No matter if you’re heading back to a public, private or community college campus for the fall semester, one factor remains the same: paying for college is expensive. For students and families preparing for this semester and for those planning ahead, there are several tips and tools available to help you afford higher education.

Planning for college expenses can be daunting. According to U.S. News & World Report‡, the average cost of tuition and fees for the 2022 – 2023 year was $39,723 at private colleges, $10,423 for in-state residents at public colleges and $22,953 for out-of-state students at state schools. These numbers tend to rise annually. That means anyone hoping to attend college in the coming years needs to prepare for these expenses.

Fortunately, there are a variety of ways to save and pay for college, including investment funds, savings vehicles, loans and scholarships. Many who attend school use a combination of these methods to ensure they are using the strategies that work for them to pay for their education.

Saving and investing: Tips for parents

Time is the most valuable asset for parents who want to save for the educational future of their children. Along with diligent saving over several years, many Americans utilize a 529 plan‡ to stash funds for education. These are state-run investment programs that offer tax-advantaged growth, not unlike a personal retirement account.

The rules and details of 529 plans vary for all 50 U.S. states and you should speak with your financial advisor if you are interested in learning more. The plans are generally separated into two categories:

  • College savings plans: These are the most common type, which allow contributions to grow tax-free and may be withdrawn tax-free as well, provided the money is used to cover education expenses like tuition, room, board, and textbooks.
  • Prepaid plans: These plans are available in only 12 states, but let savers pay some or all future tuition costs in advance over several years. Prepaid plans also lock in the cost of tuition at a public university in that state as soon as they are opened.

There are no restrictions on who can invest in a given state’s college savings plan, although prepaid plans have some requirements. If you are a U.S. citizen, you can contribute to any 529 plan, and use those savings to attend college or pay tuition elsewhere. However, states often offer additional incentives for their residents, like incentives for funds used at local public institutions.

Federal aid and student loans: Tips for parents and students

Saving as much as possible, as early as possible, is never a bad idea where education is concerned. Still, a typical four-year degree from even the most affordable universities can easily total tens of thousands of dollars. To diversify your savings options, some individuals supplement those long-term savings plans or reduce overall costs by applying for grants, scholarships and student loans.

Luckily, a wide array of programs are available to help you or your child find supplemental education funds. A great way to sort through these choices and find the right one for your situation is by completing the Free Application for Federal Student Aid‡ (FAFSA).

Students may complete the FAFSA in the fall before they attend their first semester of college. However, it is recommended that the FAFSA be completed as soon as possible—usually as soon as necessary taxes have been filed in the spring. If you have your materials gathered, it takes between 30 minutes to an hour, and it will use your personal information to create a list of potential financial aid options, including various grants, scholarships, work-study programs and loans. The FAFSA is highly recommended as the first step for any students and their families as they start planning how to pay for college. Just remember; the FAFSA must be completed for each year the student plans to attend college.

Scholarship and grants: Tips for students

Because paying for college is so expensive, you may need to seek alternative financing options even with federal student loans. Scholarships are a great way to alleviate the costs associated with getting a degree. Scholarships fall under the category of merit-based aid, rather than need-based aid that characterizes most grants and subsidized loans.

A huge number of scholarships exist and are awarded by most colleges and universities, as well as private organizations. Scholarships most often are awarded for demonstrated skill or achievement in academic performance, athletics or artistic talent.

To begin a scholarship search, focus first on your personal attributes. In addition to the skills and achievements listed above, scholarships can also apply to people with other special characteristics, based on things like:

  • Race or ethnicity
  • Religion
  • LGBTQ status
  • Having a disability or chronic illness
  • Income level
  • Civic involvement
  • Being a parent

This represents just the tip of the iceberg when it comes to scholarships available. To help refine and narrow your search, start by looking for local organizations that offer scholarships. Even most high schools will extend rewards to certain students in the form of tuition aid. There are also websites specifically for scholarship searches, including the College Board, Cappex.com and Scholly.

Paying for college is an ongoing process

Of course, the search for funding assistance doesn’t need to end with these options or even with the first year. A bit of research online can help you find even more financial aid options. It’s also important to talk with financial aid counselors at the college you plan to attend to learn more about financial aid access and additional tips for paying for college.

It’s not unusual to stress about paying for college, but with a plan of action in place, you can feel confident and prepared when the time comes.

From paying for college to developing savings strategies, learn how to be more financially prepared in the years ahead by exploring the Plan and Invest playlist on the UMB Financial Education Center. Use our college savings calculator to determine how much you should be saving for college on a regular basis.

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