SoFi

The day you leave for college may still seem like a long way off, but high school can be a great time to start saving for future college expenses, especially as the cost of higher education continues to climb each year.

Just making a few simple moves, like picking up a part-time or summer job and signing up for AP classes (which may allow you to skip some college classes and save on tuition), can go a long way once you get to campus.

Read on for more tips on how to start saving up money for college while you are still in high school.

Advancing Yourself With AP Classes

Achieving an AP Exam score of 3 or higher may allow incoming freshmen to skip introductory college courses or gain credit toward graduation. The College Board reports that nearly all colleges and universities in the U.S. offer credit, advanced placement, or both based on your AP scores.

Most colleges have a policy outlining the minimum scores needed to earn credit for specific AP Exams, plus how much credit will be awarded and how it applies to your degree or graduation requirements. The College Board offers an AP credit policy search online, but it’s wise to double check with your individual school.

Earning college credit before you even step foot on campus freshman year can be a great way to save money on future college classes in the long run. You might even be able to graduate early, which could mean thousands of dollars in savings depending on which university you attend. Of course, there are fees to take the AP Exams, but that amount may be offset by the amount of credit hours you’re able to gain if you score well.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Picking up a Part-Time or Summer Job

Working in high school and setting aside at least a portion of your earnings in a savings account earmarked for college can definitely come in handy when it comes time to cover expenses like books, meals, entertainment, or off-campus rent.

Recently, some companies with part-time and entry-level jobs — perfect for high school students — have started offering tuition support or reimbursement for eligible employees. At Starbucks, for instance, part- and full-time employees are able to get 100% of their tuition reimbursed for a first-time bachelor’s degree through Arizona State University’s online program. Working at Chipotle, you may also be able to receive some tuition assistance every year.

Managing Expenses by Budgeting

It’s never too early to start good money habits, such as maintaining a balanced budget. You might start with a simple spreadsheet that tracks your monthly income (like allowance or any paychecks you earn) as well as your monthly spending, separating your expenses into essential and nonessential. You may be able to free up more money for college savings by cutting back on nonessential expenses. The popular 50/30/20 budget rule suggests putting 20% of your income toward savings for long-term money goals, like saving for school.

Starting to save in high school could potentially help minimize the financial burdens you face during college. Maintaining a budget in high school could also help prepare you for keeping your expenses in line as a college student.

When making a college budget, make sure you research what things like books, transportation, rent, and groceries are going to cost in the area. You can then look at what you might be able to cut in order to save more, like smaller meal plans, off-campus housing, renting used textbooks, or taking the bus rather than bringing your car.

Recommended: 33 Ideas for Saving Money While Dorm Shopping

Switching up Your Savings Account

A high-yield checking or savings account could earn you significantly more money by paying a high-than-average interest rate. This could help your college savings fund grow quicker.

If you earn a regular paycheck, one easy way to save is to split up your direct deposit between your checking and savings account. This way, you guarantee some money automatically ends up in savings, making it a little harder to spend. You could also set up an automatic transfer within your account so that you don’t have to constantly remind yourself to save.

Researching Scholarships and Grants

Scholarships and grants are both forms of aid that don’t need to be repaid, essentially making them free money. Getting a scholarship, or a few, can go a long way in lessening the financial burden you face in college. Some scholarships are awarded to incoming freshmen so spending some time researching scholarships and grants could pay off in the long run.

There are online databases, like FastWeb or Scholarships.com, that aggregate information about different scholarships and what their application process looks like. Each scholarship is likely to have their own eligibility criteria and application requirements so pay attention to the details when you are applying.

Different Ways to Pay for College

The U.S. government offers aid in the form of federal student loans, but also grants and some scholarships, which can significantly reduce the cost of college. It’s important when applying to schools to consider all of the costs involved. You can estimate your financial aid online ahead of time, so you can make an educated decision about where to attend school.

If savings, financial aid, and federal student loans aren’t enough to pay for college, private student loans are another option to consider. These loans are made by private lenders and aren’t required to follow the same regulations as federal student loans. Because of this, they lack the borrower protections afforded to federal student loans and are generally considered an option only after all other sources of funding have been reviewed.

💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.

The Takeaway

High school is the perfect time to start preparing for college and how you’ll pay for it. Taking on a summer or part-time job can boost your income and allow you to start socking away money for future college expenses. Other ways to make the cost of college more manageable include taking AP classes, researching scholarship options, applying for federal financial aid, and taking out federal or private student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIS0923016

A no-interest, or 0%, credit card means you won’t be charged any interest on your purchases for a certain period of time. In some cases, these cards also offer 0% interest on balance transfers for a set period of time.

But these cards also have some potential downsides. For one, the 0% annual percentage rate (APR) is only temporary. Once the promotional period ends, a potentially high APR will start accruing on any remaining balance you have on the card. In addition, you typically have to pay a fee to transfer your balance, which might negate any savings on interest.

Here are key things to know before signing up for a no-interest credit card.

Pros of No-Interest Credit Cards

Using a 0% APR credit card can create some breathing room within your budget. Here’s a look at some of the key perks, and how to make the most of them.

No Interest During the Promotional Period

Of course, one of the biggest advantages of a zero-interest card is that you’ll pay just that — zero interest — for a certain period of time, which may be anywhere from six to 18 months. If you use the card to make a large purchase and are able to pay it off in full before the end of the promotional period, it can be the equivalent of getting an interest-free loan.

Opportunity to Pay Down Debt Faster

In some cases, you also get the 0% APR on any balance you transfer over from another credit card. This can make a no-interest card a good option for consolidating and paying off high-interest credit card debt. If you have a plan in place to pay off the debt within the promotional period, a balance transfer could improve your financial situation.


💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.

Perks and Bonus Rewards

Some credit cards with 0% APR introductory rates on purchases and/or balance transfers also have additional rewards bonus programs. This might include a welcome offer and/or cash back or rewards points based on each dollar you spend. These extras can lead to even more savings.

For example, let’s say you want to purchase a new chair that costs $500. After some research, you find a credit card offering an introductory 0% APR for 15 months and a $200 rewards bonus after you spend $500 on purchases within the first three months of opening the account. You decide this will work for your financial situation, so you apply and are approved. After buying the chair with the new credit card, you pay the balance in full before the promotional period ends.

With this example, not only would you have paid nothing in interest, you would also have netted $200 in rewards cash.

Cons of No-Interest Credit Cards

Some might look at no-interest credit cards as too good to be true. That’s not necessarily the case, but there can be some drawbacks to them. Here are some potential pitfalls to be aware of.

Temporary Promotional Rate

Alas, that 0% APR doesn’t last forever. If you use the card for a large purchase but are unable to fully pay it off before the end of the promotional period, any balance will start accruing the card’s regular APR.

At that point, the card may not have any advantages over any other card. In fact, the card could have an APR that is higher than average. When comparing 0% rate cards, it’s important to look at what the rate will be when the promo period ends and exactly when it will kick in.

Also keep in mind that you could lose the 0% intro APR before the end of the promo period if you are late with a payment. Here again, it pays to read the fine print.

Fees for Balance Transfers

Some — but not all — no-interest credit cards also feature a 0% APR on balance transfers. However, you typically still have to pay a balance transfer fee, often around 3% to 5% of the transferred balance. If you’re transferring a large balance from another card, the balance transfer fee could actually be significant. You’ll want to do the math before making the switch to be sure it will work in your favor.

Interest May Apply Retroactively

Similar to a no-interest credit card, a deferred-interest credit offer is one that’s commonly used by individual retail stores. If you’ve been asked if you’d like to apply for a store’s credit card when you’re making a purchase, it might be one that comes with a deferred interest promotion.

Like no-interest credit cards, a deferred-interest card doesn’t charge interest as long as the balance is paid in full within a certain time period. The biggest difference between the two: If the balance is not paid in full before the promotional period ends, interest will be applied to the entire purchase — not just the remaining balance. And APRs on deferred-interest cards can be even higher than APRs charged by regular credit cards.

Can Credit Scores Be Affected by No-Interest Credit Cards?

Applying for a new credit card results in a hard inquiry on your credit report, which can have a minor, temporary negative impact on your credit scores. This is generally nothing to worry about.

