contribute financially to their education will build financial literacy and empowerment. They can contribute money earned through work-study or a part-time job while in school. Or, they can use money from summer jobs to help with tuition bills.
  6. Gifts. As you know all too well, college tuition is expensive. That’s why affording the cost of college is often a multi-generational endeavor with grandparents and other relatives helping out. Relatives can help with the cost of education in a few ways. They can gift money to the student directly to help pay for tuition, room & board, supplies, and other expenses. They can also gift to a school directly to help pay tuition, or help fund or open a 529 savings plan. Keep in mind, though, gifts could impact eligibility for Financial Aid. There also may be tax implications, so it’s important that you talk to a tax consultant or advisor first.
  7. Student loans. A federal student loan is offered by the federal government, and generally offers advantageous benefits and competitive rates and are not based on your credit or income. However, federal student loans have limits to the amount you can borrow and often those limits are insufficient to cover the costs of college. Private student loans are offered by banks, credit unions, and non-profits like Brazos and can help cover unmet need when grants, scholarships and federal student loans are not enough. Private loans are based on your credit and income so you may need a strong co-signer to qualify. While it is recommended that you exhaust all forms of federal aid first, including federal student loans, a competitive private student loan can be an important tool to help you cover unmet expenses. (Learn about other differences between federal and private loans) Check out what rates you might qualify for using our student loan calculator. And, see how Brazos fixed rates stack up against competitors.

Get BIG-TIME help with paying for college from Brazos

For more than 40 years, Brazos Higher Education has been helping make education more affordable for students and parents. As a Texas non-profit, we can offer you savings on a wide range of student loans. Contact us today!