Paying for College

Most families pay for college using a combination of savings, current earnings and financial aid. According to a recent Sallie Mae survey, How America Pays for College, parents pay, on average, about half of college expenses each year and students are responsible for the other half. Part of the student portion is paid with scholarships and grants. About half of families—either the student or a parent, or both—borrow some money to pay for college each academic year.

Planning to pay for college should start early with a college savings plan. The advantages of saving for college include:

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  Saving early and regularly gives compound interest time to accumulate to your benefit.
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  By starting early, you can save smaller amounts over a longer period of time.
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  Early planning allows you to save for both education and retirement.
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  Early investing helps students complete college with less debt.
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  Having a larger college fund gives students a broader range of college choices.

There are a variety of ways you can save for college. 529 college savings plans are intended just for college.

An innovative way to save for college is through Upromise where you can earn college savings rewards with everyday spending.

As a college-going student nears junior year of high school, he or she should start searching for, then applying for scholarships outside of the college the student plans to attend. When searching for scholarships, be sure to contact local groups, clubs, businesses, churches, and organizations. Usually, these types of scholarships are not widely publicized—fewer applicants equal higher odds of winning. Additionally, students should search Sallie Mae's free online scholarship search database of information on 2.9 million national scholarships.

After you've read about the types of financial aid available and considered applying for aid, visit Sallie Mae's Education Investment Planner to create a paying-for-college plan that works for you and your family.

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