However, repeatedly opening new credit cards and transferring balances to them can cause a lasting negative impact on your credit. That’s because too many hard inquiries too close together can lead lenders to believe you’re applying for more credit than you can pay back.

In some cases, a balance transfer can positively impact your credit by helping you pay off your debts faster than you would otherwise be able to. This lowers your credit utilization ratio, or how much of your available credit you are currently using, which is a key component of your credit score.


💡 Quick Tip: Swap high-interest debt for a lower-interest loan, and save money on your monthly payments. Find out why SoFi credit card consolidation loans are so popular.

The Takeaway

A 0% intro APR card can help you avoid paying interest on your purchases for a set period of time. It can also allow you to consolidate and pay down credit card debt faster.

Keep in mind, however, that cards with no interest often come with a balance transfer fee. Also be aware that your interest rate will likely be much higher when the intro APR offer ends if you haven’t paid off your balance by then.

No-interest credit cards aren’t the only option for paying off debt. You may also be able to pay off high-interest credit cards with a personal loan. A personal loan calculator can give you an idea of what your potential savings might be.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. Checking your rate takes just a minute.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

SOPL0723024

College is expensive. On top of tuition and room and board, you’ll also need to buy quite a few things to set up your dorm room – from power strips and lamps to bedding and decor. Fortunately, there are ways to save money on dorm room essentials without sacrificing on style, function, or comfort. What follows are 32 smart college shopping tips and tricks that will help you set up your room without breaking the bank.

Tips to Save Money Shopping for Dorm Room Essentials

If you are looking to save when it comes to college dorm shopping, here are some helpful tips.

1. Research Your Dorm

Before going dorm room shopping, look into how big your dorm room is and what furnishings are provided by the university. Then, you’ll have an idea of what you need to buy and can avoid spending money on things that you’ll have when you get to the dorm.


💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

2. Check Out the Dorm Room Rules

It’s also important to find out the rules for your dorm room. For instance, perhaps your college won’t allow you to have candles or incense burning in your room, or it won’t let you bring a microwave. You’ll know you don’t need to purchase these items because they are forbidden.

3. Don’t Buy Too Much

Dorm rooms are (often) tiny. When looking into how to shop for your college dorm, less is generally more. Avoid buying oversized items and don’t feel like you need to get every single item on those “college dorm essentials” lists.

Think of the things you already use in your daily life and use that as a guide for what you’ll need in college. If you find there is something you’re missing when you arrive, you can always pick it up after move-in day.

4. Create a College Dorm Checklist

Make a comprehensive list of what you need before you start shopping. When you’re in the store, don’t be tempted to spend just because something is cute or it seems like you’ll absolutely need it. You typically need much less than you think.

5. Take Inventory of What You Have

You may already own a bunch of things you need for your dorm room, such as a shower caddy or a small fan. Go around your room at home and take inventory of what you have so you can decide what to buy.

6. Assess the Laundry Situation

Before you purchase a laundry basket or bag, you may want to find out where the washing machines are located — are they in your dorm or across the quad? Based on the answer, you might choose a laundry bag over a basket or vice versa, and can avoid buying the wrong thing (and wasting money).

7. Use Coupons

Look for coupons in your local circulars as well as online when determining what to buy for college dorms. Check out coupon websites like RetailMeNot and Coupons.com, or use a browser extension like
Honey to snag the best deals.

8. Shop at Discount Stores

Why pay full price when you can go to a discount store and find exactly what you need for less? Check out places like Ross, HomeGoods, Marshalls, or Dollar Stores for deals on college shopping needs.

9. Look for All-in-One Sets

Complete sets — such as Bed-in-a-Bag, towel, dish, and toiletry sets — are often an excellent value compared to buying each item individually. Sets also make packing easier, since everything is essentially already packed. Just make sure you actually need everything (or most) of the items included in the set.

10. Sign Up for Target Circle

Another retailer that has a wide selection of items for dorm rooms is Target. People who sign up for their rewards program, Target Circle, can receive exclusive access to special discounts and promotions.

