1. Start saving immediately

A 529 college savings account, which offers tax-free earnings growth and tax-free withdrawals for education expenses, is one of the best ways to save for college. Contribute early and often because every deposit counts.

2. Factor in the future

Think about what kind of career you hope to have and then explore specialized options that are available. For example, if you want to become a teacher, there are federal and state education programs that offer scholarships or “Teach Grants,” a loan forgiveness program for those who teach for a certain period of time in specific school districts. 

3. Explore private and federal options

While federal student loans have numerous repayment plan benefits, with generous deferment provisions and forgiveness programs, remember that private student loans may have lower interest rates than federal student loans, depending on your credit history. Review the federal student loan programs, then research your options with private lenders to make an informed decision that is best for you. 

4. Borrow only what you need

Borrow enough to cover your tuition and fees and stop there. Borrowing more than you need is never a good idea, and the financial aid advisors at your university can help you with this.

5. Don’t wait until graduation

Borrowers who take unsubsidized loans to pay for college should pay the interest while enrolled in school. The standard process for unsubsidized loans accrues interest — meaning unpaid interest will be added to the loan principal after graduation — and students end up paying more over the life of the loan with interest on top of interest. The interest on a $4,000 loan is roughly $15 a month. Students who make that small payment while enrolled can start paying off the principal balance, not just the accrued interest, upon graduation. This could save thousands in the end.