How to Pay for College in 2021

COVID-19 has created a lot of uncertainty around the college experience, including whether or not parents will be able to pay for their children’s tuition and expenses amid the pandemic.

Whether your family’s income has been impacted by the pandemic, or you just want to have more money to allocate to other life priorities, here are some recommendations from Northwestern Mutual to help you pay for that college education.


FAFSA (Free Application for Federal Student Aid) starts on October 1 for the 2022 to 2023 school year. Whether you have a high school senior or a current college student, it’s important to fill one out — even if you don’t believe you qualify for financial aid or you never filled one out in the past. Filing out the FAFSA is the only way a college even knows you’re looking for financial help, and financial aid offices use this information to see if you qualify for grants, scholarships and loans.

Also, you must fill out the FAFSA in order to apply for any subsidized or unsubsidized federal student loans. Students that demonstrate need can apply for subsidized federal student loans, but even students that don’t demonstrate need can apply for unsubsidized loans.  If you’re a parent thinking of borrowing through the Direct PLUS loan program to help pay for education expenses not covered by other financial aid, your family must also still fill out the FAFSA.


Many people believe that the amount they receive in financial aid cannot be negotiated. However, this year especially, many families are grappling with the fact that the FAFSA information that determined their eligibility for aid is no longer relevant because their income and assets may have changed substantially.

Many colleges have a formalized appeal process for parents to request a modified need-based financial aid package.

“Even if you’ve already received a financial aid package, you can appeal for either more or modified need-based financial aid packages and scholarships, and merit-based financial aid.” said Ryan Chang, Northwestern Mutual Financial Representative. “The appeal letter should be short but explain why additional financial aid is needed, for example if you’ve had a job or income loss due to COVID-19. Provide detailed numbers if you can.”

Also keep in mind that, under the Higher Education Emergency Relief Fund (HEERF) authorized by the American Rescue Plan, many colleges receive special federal relief funds to help students cover expenses caused by the disruption of campus operations related to COVID-19 (such as unexpected food or housing costs). Current college students can apply for this funding through their school.


Applying for college scholarships can be time consuming, but it has the potential to pay off. Some scholarships may even be awarded mid-year, so it never hurts to look for both need-based and merit-based scholarships, even after the school year has started.

In addition to applying for scholarships offered by the colleges and universities themselves, look into employer-based scholarships, government scholarships and private scholarships. “Many corporations offer scholarships or tuition reimbursement opportunities that employees can apply to for their children, said Chang. “Many scholarships are also offered by heritage groups, trade organizations and local community groups, which you can discover online by searching Fastweb.”


Federal loans offer more flexibility than private loans when it comes to payment plans and deferment or forbearance options. But private loans can be an option if you’re not eligible to apply for federal loans, or you’ve already reached the maximum on how much you can borrow from the government.

Your child can apply for private student loans by filling out applications directly with private lenders, although it’s likely you as the parents will have to co-sign.  Co-signing a loan for your child makes you liable for any amount that your child is unable to repay, so make sure to understand the risks to your own credit before you agree to do so.

You may also be looking for other ways to access cash to help cover educational costs for your child, such as taking out a home equity loan or a personal loan. If you have permanent life insurance, you could access your cash value to help cover college tuition1.

What’s right for your family will depend on your financial situation, A financial advisor can help you think through the pros and cons of each option before you decide what to do.


Especially if your college student isn’t going to be on campus for the foreseeable future, it may make sense for him or her to earn course credits at a less expensive community college or in-state school for the time being.  For students, this is a cost-effective way they can accumulate college credits, especially if they don’t know what field they would like to major in. When their goals are clearer, they can transfer to a four-year institution and make the most of that opportunity with credits in hand.

Before embarking on such a plan, though, make sure to check that the credits your student earn are transferable to the college or university he or she is contemplating continuing his or her education with, to avoid losing time and money spent on credits that are nontransferable.


1Utilizing the cash value through policy loans, surrenders, or cash withdrawals will reduce the death benefit; and may necessitate greater outlay than anticipated and/or result in an unexpected taxable event. Assumes a non-Modified Endowment Contract (MEC).

About Northwestern Mutual
Northwestern Mutual has been helping people and businesses achieve financial security for more than 160 years. Through a holistic planning approach, Northwestern Mutual combines the expertise of its financial professionals with a personalized digital experience and industry-leading products to help its clients plan for what’s most important. With $308.8 billion in total assets, $31.1 billion in revenues, and $2 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than 4.75 million people with life, disability income and long-term care insurance, annuities, and brokerage and advisory services. The company manages more than $200 billion of investments owned by its clients and held or managed through its wealth management and investment services businesses. Northwestern Mutual ranks 90 on the 2021 FORTUNE 500 and is recognized by FORTUNE® as one of the “World’s Most Admired” life insurance companies in 2021. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, WI (life and disability insurance, annuities, and life insurance with long-term care benefits) and its subsidiaries. Subsidiaries include Northwestern Mutual Investment Services, LLC (NMIS) (investment brokerage services), broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company® (NMWMC) (investment advisory and services), federal savings bank; and Northwestern Long Term Care Insurance Company (NLTC) (long-term care insurance

All insurance policies and contracts issued by Northwestern Mutual are available only in English. This document is for informational purposes only and does not necessarily reflect the content of the policies and/or contracts. The English language version of this document is the official version and shall control in the event of a dispute.
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