Recommended: How to Save Money in College – 20 Ways

11. Use Amazon Prime

Students can get a significant discount on an Amazon Prime membership, plus discounts on flights and free food delivery. You’ll also receive fast, free delivery on all your college dorm essentials.

12. Use a Cash-Back Credit Card

If shopping with a credit card, use one that offers cash-back. If you are searching for a credit card, try to find one that has no annual fee and a welcome bonus.

13. Don’t Buy the Cheapest Stuff

While it may be tempting to buy the cheapest dorm room items possible, buying flimsy things that will need to be replaced may not be cost-effective. Items will need to be sturdy enough to last you over the next four years or so. Even if you have to pay a little more up front, it’s going to be worth it if your stuff actually lasts until graduation.

14. Leave the Printer at Home

Some colleges offer free printing services as part of tuition. If that’s the case at your school, don’t worry about buying a printer.

15. Shop The Sales

Consider shopping when stores are running sales. This could be on shopping holidays like Labor Day and the Fourth of July, or in August when college kids are getting ready to head back to school.

16. Don’t Fall for the “Great for Dorms” Tags

Be wary of items labeled as ideal for dorms. These may be marked up and it may be possible to find a less-expensive counterpart that isn’t necessarily marketed for college dorm rooms.

17. Do Price Matching

Look into the prices of products at different stores to make sure you’re getting the best deal. If you find a lower price at another store, ask your preferred store if they will match the other deal. Many will.

18. Use Your College ID for Discounts

If you already have your student ID, you may be able to snag some bargains on college dorm essentials from some local stores. Keep your ID on you at all times when you’re out and about and shopping for the school year.

Recommended: 10 Money Management Tips for College Students

19. Create a Budget

Come up with a budget for your college dorm checklist and then stick to it. When you go shopping without a set college shopping budget, you could end up spending way too much.

20. Look for Hand-Me-Downs

Did your siblings go to college? How about your friends? They may have dorm room essentials they’re no longer using and would be happy to give them to you. Ask around and see if they have anything they’re willing to pass on before you spend money.

21. Check in With Your Roommate

If you coordinate with your roommate on things you need to buy, you can save money. For instance, maybe they’re willing to buy some cleaning supplies if you provide snacks or bring a vacuum.

Recommended: College Freshman Checklist for the Upcoming School Year

22. Try Thrift Stores

Check out your local thrift stores and hunt down bargains on dorm room essentials.

23. Buy on Facebook Marketplace

You can also find deals on Facebook Marketplace. Log on and search for deals near your home or college, or find sellers who are willing to ship your dorm room essentials to you.

24. Use Craigslist

When figuring out what to buy for college dorms, you might also check out Craigslist for local items for sale. Don’t be afraid to haggle to pay the prices you can actually afford for your college dorm stuff.

25. Shop with Cash Back Websites

Take a look at sites like Rakuten or Upromise that allow account holders to earn rewards on purchases. You can shop for dorm room items and earn cashback or other rewards on the items you were already planning to buy.

26. Use Gift Cards

Did you receive gift cards from family members and friends when you graduated from high school? Then put them towards your college dorm checklist so you don’t have to spend your own money on items.

Recommended: Top Gifts for College Students

27. Start a Registry

Your family and friends may want to contribute and purchase some of your dorm room essentials for you. Stores like Walmart, and Target make it easy to start a college dorm registry you can share with your loved ones.

28. Look for Free Shipping

Look for free shipping to avoid expensive shipping costs. If you’re going to college far away from home, double check that the stores you are ordering from offer free shipping to that location.

29. Wait to Shop

If you’re on the fence about some purchases, wait until you move into the dorm. This way you can avoid spending money on something you won’t actually use.

30. Rent Instead of Buying

Sometimes, colleges will offer you the chance to rent bigger ticket items, like a minifridge, for your dorm room. If you price it out, you may find this is cheaper than buying the item, especially if you split the rental cost with your roommate.

31. Shop With Friends

You might want to get a group of friends together to go shopping together. You can share tips and possibly get better deals by purchasing in bulk and splitting up what you buy.

