Even with the rising costs of college, there are still many ways to fund your own or your teen’s higher education dreams. All you need is the right information.
This guide can help you understand your options for grants and scholarships, 529 savings plans, federal loans, and private loans to create a payment plan that works for your family.
Grants and scholarships: Start with free money
Grant and/or scholarship money is a gift awarded to students that meet the eligibility and requirement terms. You do not have to pay this money back.
Grants are based on financial need
- Submit the Free Application for Federal Student Aid (FAFSA®) form as early as possible to qualify for federal, state, and school grants. FAFSA opens on October 1 each year, and many are first-come, first-served.
- Some Maryland and institutional grants may ask for additional forms. Always check the deadlines and requirements for each grant.
Scholarships are based on merit or interests
- Scholarships are offered by nonprofits, businesses, religious groups, and community organizations.
- Each application is different and may require transcripts, a personal statement, a letter of recommendation, or a resume.
- Encourage your teen to apply early and often using these sites:
529 plans: Grow your savings tax-free
529 plans offer tax-free growth and withdrawals for education expenses and can be valuable tools for your student’s education.
Families can contribute, take advantage of state tax benefits, and use the funds for a variety of education costs.
- College tuition, vocational schools, and graduate programs
- Room and board, books, and supplies
- Registered apprenticeships
- Student loan repayment (up to $10,000)
How 529 plans work
- Open a plan with just $25.
- Choose between:
- Enrollment-based portfolios that are professionally managed and based on your student’s college start date.
- Fixed portfolios that allow you to choose a mix of investments and adjust them twice per year.
If your teen’s plans change, you can transfer the account to a sibling or even roll it into a Roth IRA down the line.
Federal vs. private loans: Understand the difference
Once you’ve considered grants, scholarships, and savings, you may need to explore loans to help cover any remaining college costs.
Start with federal loans. They are funded by the government and are based on FAFSA results. They offer fixed interest rates and flexible repayment options., You may even qualify for loan forgiveness in certain careers.
These types of loans do not require a credit check or cosigner for undergraduate students.
Fill any remaining gaps with private loans offered by credit unions (like SECU), banks and other financial institutions. These loans are based on the applicant’s creditworthiness and may require a cosigner.
Private loan terms vary by lender, so it’s important to compare interest rates, fees, and repayment options.
How SECU can help
Explore your options, see how much college might cost, do a budget checkup, and talk with your teen. You’re not alone. If you’re looking for scholarship opportunities or need a trusted partner for student loans, we’re here to help.
- Our MD Foundation scholarships are available each year to help Maryland students take the next step in their educational journey and support their long-term financial well-being.
- Our student loans offer competitive rates, flexible repayment, refinance options, and no origination fees.
