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How to Find the Right 529 Savings Plan for You

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

It is never too early to think about saving for college, and a 529 savings plan can help you do just that.

No other savings or investment account offers the tax breaks that a 529 college savings plan offers, which means that every dollar you contribute can cover a greater share of college costs. That’s especially helpful considering the average net price of a private nonprofit university came in at $26,740 for the 2017-18 school year, and the cost of college is on the rise.

But with almost every state offering a 529 savings plan, and with many offering more than one, it can be challenging to figure out which plan is right for you.

If you’re already well-versed in this savings tool, you can see our roundup of the best options here:

The truth is that contributing to a 529 savings plan isn’t always the right move. You may be better off using a different college savings account or even focusing on other financial responsibilities first.

This guide will help you sort through all of that. You’ll learn what a 529 college savings plan is, how it works, how to choose the right plan for you and alternatives you should consider.

What is a 529 college savings plan and how does it work?

A 529 college savings plan is an investment account that offers a number of tax breaks when the money is used for qualified education expenses:

  • Contributions are made after taxes, though there are a number of states that allow either a deduction or a credit for state income tax purposes.
  • Your money grows tax-free while it is in the account.
  • Money can be withdrawn tax-free for qualified education expenses, which typically includes tuition at any eligible school from elementary onward, as well as fees, books and room and board at an eligible higher education institution. If you withdraw the money for any other type of expense, the earnings will be taxed and subject to a 10% penalty.

529 savings plans offer a preselected set of mutual funds and your account balance will rise and fall based on your contributions and the performance of your chosen investments. Most 529 savings plans also offer age-based investments that provide an all-in-one portfolio and automatically become more conservative as your child approaches college.

529 savings plans are administered by states, with every state except for Wyoming offering at least one plan. However, you do not have to use your home state’s plan, and in some cases, you may be better off going elsewhere.

Regardless of which 529 savings plan you choose, you can withdraw the money tax-free for expenses incurred at any eligible school in any state, and even for certain international schools.

Anyone can open a 529 savings plan and name anyone else, including himself, as the beneficiary. You can also change the beneficiary later on, as long as the new beneficiary is related to the old beneficiary.

In short, 529 savings plans allow you to save and invest for future education expenses in a tax-advantaged way.

Prepaid tuition plans vs. savings plans

In addition to 529 savings plans, some states also offer prepaid tuition plans that may be advantageous in certain situations.

Prepaid tuition plans allow you to buy units that each typically cover 1% of one year’s worth of college tuition at a public, in-state university. This essentially allows you to lock in the current cost of college, protecting you against the risk that tuition costs will continue to rise.

“The huge part of a prepaid tuition plan is that it’s guaranteed,” said Angie Furubotten-LaRosee, fee-only CFP and founder of Avea Financial Planning. “With a traditional 529 plan you have to worry about market fluctuations, and with these you don’t.”

There are downsides, though. The biggest of which is that while you can usually get your money back if your child wants to go to a private college or go out of state, the return is typically much smaller than what you would get from attending an in-state public school.

This is in contrast to a 529 savings plan, which allows you to use the money you’ve earned at any eligible institution.

“Prepaid plans are ideal for parents who have a good idea of where their child will attend college and who are willing to give up investment flexibility to lock in those costs,” said Kathleen Boyd, CFP and wealth adviser at Navigoe. “However, if you’re uncertain about your child’s future college plans, then a 529 savings plan may be the ideal option.”

Benefits of a 529 savings plan

1. Tax breaks

The tax breaks are the main advantage of 529 savings plans over other savings and investments accounts.

The growth and the ability to withdraw the money all tax-free for qualified education expenses mean that every dollar you contribute can multiply faster and cover a greater portion of your education expenses.

And if you live in one of the states that offers a state income tax break for contributions, you can potentially afford to make a bigger contribution without affecting your monthly budget, allowing you to get an even bigger head start.

“If you are in a state that offers good benefits, and some states even offer matching funds, it really is the right choice at that point because you aren’t going to get those benefits from any other option,” said Nannette Kamien, CFP and principal of Inspiration Financial Planning, a fee-only financial planning firm with expertise in helping families prepare for college financially.

2. High contribution limits

If you’d like to save a lot of money for education, a 529 savings plan will allow you to do it.

There is no annual contribution limit, though contributions are subject to gift tax rules, which means that you can effectively contribute $15,000 per year, per child, without exceeding the 2018 gift tax exemption. That limit is applied per donor, meaning that parents can combine their limits to contribute up to $30,000 per year, per child.

The tax code also allows you spread excess contributions over a 5-year period, meaning that as a couple, you could potentially contribute up to $150,000 in a single year without any gift tax consequences.

Most 529 savings plans do have lifetime contribution limits, but those limits are very high. For example, New York allows you to contribute up to $520,000 to any single beneficiary, and Utah allows up to $446,000 per beneficiary.

Additionally, there are no income restrictions on contributions, so anyone can take advantage of a 529 savings plan no matter how much money you make.

3. Mindset and accountability

One of the biggest benefits of contributing to a 529 plan is that it establishes saving for college as a real goal with progress that can be tracked along the way.