32. Sign Up for Stores’ Email Lists

Stores send coupons, sale alerts, and more out to their mailing lists. Consider signing up for the mailing list for stores at which you plan to do a considerable amount of dorm room shopping.

33. Set Up Price Alerts

You can set up price alerts through tools like Droplist and CamelCamelCamel to find out when college dorm stuff is going on sale so you know when to purchase it.

Bonus Tip: Best Places to Buy College Stuff

When shopping for college dorm stuff, where you shop can have a big impact on how much you spend, whether you’re shopping online or in person. Here are a few stores that offer a variety of dorm room essentials, typically at competitive prices:

• Amazon

• Target

• Walmart

• Overstock

• Wayfair

• HomeGoods

• Marshalls

• TJ Maxx

• Ross

• The Container Store

• The Dollar Tree

• IKEA


💡 Quick Tip: Need a private student loan to cover your school bills? Because approval for a private student loan is based on creditworthiness, a cosigner may help a student get loan approval and a lower rate.

The Takeaway

Shopping for college dorm room essentials can feel overwhelming, but things like making a list, creating a budget, shopping online with free shipping, and taking advantage of student discounts can help make it more manageable, and more affordable.

Another way to help with college expenses is to take advantage of any financial aid you are eligible for. You apply for aid simply by filling out the Free Application for Federal Student Aid (FAFSA) each year. Your financial aid package may include grants, scholarships, work-study, and federal loans, which can be used for tuition as well as other college expenses.

If you still have gaps in funding, you might also look into private student loans. These are available through banks, credit unions, and online lenders. Rates may be higher than federal loans, but you can often borrow up to the full cost of attendance. Just keep in mind that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

Photo credit: iStock/kali9

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIS0823044

College can be expensive. According to the College Board, the average cost of tuition and fees at a four-year private nonprofit institution for the 2022-2023 school year was $39,400.

While that number may inspire sticker shock, there are options for students looking to make college more affordable. Some cost-cutting strategies include taking AP classes in high school (which may allow you to skip some intro-level courses and reduce your tuition), starting out at a community college, living at home to save on room and board, and applying for a variety of scholarships. Read on for a closer look at these (plus other) ways to cut expenses and save money on college.

Ways to Make College More Economical

1. Take Advantage of AP Credits

Taking Advanced Placement credits in high school could cut down on the overall cost of college. Here’s how: If you take an AP course and get a 3 or higher on the AP exam, colleges may count that class towards the overall credit hours you need to graduate.

Some colleges may require students to score a 4 or a 5 on the exam in order to get credit. You can take a look at the requirements at different schools and for different courses on the College Board website.

The average cost of one credit hour at a public four-year college is $309 (the average cost per course is $926). The more credits you enter college with, the fewer total credits you typically have to pay for, and the quicker you can jump into more advanced courses. Early graduation is one way to make college more affordable.

Of course, not all schools accept all AP credits. Some ultra-competitive schools may not let you use AP courses to reduce the total number of credits you’ll need to graduate or to skip introductory level courses.


💡 Quick Tip: You’ll make no payments on some private student loans for six months after graduation.

2. Start Out at a Community College

Where you choose to go to college can have a big influence on the overall cost. Some students may consider starting their college journey at a community college and then transferring to a four-year college or university to finish their degree.

One of the financial benefits of community college is that courses can be significantly less expensive than at a four year college. According to the College Board, the average cost for tuition and fees for a student attending a two-year, in-district public college was $3,860 during the 2022-2023 school year.

3. Attend an In-State University or College

If community college isn’t the right fit for you, you might consider attending an in-state college or university. Typically, in-state tuition is more affordable than out-of-state tuition or tuition at a private college.

According to the College Board, the cost of tuition and fees for in-state tuition at a four-year public institution averaged $10,950 for the 2022-2023 school year. For out-of-state students, that rose to $28,240. However, that is still significantly less than the average cost of tuition and fees for private four-year universities, which was $39,400.

4. Look into Regional Tuition Exchange Programs

Students who are attending a school in a nearby state can look into tuition reciprocity programs to see if their school offers anything. Reciprocal tuition is when states offer students from a partner state in-state tuition. For example, Minnesota and Wisconsin have a tuition reciprocity agreement. This is one avenue that allows out-of-state students to pay in-state tuition.

