Options for Putting Kids Through College Without Savings

by Susan Ranford

How can you put your kids through college if you have no college savings? Here are a few options to consider.

For many parents, paying for their kids’ college education is a source of stress and anxiety. In a perfect world, parents would start saving for college when their baby is born — or even before.
However, life happens, and this isn’t always the case. Or in some cases, parents with multiple children struggle to manage college tuition for every child.

While there is no one easy path to paying for college, many strategies can help you save on college expenses. Creating a financial plan can make saving such a large sum a bit more feasible. Getting started as early as possible will help you reduce stress and give you ample time to explore all potential options to help put your child through college.

Keep reading to learn some of the best tips for parents struggling to put their kids through college. From federal loans to borrowing from your retirement fund, paying for college is possible if you’re thorough and resourceful.

Federal Loans and Aid

Every prospective college student should start by filling out a FAFSA form. FAFSA stands for the Free Application for Federal Student Aid. The FAFSA formula assesses your eligibility using your financial information, including earnings via tax returns, bank statements, investments, and more.

Federal aid can come in the form of federal loans, or in some instances, grants. Based on the FAFSA, you may be eligible for one or more options for federal loans. Some federal loans, such as Parent PLUS loans, are taken out in the parent’s name, while others will fall under the child’s name. It’s a good idea to meet with your child’s school counselor or a financial professional to determine which loan option(s) will be best for you.

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Private Loans

Private loans offer an alternative to federal loans and assistance. In some cases, federal loans might not be enough to cover your child’s college costs. In these instances, private loans can help bridge the gap. Private loans will also use specific financial criteria to assess your eligibility.

Private loans may be available for parents, or you might be able to co-sign your child’s loans. This means you’re both liable to pay back the loan. When searching for private loans, always be sure to thoroughly read the terms and rates, as they can vary depending on the loan source.

Looking for the best private college loan? This resource compares and contrasts some of the most popular private student loans to help you find the best one for you and your child.

Apply for Scholarships

Scholarships are another way to bridge the gap for families struggling to pay for college. The advantage of scholarships is they don’t need to be repaid. Unlike loans, scholarships are “granted” money. Scholarships are available on both need- and merit-based criteria. One common scholarship, known as the Pell grant, offers grants to certain students with the highest financial needs.

Merit-based scholarships are awarded according to GPA or test scores. These competitive applications often require a student essay and documentation of grades, test scores, and even extracurricular activities. As these are competitive, encourage your child to start applying early to get a jump start on the lengthy application process. Some college scholarships take applications from students as early as their junior year of high school, so get started early!

If your child’s grades are not at the top, don’t fret. Many other scholarships are not based on academic criteria. These might be based on creativity, skills, marginalized group membership, or specific niches. Many online tools are available to help search for the best unique college scholarships.

Other Ways to Pay for College

If possible, starting college savings early for your child is the best plan. Creating a 529 Savings Plan can help you stash away money each year as your child grows up. Some 529 plans even allow friends and family to gift money to this plan. Fortunately, 529 plans allow money to be taken out for college and college-related expenses without being taxed.

While not ideal, some prospective college students understand that their college education is their responsibility. As such, encourage your child to save money via a part-time or summer job.

Another alternative, while less common, may include using your retirement savings. While not the best solution, some parents are left in a difficult spot when it comes time to pay for their child’s education.

If you have lots of money built up in your retirement plan, you may be able to use this money to help pay for your child’s tuition. The rules of IRA accounts may vary, however, depending on the parent’s age. So, this is another area where meeting with a financial professional can be helpful.