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  • Writer's pictureMarcus P. Miller, CFP®, MBA

8 Tips to Make College More Affordable

Getting a college degree can be expensive, but it doesn't have to be. To make college more affordable, follow these tips:

  1. Start Saving Early: The earlier you start saving, the more money you can accumulate and the less money you'll need to borrow for college.

  2. Investigate Your Options: Carefully consider your financial situation and explore all of the options available to help finance your child's education.

  3. Research Tax Benefits: Look into what tax benefits are available in your state to help reduce the cost of college.

  4. Apply for Scholarships: Many scholarships and grants are available with different eligibility criteria, so research these options thoroughly to maximize your chances of securing financial aid.

  5. Take Advantage of Work-Study Programs: Students can get part-time jobs through work-study programs to help pay for their tuition and other college expenses.

  6. Utilize 529 Plans: This is one of the best options available to save money for college. 529 plans allow tax-free growth and withdrawals, making this a more attractive option than other college savings accounts.

  7. Consider Roth IRAs: Though primarily used as retirement accounts, Roth IRAs may also be used to cover education expenses. However, make sure that you prioritize your retirement savings first.

  8. Explore Other Options: There are other options available to help pay for college, such as private student loans and military benefits. Make sure to research all the available options before making a decision.


Did you know that the average cost of tuition and fees at a private four-year college in the US is over $27,940 per year? Paying for college is a significant financial challenge for many families, and it's important to plan ahead to ensure that you can cover the cost of tuition, fees, and other expenses. There are several different options for paying for college, as well as ways to save for it. In this blog post, we'll explore the different methods of paying and saving for college, and discuss which options may be best for high-income families.

Four young people meeting at a table

Options for Paying for College


Paying Out-of-Pocket

Paying for college out of pocket means using personal savings, income, or other assets to cover the cost of tuition and expenses. While this option can be advantageous for families who have significant financial resources, it's important to consider the impact on overall financial stability and long-term goals. One potential benefit of paying out of pocket for college is that there are no interest charges or loan repayment requirements. Additionally, some families may be eligible for tax credits or deductions for educational expenses, such as the Lifetime Learning Credit or the American Opportunity Tax Credit. However, paying out of pocket can also be a significant financial burden, particularly for families who have limited resources or other financial priorities. It's important to carefully consider the potential impact on retirement savings, emergency funds, and other investments before making a decision to pay for college out of pocket.

Private Student Loans

Private student loans are a way to borrow money from a financial institution to cover college expenses. Private loans may offer more flexible repayment options than federal loans, but they generally come with higher interest rates and fees. Private loans may also require a co-signer, who is responsible for repaying the loan if the borrower is unable to make payments. Private loans can be a good option for families who have exhausted other sources of funding, but it's important to carefully consider the interest rates and fees before taking out a loan. Additionally, private loans may not offer the same borrower protections and repayment options as federal loans, and they may not qualify for loan forgiveness or other government programs. It's important to compare the terms and conditions of different private loans and consider the impact on long-term financial goals before taking out a loan.

Federal Student Loans

Federal student loans are loans provided by the government to help students and their families pay for college. These loans often offer lower interest rates and more flexible repayment options than private loans, and they do not require a credit check or a co-signer. Federal loans also offer borrower protections, such as deferment and forbearance options, as well as loan forgiveness and income-driven repayment plans. However, federal loan amounts may be limited, and they may not cover the full cost of college. It's important to carefully consider the terms and conditions of federal loans and explore other sources of funding before taking out a loan. Additionally, it's important to stay informed about changes in federal loan policies and repayment options in order to make the most informed decisions about borrowing for college.


Work-Study Programs

Work-study programs are a way for students to earn money while attending college. These programs are typically offered by colleges and universities and provide part-time employment opportunities for students to help cover their college expenses. Work-study jobs may be on or off-campus, and they may be related to the student's field of study or a general work assignment. Work-study programs can be a good option for students who want to earn money and gain work experience while in college. Additionally, work-study earnings are not considered when determining financial aid eligibility for the following year, which means that the amount earned will not reduce the amount of financial aid awarded. However, work-study jobs may not pay as much as other part-time jobs, and the number of hours a student can work may be limited. It's important to consider the potential impact on academic performance and overall workload before committing to a work-study program.


