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A simple guide to paying for college

Whether you’re looking for scholarships or applying for loans, here’s what you need to know.

Portrait of a beautiful, young and intelligent-looking blonde braids college student woman wearing a white shirt and jeans smiling as she studies at the campus of her university

Most families already know that college can be expensive, but not all families know that there are many different ways to save on college costs.

You may not need to depend on federal student loans to cover the costs of college, especially when you consider all of your available options and make the kinds of decisions that could help you — and your child — save a considerable amount of money on their college education.

How much money? Depending on the choices you make, you and your child could save tens of thousands of dollars on the cost of college — or more.

That’s why we put together a simple guide to paying for college. Whether you’re looking for scholarships, applying for grants or navigating the fine print of 529 plans, here’s what you need to know, whether your kid is a high school senior or still in the womb.

In this article:


Not all families are able to set aside money for college, but if you have the ability to help your child cover their college costs, there are many different ways to save for college expenses.

Some parents put money in a savings account, for example. Many families also encourage their children to set aside a portion of the money they earn or receive, whether they get a generous birthday check from a grandparent or begin working a part-time job, to help cover college costs.

529 Plans

529 Plans are tax-advantaged educational savings accounts that allow parents, grandparents and other relatives and friends to help cover the costs of a young person’s education.

“These accounts grow tax-free, and earnings are never taxed when used to pay for a wide range of post-secondary educational expenses,” says Patricia Roberts, Chief Operating Officer at Gift of College, Inc. and author of Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans. Qualified educational expenses include not only college, but also trade school and vocational training programs, giving your kids plenty of opportunities to spend their 529 plans wisely.

If you are concerned that you won’t be able to use all of the money in the 529 Plan, don’t worry.   “Beginning in 2024, leftover funds can be rolled over to a Roth IRA for the benefit of the 529 account beneficiary, subject to several conditions,” Roberts explains. “The funds can also be used by a family member of the account beneficiary, such as a sibling, or remain in the account for a future child of the account beneficiary.”

Life insurance

Most parents don’t think of life insurance as a college savings tool. But in a worst-case scenario, having an affordable life insurance policy in place could give your family the financial stability it needs to help your children complete their college education.

Even after your children graduate from college, your life insurance policy could help them cover the costs. Many adult children are still working to pay off student debt, for example, which means that your life insurance policy could help your children cover the costs of college even if it’s been decades since they earned their diplomas.


There are many different ways to apply for college scholarships, whether you’re applying directly with the school your child plans to attend, seeking out scholarship opportunities with local organizations or checking your child’s eligibility for one of the many scholarships offered by major corporations.

Scholarships are an excellent way to cover the costs of college, but be aware that many scholarships come with specific requirements. If your child receives an athletic scholarship, for example, they are generally expected to participate in a college sport — which comes with a significant time commitment — while maintaining a high grade-point average.

Other scholarships require students to write letters of thanks to donors or complete various community service projects. If your student fails to meet the standards set by the scholarship committee, their scholarship may be revoked.


Many students take out loans to pay for college, but before you and your child begin applying for student loans, make sure you’ve chosen a school that will require you to borrow as little as possible. “The most important factor in borrowing less for college is picking the school that will require the least total money coming out of your pockets,” explains Jed Macosko, a professor at Wake Forest University and President of

If your family income is less than $120,000 per year, here is Macosko’s advice: “For students whose parents make less than $120,000 total per year, the best four-year option is a private school with a large endowment. Getting accepted in the schools with the largest endowments is difficult, but schools with moderate endowments are accessible and still provide good financial support to students whose parents make less than $120,000.”

Families with higher incomes may have different options. “If a student’s parents make more than $150,000 total per year, the best option often is a public university in the student’s home state, or a state that offers reciprocity,” Macosko explains.

“But even in those situations, a student who really wants to lower the amount of borrowing they will do should also look at private universities that offer merit scholarships to students of their caliber. This merit option means that often a student will have to attend a school that is less prestigious than what he or she might otherwise be able to attend, so there are definitely trade-offs.”


Grants, unlike loans, do not have to be paid back. If you and your child are interested in applying for grants to cover the costs of college, the first step is to fill out the FAFSA, also known as the Free Application for Federal Student Aid. If your family is determined to be eligible for financial aid in the form of college grants, you’ll receive more information on how to continue the process.

Your state may also have a grant program that could help you and your child save money on college costs, so make sure you check all of the available resources and fill out all of the necessary applications.


Many colleges and universities offer work-study programs designed to help students cover the costs of their college education. Some work-study assignments, such as lab assistants or library assistants, allow students to build experience that can help them get internships or jobs after they graduate. Other work-study assignments include cafeteria work and resident assistance — the kinds of jobs that help students build social skills and make connections with their peers.

Off-campus jobs

Getting an off-campus job can also help young people cover the costs of college. And if your child is interested in working full-time, they may be able to pay off their college education while building much-needed experience in their future career.

“Working full-time while attending college or grad school part-time can be a good way to reduce financial stress,” Roberts explains. “Plus, many employers offer tuition assistance programs which can be helpful in covering at least part of the cost of higher education.”

Living at home

There’s one more factor to consider as you and your child discuss how to cover the costs of college. Is it possible for your child to attend a school that is close enough to allow them to live at home?

“Living at home while attending college or trade school locally is a great way to reduce overall costs,” says Roberts. While your child may be concerned that living at home will prevent them from having the kind of social life they were anticipating, setting expectations and boundaries ahead of time can allow your child to have many of the traditional college experiences—from late-night study sessions to all-night parties—without disrupting the rest of the family.

Your child’s college classmates may even come to appreciate your home as a space to gather and socialize.

Finishing your degree on time

Roberts has a final piece of advice for students—and parents—who are thinking about how to cover the costs of a college degree: “One of the best ways to save money on a college degree is to finish on time once you begin.”

The less time you spend on your college education, the less it is likely to cost. So help your child develop the kind of study habits that will allow them to earn their degree as efficiently as possible, and you could end up saving tens of thousands of dollars on the cost of their college education.

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About Nicole Dieker

Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate,, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.

Read more by Nicole Dieker

Our editorial policy

Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our editorial policy

Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.

Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.

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