Looking beyond your 529 plan account: 3 sources for college money

Even if you've diligently saved in a 529 plan account since your child or grandchild was born—or even before—chances are you may still come up a bit short when paying for all of his or her college expenses. Fortunately, there are a number of other sources of money to help you cover your higher-education costs.

Federal financial aid

The Office of Federal Student Aid, part of the U.S. Department of Education, offers approximately $150 billion annually in grants, loans, and work-study funds. This type of financial aid is "need based," which means that the amount of aid you're eligible for is determined by your family's income and assets. You need to complete and submit the Free Application for Federal Student Aid (FAFSA) to be considered for any federal student aid program as well as many state-sponsored programs. Lots of schools also use the FAFSA to decide how much, if any, financial aid they'll give you. So, even if you don't think your family will qualify for federal aid, you should still fill out the FAFSA.

Although deadlines and requirements can differ by program, state, and institution, you can start applying for federal student aid for the next school year after January 1 of the current year. To learn more, go to fafsa.ed.gov.


Scholarships for various amounts are awarded by schools, community organizations, corporations, and other sponsors. Depending on the specific scholarship, your child may qualify based on academic achievement, athletic ability, field of study, or membership in a particular organization. Hundreds of thousands of scholarships are awarded each year, so it's worth taking the time to find out if there's one (or more) for which your child might qualify.

To get more information on available scholarships, go to bigfuture.collegeboard.org. You can also do a free search on Fastweb, which will match your child's background to some 1.5 million scholarships worth more than $3 billion.


When you've explored the money available from sources that don't require repayment, such as grants and scholarships, you may still come up a little short. That's where loans come in. In 2014, 15% of the money used to pay for college was borrowed by students and another 7% was borrowed by parents.*

There are different types of loans available to pay for college. Federal loans, which you apply for with the FAFSA, usually offer low interest rates and often don't require repayment until after the student graduates. Private loans, which are available through banks, credit unions, and other lending institutions, can have higher interest rates and terms that often aren't as generous. You can use this handy Loan Comparison Calculator to compare any three loan programs to see which ones meet your needs.

Even if your child still has a year or two before college, you can start your research now. Use our College Savings Planner to estimate what you'll have in your 529 account. You can also use the Expected Family Contribution Calculator to determine the amount that your family would be expected to pay for college. The total cost of college minus the expected family contribution (EFC) equals your financial need.

And remember—saving more in your 529 plan account now means that you'll need less financial aid later on.

*Source: How America Pays for College 2014: Sallie Mae's National Study of College Students and Parents. Sallie Mae and Ipsos Public Affairs.