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: 30% –The increase in the number of 529 accounts between 2010 and 20173
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: 48% – Percentage of undergrad student loan borrowers who said they could have borrowed less and still paid for college4
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: 31 minutes - The average time an applicant took to complete the FAFSA in the 2017-2018 application cycle.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: 57% of college students received one or more scholarships in 2018.6
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: 8.86% –The average private student loan interest rate from 2016—2019 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, it will likely be much less than you would pay in interest on a student loan.
Stat: 3% –The amount you may pay in service fees for installment plans8
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 Debt Statistics for 2019,” studentloanhero.com, 2019
2 Non-qualified 529 plan withdrawals may be subject to federal and state taxes and the additional federal 10% tax.
3 “Use of 529 Plans Rising—Along With Revenue Impact,” Pewtrusts.org, 2018
4 “Overborrowing Could Add $119 to a Typical Monthly Student Loan Payment,” Nerdwallet.com, 2017
5 “FAFSA Volume Reports,” U.S. Department of Education, 2018
6 “How America Pays for College in 2018,” Sallie Mae, 2019
7 “US Private Student Loan Debt Market Is Now More than US$100 Billion,” Studyinternational.com, 2019
8 “Pay College Costs Monthly with Tuition Installment Plans,” Savingforcollege.com, 2019
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.