Saving and Investing

How To Pay For College Without Loans: Exploring All of Your Options

Learn how you can pay for college without student loan debt, whether you’re an adult looking to help out a child or a student with limited funds.


EarlyBird Team

Last updated:

February 13, 2023

EarlyBird helps parents, family, and friends collectively invest in a child’s financial future. Learn more.

What You'll Learn

People often need at least a bachelor’s degree to even be considered for many jobs nowadays.

That means to land their dream career, most students will need to attend college.

The problem is that the cost of higher education is constantly increasing and student debt can feel crushing when you’re trying to set out on your own as an adult. Nobody wants to be paying off student loan debt for the next 30 years.

So, it can be a struggle to figure out how to pay for college without taking on federal or private loans.

Thankfully, there are things you can do to help pay for college while staying out of debt. There are options — whether you’re a parent looking to help out a child or a student with limited funds.

In this article, we will show you how you can help relieve the burden of paying for college.


How To Pay For Your Loved One’s College

You want to provide the child in your life with as much opportunity as possible. 

The strategies below will help you give the most financial assistance for your situation.

Start saving early

As of 2021, the average cost of college in the U.S. is currently $35,720 per year.

For a four-year degree, that’s nearly $150,000.

The cost of college has also tripled in the past 20 years. To look at it another way, the annual growth rate of college costs is about 6.8% per year on average.

It’s safe to assume that as time passes, the cost of college will increase substantially. The average cost of college in another 15–20 years could be $100,000 or more per year if current trends continue!

That’s why it’s important to start saving as early as possible. 

You want to give your money as much time to grow and earn interest as possible while the child in your life is growing up.

If you’re looking to 100% fund a student’s college education, you’ll need to start saving thousands of dollars per year right from birth.

saving for college account options
(Image Source)

Open an investment account

The best way to start saving for college is by opening a 529 plan, Coverdell ESA, or Roth IRA and contributing to it regularly. Any of these three types of accounts will allow you to use the money tax-free and penalty-free for qualifying education expenses.

It’s also worth opening a custodial account like a UGMA (Uniform Gifts for Minors Act) account for the child in your life as well. 

These accounts don’t offer the same tax benefits when it comes to education expenses. But they do offer the child in your life the flexibility to use the money however they wish. 

They can use the money from a UGMA account to pay for a car, put down a deposit on their first apartment, or even fund a “gap year” trip between high school and college.

For more details on the pros and cons of each of these accounts, check out our existing articles on these topics here:

Best Way To Save For College

Coverdell vs. 529

Roth IRA for College

Additional ways of saving money for college

Here are some more ways that you can save money for college for the child in your life:

  • Make a budget and cut unnecessary expenses to put extra money away for college
  • Set aside a specific amount every month before you spend anything else
  • Invite relatives and other loved ones to contribute
  • Invite the child to help contribute once they’re old enough to earn an income
  • Invest any extra money (work bonus, unexpected windfall)
  • Take on overtime at work or a second part-time job

The more you can save while a child is young, the more time the money will have to grow via compound interest as the child grows up. 

So if you’re able to tighten up your finances for a few years in the beginning, it can really impact the overall growth of the child’s college savings.

Spread your payments out over time

What happens if it’s time for the child in your life to start attending college and you’re coming up short on funds?

Many colleges have payment plans that will allow you to pay college costs in installments.

Instead of having to pay one big lump sum at the beginning of the semester, a tuition installment plan lets you spread the cost out. It’s a good alternative for families who are able to pay equal monthly payments instead of the entire cost all at once.

Installment plans typically cover college tuition, fees, meal plans, and on-campus housing.

Most plans won’t cover the cost of transportation, books, equipment, or school supplies.

Tuition installment plans don’t typically require a credit check. But some schools may charge you an additional service fee for using the plan, as high as 3%.

Other options that can help you pay for college 

Not every family can afford to create a college savings plan for their child. 

In some cases, you may fall short if you weren’t able to save enough. Other times you might not be able to save anything at all. But there are other options to help pay for college.

Help your child fill out the FAFSA. 

The Free Application for Federal Student Aid (FAFSA) is a way to accurately see how much financial aid your child qualifies for. There’s no obligation to take any of the aid or loans that they qualify for, so it’s worth taking the time to fill it out.

FAFSA website home page

Use your retirement savings. 

You can dip into your own personal IRA or Roth IRA to help pay for a child’s college costs. 

Contributions withdrawn for qualified education expenses aren't subject to penalties or taxes. Withdrawing from your 401k isn’t advisable, though, as you’ll always pay a 10% penalty.

Use the equity in your home. 

There are several ways to do this, such as using a new line of credit, a home equity loan (second mortgage), or cash-out refinancing.

Help your loved one apply for late-deadline scholarships. 

Encourage the child in your life to apply for any athletic or merit-based scholarships or grants that they qualify for. 

The competition for some of these funds is lower than you’d expect, and simply filling out the required forms gives your student a great chance at some free funds. 

Factors that make you eligible for scholarships
(Image Source)

Utilize crowdfunding. 

Consider asking other loved ones for support. Grandparents, aunts and uncles, and other family members or friends may be willing to help. Most family members are interested in supporting the children in their life and want to help them succeed.

Minimize college costs. 

Encourage the student in your life to live at home with parents or in an off-campus location while attending school. Staying in an on-campus residence can easily cost as much as (or more than) actual tuition.