Scholarships and Grants

Scholarships and grants are forms of financial aid that do not need to be repaid and are awarded based on a variety of factors, such as academic achievement, talent, and financial need. These forms of financial aid can be a great way to help cover college expenses and reduce the need for loans. Scholarships and grants can come from a variety of sources, including colleges and universities, private organizations, and government agencies. The application process for scholarships and grants can be competitive, and it's important to start researching and applying early to increase your chances of receiving aid. One advantage of scholarships and grants is that they do not need to be repaid, which can help reduce the overall cost of college. However, not all scholarships and grants cover the full cost of tuition and other expenses, and eligibility may be based on a variety of factors. It's important to carefully research the terms and conditions of each scholarship or grant and to explore other financial aid options to ensure you are able to cover the full cost of college.

Pell Grant

The Pell Grant is a form of federal aid that is specifically designed to help undergraduate students with financial need pay for their education. Unlike loans, the Pell Grant does not have to be repaid, making it an extremely beneficial source of financial assistance. The maximum amount granted varies year by year, and the exact amount you receive will depend on your financial need, the cost of attendance at your school, and your status as a full-time or part-time student. However, there are limitations - Pell Grants are usually only available for students who have not yet earned a bachelor's or professional degree. It's crucial to fill out the Free Application for Federal Student Aid (FAFSA) as soon as possible each year to apply for the Pell Grant and other forms of federal aid. The Pell Grant can make a significant difference in reducing the financial burden of college, but it's also important to explore all other available financial aid options to ensure the full cost of your education is covered.


Options for Saving for College


529 Savings Plans

A 529 savings plan is a tax-advantaged investment account designed to help families save for college expenses. Contributions to a 529 plan are made with after-tax dollars, but earnings grow tax-free and are not subject to federal income tax when withdrawn to pay for qualified higher education expenses. Many states also offer state tax deductions or credits for contributions to 529 plans. 529 plans offer a variety of investment options and typically have high contribution limits, making them a good option for families who want to save for college over time. However, there are restrictions on how the funds can be used, and withdrawals not used for qualified expenses may be subject to taxes and penalties. Additionally, 529 plans may impact eligibility for financial aid, as the funds are considered an asset of the account owner, typically the parent or guardian. It's important to understand the specific terms and conditions of a 529 plan and to consider the potential impact on financial aid eligibility before opening an account.

Coverdell Education Savings Accounts

Coverdell Education Savings Accounts (ESAs) are another tax-advantaged investment account designed to help families save for education expenses, including both college and K-12 expenses. Contributions to a Coverdell ESA are made with after-tax dollars, and earnings grow tax-free if used for qualified education expenses. Like 529 plans, Coverdell ESAs offer a variety of investment options. However, there are annual contribution limits and income restrictions on who can contribute, and the funds must be used by the time the beneficiary turns 30 years old. Additionally, Coverdell ESAs may also impact financial aid eligibility, as they are considered an asset of the account owner, typically the parent or guardian. While Coverdell ESAs offer some flexibility in terms of the types of educational expenses they can be used for, it's important to carefully consider the terms and conditions of the account and to explore other options before deciding to open one.


Roth IRAs

A Roth IRA is a retirement savings account that can also be used to save for college expenses. Contributions to a Roth IRA are made with after-tax dollars, but earnings grow tax-free and withdrawals are also tax-free if certain conditions are met. One advantage of using a Roth IRA for college savings is that the account owner can withdraw contributions at any time without penalty or taxes, making it a more flexible option than other college savings plans. However, earnings withdrawn for non-qualified education expenses may be subject to taxes and penalties. Additionally, there are contribution limits for Roth IRAs, and prioritizing retirement savings over college savings may not be the best option for every family. It's important to carefully consider the potential impact on retirement savings and to explore other college savings options before deciding to use a Roth IRA for college savings.


In conclusion, planning and saving for college requires careful consideration and strategizing. Choosing the right financial aid and savings options depends on each family's unique circumstances, financial capabilities, and long-term goals. As you navigate the financial aspects of higher education, remember that while college can be costly, there are numerous aid and savings avenues available to you. From grants and scholarships to various savings accounts, explore all your options thoroughly. Consult with a financial advisor if necessary, and ensure to start saving early. Your efforts today can significantly reduce the burden of future educational expenses, opening the path for a seamless and worry-free college journey.


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The opinions expressed in this website are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. We cannot provide financial advice if we do not know your specific financial situation. Please talk to your financial advisor or do your own research before making financial decisions. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Any indices referenced for comparison are unmanaged and cannot be invested into directly. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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