Paying for college is one of the most significant financial decisions you and your family may make. Tuition, room and board, textbooks, and fees add up quickly, but the good news is that you don’t have to navigate it alone.
From free money to borrowed funds, there are several ways to cover the cost of higher education. Understanding your options before committing to a school or a loan can save you thousands of dollars over time. Here is a look at your main options and how to approach them.
Federal Financial Aid
The first step for most students and families is completing the Free Application for Federal Student Aid, also known as the FAFSA. Submitted each academic year, the FAFSA determines your eligibility for federal grants, work-study programs, and student loans. Your school’s financial aid office uses it to build a personalized award package.
Filing early matters. Some aid is awarded on a first-come, first-served basis, so submitting your FAFSA early, even as soon as it opens — typically Oct. 1 each year — gives you the best chance at the most aid possible. If your financial situation changes significantly during the year, contact your school’s financial aid office to request a professional judgment review and potentially adjust your award.
Scholarships and Grants
Scholarships and grants are often called “gift aid” because, unlike loans, they don’t have to be repaid. They can come from your school, state agencies, nonprofits, and private organizations.
Federal Pell Grants are available to undergraduate students with exceptional financial need and can provide up to $7,395 per year for the 2025-26 academic year. Beyond federal aid, thousands of scholarships exist based on academic merit, community involvement, background, career interests, and more. Searching early and applying to as many awards as possible increases your chances of receiving one.
First-generation college students, in particular, have access to a range of dedicated scholarships and awards. To explore award opportunities, use tools like the College Board’s Scholarship Search or FastWeb. You can also check with your state’s education agency for resident grants and scholarships.
Student Loans
When scholarships, grants, and other aid don’t cover the full cost of attendance, student loans can bridge the gap. Your options include federal and private student loans, and there are separate programs for parents. Here’s a quick overview for each.
Federal Student Loans
Federal student loans are issued by the U.S. Department of Education and generally offer benefits that private loans do not, such as income-driven repayment plans and access to forgiveness programs.
Most federal loans don’t require a credit check, and repayment doesn’t typically begin until after you graduate or drop below half-time enrollment. Because of these protections, borrowing federal loans before private options is generally recommended.
Remember, to borrow federal loans, you must complete the FAFSA each year.
Private Student Loans
Private student loans are offered by banks, credit unions, and other lenders. They can fill the gap when federal aid falls short, though they typically require a credit check and may carry variable interest rates. Terms vary by lender, so it is important to compare options carefully before borrowing.
Borrowers with limited or no credit history may need a cosigner to qualify or to secure a better rate.
Learn More: How Do Student Loans Work for College?
Parent Loans
Parents who want to help fund their child’s education have options, too. Federal Parent PLUS Loans are available to parents of dependent undergraduate students, while private parent loans are offered by select lenders like ELFI.
Both have their own eligibility requirements, interest rates, and repayment terms. Compare private student loans and Parent PLUS Loans to find the better fit for your family. If a parent or student needs a cosigner to qualify for a private loan, it is worth understanding how cosigners and cosigner release work before signing.
Putting It All Together
Most students use a combination of financial aid, scholarships, and loans to pay for college. The general rule is to exhaust free money first (grants and scholarships), then turn to federal loans before considering private options. No single approach works for every family, though; the right mix depends on your situation.
Starting early, staying organized, and understanding your options puts you in the best position to make smart, informed decisions about financing your education. And when you’re ready to explore your private student loan options, see how ELFI student loans can help bring your future into focus.