Things like cooking at home instead of eating out or using a meal plan at the campus dining hall can also save a significant amount of money.

Choose an affordable school. 

Ask the student in your life to consider enrolling in a community college. It’s a great option for students that are strapped for cash. They can often transfer their credits to a four-year school to finish their degree later on.

Teach the student about financial literacy. 

To get a student on board with saving money and reducing their overall college cost, it’s important to let them know why it’s so important. 

If you start teaching financial literacy early, you can help your loved one build healthy money habits, reduce spending, and stretch the dollars you can contribute. 

Paying too much towards their college education could affect your ability to retire. And if you can’t pay for it yourself, the student probably doesn’t want to be paying off student debt until they’re 50, either.

Apply for a Parent PLUS loan

If you’ve run through all the other options, and you still feel like you’ll need a loan to make ends meet, apply for a federal student loan like the Parent PLUS loan.

The U.S. Department of Education provides federal student loans to parents of a dependent undergraduate student. If you qualify, this program offers loans at a reasonable fixed rate.

While still not ideal, federal student loans have several benefits that private loans don’t offer. 

Private student loans should always be a last resort. 

A private student loan typically comes with higher interest rates or less-favorable terms than any other options discussed, so it should be your last choice.

Federal vs. private undergraduate student loans comparison
(Image Source)

The Parent PLUS loan is a type of federal loan you take out as the parent or guardian. This is slightly different than opting to be a cosigner on a student loan for your child. But, either way, you’ll be responsible for paying the money back if they don’t.

What if your child doesn’t go to college?

You might dream of the child in your life going to college. But the truth is, not every student is pursuing a career or in a life situation that requires attending college.

Parents and other loved ones need to consider this possibility in advance.

Both 529 plans and Coverdell ESAs have options for transferring the account to another beneficiary. Or you can always withdraw the money and pay any associated penalties and taxes — but this is not ideal.

Roth IRAs are more flexible because they’re retirement accounts as opposed to education accounts. You can save the money you would have spent on the child’s college for retirement or use it to pay for the education of any other child in your life.

A custodial account like a UGMA is the most flexible option. 

Since it’s not education-specific, the child in your life can use the funds to pay for anything they need. Instead of going to college, they may choose to use the money to start a business or make a down-payment on their first home instead.

EarlyBird’s investment offerings are great as a supplemental and alternative way to save for the child in your life. Plus, EarlyBird allows your entire family and friend circle to easily contribute toward a child’s future.

How to Pay For College as a Student

Many parents can’t afford to send their children to college. 

If your parents are unable to pay for your college education, you might have to find a way to pay for it on your own.

Here are some ways that students can help pay their own way through college without a private or federal student loan.

Apply for the FAFSA

The Free Application for Federal Student Aid is the easiest way to apply for college or graduate school financial aid.

You could get free money in the form of grants, scholarships, and/or a work-study program.

Look into tuition assistance programs

You may be able to find some alternative sources of tuition assistance besides the FAFSA. 

For example, some employers like Starbucks offer their full-time and part-time employees 100% tuition coverage for a first-time bachelor’s degree through the online program at Arizona State University. 

Your parents’ employers may offer you assistance as well.

Start working

Get a summer job between semesters, take a part-time job during school, or develop a side hustle to help pay for college.

Create a budget and set aside some money every month

If you don’t specifically budget for college, it’s unlikely that you’ll be saving any money for it. 

If you have a part-time job while you’re in high school and can save a few hundred dollars per month, it can help you avoid having to take on private or federal loans. At the very least, it can help you reduce the amount of debt you will need to take on to cover college expenses. 

11 ways to save money in college
(Image Source)

Contact your school’s financial aid office

If you don’t have enough money to cover your expenses, you can contact the financial aid office at your school of choice. 

Depending on your circumstances, you might be able to negotiate more financial aid or appeal your FAFSA award letter, 

The financial aid office staff can help to let you know about all of the options that are available to you.

Develop a College Savings Plan

Family members and students alike need to plan well in advance and decide how they'll pay for college to avoid going into debt.

Opening an education savings account like a 529 plan or Coverdell ESA is a great place to start. But not every family can afford to pay for their student’s entire education with savings. 

It’s important to look at alternative options. These include applying for scholarships and grants, applying for financial aid, crowdfunding from family and friends, and more.

EarlyBird offers the simplest way for parents, family, and friends to collectively invest in the financial future of the children they love.

Download the Earlybird app to get started.


This page contains general information and does not contain financial advice. All investments involve risk. Any hypothetical performance shown is for illustrative purposes only. Actual investment performance may be different for many reasons, including, but not limited to, market fluctuations, time horizon, taxes, and fees. Please consult a qualified financial advisor and/or tax professional for investment guidance.


EarlyBird Team

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Download EarlyBird today and start investing in your child’s tomorrow.
Get started with your first $10 on us, when you create an account today!
Download EarlyBird today and start investing in your child’s tomorrow.
Get started with your first $10 on us, when you create an account today!
Download EarlyBird today and start investing in your child’s tomorrow.
Download EarlyBird today and start investing in your child’s tomorrow.
Download EarlyBird today and start investing in your child’s tomorrow.
Download EarlyBird today and start investing in your child’s tomorrow.
Download EarlyBird today and start investing in your child’s tomorrow.
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