5. Commute to School and Live at Home

Room and board is another major expense for students living away from home. If you are attending a school near your home, you could consider living with your family a bit longer. Living at home can help students save a significant amount of money on college.

Recommended: How to Pay for College With No Money Saved

6. Live Off Campus

Living on-campus can have benefits like proximity to classes, friends, and extracurriculars. But on-campus living can be pricey. Depending on where your school is located and what the rental housing market is like, living off-campus may be less expensive than paying for on-campus housing.

Some schools might require first-year students, or even in some cases upper-classmen, to live on-campus. Others may not have these restrictions. Often, schools will publish information on what percentage of the study body lives on-campus vs. off-campus, which can help inform what popular living situations at that school are.

7. Apply for Financial Aid Early

Federal financial aid includes scholarships, grants, work-study, and federal student loans. Some aid is awarded on a first-come, first-served basis, so applying early could potentially help you qualify for more aid than if you had applied closer to the deadline.

To apply for federal financial aid, students are required to fill out the Free Application for Federal Student Aid (FAFSA) annually. Schools may also use the information provided on the FAFSA to determine scholarship awards.

8. Choose The Right Student Loan

There can be a lot to consider when picking a student loan. There are two broad categories of student loans — private and federal. Federal loans are awarded to students based on information in their FAFSA. Private student loans are borrowed from individual lenders, such as banks, credit unions, or other financial institutions.
When evaluating your financial aid package, make note of the type of federal student loans you are awarded. For undergraduates, there are two main federal loans: unsubsidized and subsidized loans.

On Direct Subsidized Loans, the federal government covers the interest that accrues while you are enrolled in school at least half-time and during the loan’s grace period. These are awarded based on financial need. While it can seem minor, not having to pay interest on the loan for four or so years can significantly reduce the total cost of the loan.

For a Direct Unsubsidized Loan, the borrower is responsible for paying all accrued interest. Financial need is not a factor in qualifying for a Direct Unsubsidized Loan.

If you are exploring private student loans as an option to pay for college, know that they don’t always offer the same options or borrower protections as federal student loans. Individual lenders can set their own rates and repayment terms, so be sure to read the fine print before borrowing. In general, private student loans are considered an option only after all other sources of funding, including federal student loans, have been evaluated.

While considering private student loans, it’s a good idea to look at a few different lenders to find the best rate and terms for your personal situation. When making lending decisions, lenders will generally evaluate a borrower’s (or their cosigner’s) credit score and history, among other factors.


💡 Quick Tip: Federal student loans carry an origination or processing fee (1.057% for Direct Subsididized and Unsubsidized loans first disbursed from Oct. 1, 2020, through Oct. 1, 2024). The fee is subtracted from your loan amount, which is why the amount disbursed is less than the amount you borrowed. That said, some private student loan lenders don’t charge an origination fee.

9. Target Specific Scholarships

A scholarship is money awarded to students to help pay for school expenses, and it generally doesn’t need to be repaid. Because of this, applying for scholarships can go a long way in reducing the amount of money a student has to spend on college.

Scholarships can be awarded by the school, or by corporations, nonprofits or community organizations. Some scholarships are merit-based, while others may have non-academic criteria like a specific talent, heritage, gender, interest or field of study, or location.

There are websites, like FastWeb and Scholarships.com that aggregate information on scholarships and can make it easy to browse thousands of scholarships at a time and narrow them down to your specific interests. The application requirements may vary depending on the scholarship so be sure to read the application and expectations completely.

10. Spend Less on Textbooks

According to the Education Data Initiative, the average full-time undergraduate student at a four-year public university pays $1,226 for books and supplies in one academic year. Textbooks alone can cost over $100 each. While you may only use them for a few months, if they’re required by your professors it may be integral to passing your courses.

To save on textbooks, students have a few options. One is to buy a digital version of the book. Some textbook distributors offer e-versions of their books for a fraction of the price. Another way to save is to buy a used version of the textbook. Used books are often readily available at school bookstores or can be found online.

