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Life 101: how to pay for college

Tips for planning and paying for college costs.

Life 101: How to Pay for College

A college degree can provide greater lifetime earnings and career opportunities, but paying for college can be difficult. Here's a snapshot of what's in store and ways to pay for higher education costs.

How much does it cost?

Average cost for in-state tuition, fees, and room and board at a four-year college in 2016-2017:

How much do graduates owe?

What's the payoff?

On average, college graduates earn nearly $1 million more over their lifetimes than high school graduates.

Annual earnings for 25- to 34-year-olds with full-time, year-round jobs.

  • Bachelor's or higher degree: $51,980 
  • High school completion: $30,000

How can you pay for it?

529 plans
529 college savings plans are designed to encourage families to save for college. Contributions may qualify for an income tax deduction or credit.

Financial aid
86% of first-time, full-time undergraduate students at four-year institutions receive financial aid.

Fill out the Free Application for Federal Student Aid (FAFSA) and discuss options with your institution’s financial aid office.

Private loans

These loans typically offer both fixed and variable interest rates, but repayment options are less flexible. Read the fine print, including whether repayment levels are tied to income.

Federal loans

These may be cheaper and have more repayment flexibility than private loans. Interest rates are fixed, meaning they won’t change over the life of the loan. There are also options for parents, such as PLUS loans.

Jobs and direct payments

  • Ask your tax planning professional about eligibility for credits or deductions. 
  • 77% of students work at least part of the year while attending college.

How State Farm Can Help This Go Right:

Your State Farm agent can help you understand your options for saving and paying for college.

State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates) is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites hyperlinked from this page. State Farm has no discretion to alter, update, or control the content on the hyperlinked, third party site. Access to third party sites is at the user's own risk, is being provided for informational purposes only and is not a solicitation to buy or sell any of the products which may be referenced on such third party sites.

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