6 tips to help you pay for college

With less debt, you’ll have more money available for other life goals.
Even with tuition on the rise, for most students a college education is worth its price tag—especially if they’re able to take on as little debt as possible by saving for college costs ahead of time.
It’s important to remember that your savings don’t need to cover all of your college costs in order to make a big difference. Any amount you can contribute will help you avoid interest-bearing debt that would otherwise add to the cost of your education and potentially delay life goals, like buying a house, starting a business or saving for retirement.
The average monthly student loan payment is $393,1 but if you set up a college savings plan early and explore opportunities to supplement your savings, you can make it easier for you or your student to pay for college and still tackle life goals after graduating.
Here are six tips for students and parents to keep in mind as they look ahead to college:
1. Save with a 529 college savings plan
529 college savings plans are one of the best ways to pay for college because they allow investments to grow tax-free.2 Find a plan open to residents of your state, and apply online. You can start a 529 plan with a small contribution and invite family and friends to contribute as well. Thanks to compounding, even a small amount saved may grow enough to help you avoid paying thousands of dollars in student loan interest—especially if you (or your parents) start saving early.
Stat: 170% — The increase in assets held in 529 savings plans between December 2010 and December 2020. More than 14.8 million 529 plan accounts existed as of December 2020.3
2. Budget before you borrow
A key contributor to excessive student loan debt is overborrowing. Anticipating realistic college costs can help you borrow only what you need. Budgeting not only helps avoid unnecessary debt, but it also helps with day-to-day money management while at school. Use TIAA’s college savings calculator to determine what your savings goal should be.
Stat: 52% — The percentage of people ages 33–40 with student loan debt who say their loans weren't worth it.4
3. Complete the FAFSA
October 1 marks the first day you can begin filling out the Free Application for Federal Student Aid. The information from this will be used by a number of groups for grant and loan purposes. Many merit-based and private scholarships also require applicants to have filed a FAFSA.
Stat: Less than one hour — The amount of time it typically takes people to fill out and submit the FAFSA.5
4. Search for non-loan options first
Scholarships, grants and work-study programs can help supplement personal savings to help you pay for college and reduce potential student debt. They can be merit- or need-based. Be sure to exhaust your search for non-loan options from private, public and university sources before turning to student loans.
Stat: 63% — The percentage of all undergraduates who receive at least one grant or scholarship.6
5. Compare loan types and interest rates
Research all federal loan options before turning to private loans. Federal loans typically have better terms than private student loans, but if you do need to use private student loans, be sure to compare the interest rates and repayment plans.
Stat: 3.73% — The interest rate for the 2021–22 school year for federal undergraduate loans. Private fixed-rate loans typically range from 3.34%–14.99%.7
6. Consider a tuition installment plan
Trying to figure out how to pay for college without loans? If scholarships or grants can’t cover your tuition, installment plans can allow you to pay it over time rather than take on loans to pay for costs up-front. Although your plan may come with an initial enrollment fee, they typically do not charge interest as long as your total tuition payment is made in full by the end of the academic period.
Stat: $100–$150 — The average enrollment fee for most tuition installment plans.8
Supplementing savings with other funding sources and the right student loans can help you pay for college without breaking the bank. To help determine what your savings goal should be, try TIAA’s easy-to-use college savings calculator
1"A Look at the Shocking Student Loan Debt Statistics for 2021," LendingTree, Jan. 27, 2021.
2Non-qualified 529 plan withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
3529 Plan Data, December 2010 and December 2020. College Savings Plans Network, accessed July 1, 2021.
4"More than half of older millennials with student debt say their loans weren't worth it," CNBC, April 8, 2021.
5"How Long to Fill Out the FAFSA? Here's How to Finish in an Hour or Less," LendingTree, April 14, 2020.
6"How Do People Pay for College?" EducationData.org, April 15, 2021.
7"Current Student Loan Interest Rates and How They Work," NerdWallet, June 2, 2021.
8"Pay College Costs Monthly with Tuition Installment Plans," Saving For College, June 17, 2021.
This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.
Please refer to the Plan Disclosure Book on a state 529 plan’s website prior to investing, for details on risk, tax benefits, charges and expenses, and whether your home state offers tax or other benefits such as financial aid, scholarship funds, or protection from creditors for investing in its own 529 plan. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss. Consult your legal or tax professional for tax advice, including the impact of the federal tax changes. TIAA-CREF Tuition Financing, Inc. (TFI) is the Plan Manager for several state 529 plans, and TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, is the distributor and underwriter for those plans.