Some students may rent books. This is generally cheaper than buying a textbook, and when the class is done you can send the book back to the bookseller.

11. Opt Out of the Dining Plan

If you’re living off-campus and have a kitchen available to you, consider opting out of the meal plan offered by your school. These plans are often more expensive than buying and cooking your own food. Plus, if you are making your own meals, you have full control of what you eat.

Students who appreciate the convenience of the meal plan while living off-campus might opt for a less expensive plan. Schools generally offer different options for meal plans, such as unlimited plans and tiered plans based on meals per week.

The Takeaway

There are options to save money when it comes to paying for college. Before you even get to college, you might consider taking AP classes, which could potentially allow you to skip some intro level courses (and save on tuition). Another key factor in college affordability is the school you choose to attend. Some students may choose to go to an in-state school with a more affordable tuition. Other students may find that, thanks to a generous financial aid package, one of their other choices may be more affordable than they originally imagined.

The type of student loans you borrow can also impact the overall cost of your education. Federal loans offer benefits and borrower protections like flexible income-driven repayment plans. Students who still have gaps in funding can also apply for private student loans. These loans may come with higher interest rates but allow you to borrow more (typically up to the full cost of attendance) than you can access with federal loans.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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College is expensive, with the yearly cost of attendance at some private schools now topping $75,000. Looking at these numbers, you may wonder how you will ever possibly afford to send your kids to college.

But before you get too disheartened, it’s important to understand that a college’s published “sticker price” is often very different from what you actually have to pay (known as the net price). What’s more, just putting a small amount of money aside each month in a college fund can add up to a significant sum over time, especially if you take advantage of a tax-advantaged college savings account.

Read on to learn key things about how to save for college — from estimating how much you need to set aside to picking the right college saving fund.

Determining the Cost of College for Your Children

Tuition costs vary widely, depending on the type of school your child wants to attend, the type of degree they’ll earn (bachelor’s or associate), and even geographic location.

According to the College Board, the average annual college tuition costs for the 2022-23 school year were:

•   $10,940: public four-year in-state (a 1.8% increase from 2021-21)

•   $28,240: public four-year out-of-state (a 2.2% increase from 2021-22)

•   $39,400 : private nonprofit four-year (a 3.5% increase from 2021-22)

•   $3,860: public two-year in-district (a 1.6% increase from 2021-22)

The College Board also studied the annual, inflation-adjusted change in college tuition and fees over the last decade:

•   -1%: four-year public schools

•   -4%: two-year public schools

•   +6%: four-year private (nonprofit) schools

If your kids are young, you may wonder how much college will cost when it’s time for them to head off. Fortunately, there are many online calculators that can help you figure this out, taking factors like your child’s age, the type of school you expect your child to attend, and the expected rise in the cost of college into account.

💡 Quick Tip: You can fund your education with a low-rate, no-fee private student loan that covers all school-certified costs.

Net Price vs. Sticker Price

Every college and university, private or public, lists a sticker price, which is also known as the cost of attendance (COA). This price includes tuition, fees, room and board, books, supplies, and miscellaneous expenses.

The net price, on the other hand, is what a student would actually pay, after factoring in any financial aid provided by the college and the federal government.

Financial aid is based on your family’s income, as well as the student’s academic achievement. Aid is offered in the form of grants, scholarships, work-study, and sometimes federal student loans. Schools offer aid based on financial need, a student’s “merit,” or a combination.

When you fill out the Free Application for Federal Student Aid (FAFSA), you will receive a Student Aid Index, or SAI. (Previously, this was called the Estimated Family Contribution, or EFC.) Colleges use this number to determine the amount of financial aid they award to accepted students. Typically, colleges come up with a financial aid package to help bridge the gap between the school’s sticker price and what your family can afford to pay.

Indeed, sometimes colleges with the highest sticker price end up costing less than a college with a much lower sticker price.

Recommended: How to Start Saving for Your Child’s College Tuition

Using a Net Price Calculator

Fortunately, you can get an idea of what the net price will be for a particular college before you apply by using the government’s net price calculator. This tool can help students and their families get a better idea of the cost of college, after subtracting scholarships, grants, and other financial aid.

Keep in mind, though, that the net price calculator is going to require specific details about your income and assets, so the more transparent you are regarding your personal finances, the more precise your calculation is likely to be.

When is a Good Time to Start Saving for Your Child’s Education?

Generally, the sooner the better. In fact, it can be wise to set up and start making small monthly contributions to a college savings fund soon after your child is born.

For some familes, however, it may not be possible to start saving that early. It’s equally important to pay attention to your other expenses and family’s needs. For example, you may want to prioritize building an emergency and paying off expensive credit card debt over saving for college. It’s also a good idea to make sure you’re on track with retirement savings. At the end of the day, students are able to get loans for an education but it’s not possible to take out loans to fund retirement.

Some Options for Saving

529 Plan

A 529 education savings plan is an investment account that can be used to save for the beneficiary’s qualified education expenses. The funds can be used to pay for higher education or private elementary or high schools. A 529 plan allows your savings to grow tax-free, and some states even offer a tax deduction on your contributions.

All 529 plans are set up at the state level. However, you don’t have to be a resident of a particular state to enroll in its plan.

If your child decides not to go to school, it’s possible to roll the account over into the name of another family member. If the funds aren’t used for education-related expenses, there may be taxes and penalties.

Family members and friends can also contribute to a child’s college savings plan. They may choose to make deposits to an existing 529 account or set up one themselves, naming a beneficiary of their choice.

Some 529 savings plans offer an age-based investment option to automatically adjust the risk of the investment strategy as the beneficiary gets older. This type of investment approach might be similar to how a target date fund works in your retirement plan.

Regular Savings Accounts

You can also save for your child’s college tuition using a savings account at a traditional bank, credit union, or online bank. Just keep in mind that interest rates, even for high-yield savings accounts, tend to be relatively low. Plus, savings accounts don’t offer the tax advantages you can get with some other college savings vehicles.

It may be difficult to reach education financing goals through a traditional savings account alone since the interest rate might not keep pace with the inflation of college expenses.

Roth IRAs

Although generally used for retirement savings, a Roth IRA can be used to pay for the cost of college. Contributions to a Roth IRA are made with after-tax dollars but earnings grow tax-free.

Generally, to withdraw the earnings from an IRA without paying a penalty (or taxes), the account holder needs to be at least 59 ½ years old. However, if you made the first contribution to your Roth IRA at least five years before, you can also withdraw the growth penalty-free for qualified education expenses, including tuition, books, and supplies.

Keep in mind that, while there may not be an early withdrawal fee, the earnings withdrawn may still be subject to income tax.

Other Options to Pay for College

Sometimes saving alone isn’t enough to cover the cost of college. In that case, there are other funding options available that could help students and their families pay for college.

Private Scholarships

Scholarships are essential free money for college because you don’t have to pay them back. Scholarships are typically merit-based and are offered through a variety of organizations and institutions, including nonprofits, corporations, and even directly from universities and colleges. In some cases, scholarships are awarded on the basis of nationality, ethnicity, or economic need. There are a number of searchable databases that compile different scholarship opportunities.

Federal Financial Aid

When you complete the FAFSA each year, you will become eligible for federal financial aid. This can include scholarships, grants, work-study, and federal student loans (which may be subsidized or unsubsidized).

Private Student Loans

If savings and financial aid aren’t enough to cover the full cost of college, you can fill in gaps using private student loans. These are available through private lenders, including banks, credit unions, and online lenders.

Loan limits vary from lender to lender, but you can often get up to the total cost of attendance, which gives you more borrowing power than with the federal government. Interest rates vary depending on the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.

Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.

💡 Quick Tip: Parents and sponsors with strong credit and income may find much lower rates on no-fee private parent student loans than federal parent PLUS loans. Federal PLUS loans also come with an origination fee.

The Takeaway

College tuition can be a daunting expense. Setting up a dedicated account to save for college tuition can help make the process much more manageable. There are accounts, like 529 plans, that are designed specifically to pay for educational expenses.

In addition to savings, students and their families may rely on scholarships, grants, federal student loans, or even private student loans to pay for tuition and other educational expenses.

If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

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