“Just having the 529 plan in and of itself solidifies that it’s an important priority for you and your family,” said Furubotten-LaRosee. “It’s now a budget item, it’s identified as money that’s earmarked for college, and I think that setting that habit is half the battle for a lot of people.”

4. Potential for long-term returns

By offering mutual funds that are invested in the stock and bond markets, 529 savings plans allow you to participate in the long-term, compounding returns that those investments offer. This can be especially powerful if you start when your child is young.

“Families who can invest over the long term are prime candidates for 529s,” said Boyd. “The earlier you start, the more time you have to take advantage of compound returns the markets provide over time.”

5. Low impact on financial aid

Many people are hesitant to save for college because of the potential impact on financial aid, but 529 savings plans have a relatively low impact.

As long as the account is held in a parent’s name, only up to 5.64% of the money in a 529 savings plan will be counted on the FAFSA. For example, if you have $100,000 in your 529 savings plan, only $5,640 will be considered for financial aid purposes.

In other words, there’s very little penalty for having money in a 529 savings plan. And the benefits of saving the money ahead of time will almost always outweigh any small decrease in financial aid.

6. Ability to change beneficiaries

529 savings plans allow a reasonable amount of flexibility when it comes to changing the beneficiary of the funds.

You are allowed to change the beneficiary as often as you like, and the only restriction is that the new beneficiary must be a family member of the old beneficiary. For the purposes of 529 plans, “family members” include siblings and stepsiblings, children, stepchildren, and grandchildren, parents, grandparents, nieces, nephews, first cousins and even in-laws.

All of which means that if the money isn’t needed for the original beneficiary, you can simply use it for another family member.

Pitfalls of 529 savings plans

1. Taxes and penalties if not used for education

The biggest downside to using a 529 savings plan is that if you withdraw money for anything other than qualified education expenses, the earnings will be subject to taxes and a 10% penalty.

This is one reason to be careful about over-contributing, and also to not contribute money that may be needed for other financial goals.

“That’s where that overarching financial plan comes into play,” said Furubotten-LaRosee. “You can always use other vehicles, like a Roth IRA, that come with more flexibility.”

2. Investment options can be narrow and confusing

Each 529 plan offers its own preselected set of investment options, and those options vary widely in terms of what they invest in and how much they cost. Sorting through all of those options and making the best choices for your needs can be difficult.

“Sometimes I see that parents are afraid to really invest the money and they don’t understand what the different investment options mean,” said Kamien. “Sometimes they get stuck in investments that are higher cost, and that really eats into the earnings that they could have gotten.”

Kamien said that she encourages people to look for “age-based index” options. These funds provide an all-in-one portfolio that automatically gets more conservative as your child approaches college, and they build the portfolio with index funds, which are generally low cost and have been shown to outperform actively managed funds the majority of the time.

3. Other financial responsibilities may be more important

While saving for college is a great goal, it’s often a good idea to handle other financial responsibilities first. This is especially important to consider before contributing money to a 529 savings plan because of the taxes and penalties on nonqualified withdrawals.

“I certainly would caution a parent or grandparent against sacrificing their own financial goals like saving for an emergency fund, paying off debt or retirement plans to contribute to a 529 plan,” said Boyd. “Saving for education is very important, but it’s also a luxury and a privilege for your children, and it shouldn’t come above your own financial security.”

How to compare 529 savings plans

When it comes to choosing a 529 savings plan, start by looking at the potential tax breaks offered by your home state’s plan, said Fred Amrein, a college funding expert and the founder of EFC Plus.

“You need to understand your in-state plan first, and if the beneficiary is in another state you need to understand their state’s plan next,” Amrein said. “In some cases, it may be more beneficial to gift the money to the beneficiary or the beneficiary’s parents and let them contribute the money.”

Even if your state does offer tax breaks, it’s not a given that your home state’s plan is the best option. There are a few more major variables you should consider as you compare 529 savings plans.

Here are the criteria we used to construct our list of best 529 plans.

Out of state

We evaluated each 529 savings plan from the perspective of an out-of-state resident. That means that state income tax breaks were not considered and that any 529 plans that are unavailable to out-of-state residents were ruled out.

Fees

Research has shown that cost is the best predictor of future investment performance, with lower costs leading to better returns. For that reason, we preferred 529 plans that minimized both investment and administrative fees.

We also filtered out adviser-selling 529 plans, which are specifically designed to be sold and managed by financial advisers and have higher fees in the form of commissions and management fees. Given that financial advisers can also advise on 529 plans that are sold directly to the consumer, and therefore cost less, we limited our search to those direct-sold plans.

Investment options

Investment portfolios built with index funds have been shown to outperform actively managed portfolios 80%-90% of the time, and we therefore only included 529 savings plans that offer index funds.

We also limited our list to 529 savings plans that offer age-based portfolios constructed with index funds, since these all-in-one portfolios simplify the investment process and automatically decrease your investment risk as your child nears college age.

Finally, we preferred 529 savings plans that offered access to individual index funds that allow investors to build custom portfolios if they so choose.

Minimum investment

Finding room in your budget for college savings can be difficult, so we did not consider any 529 savings plan that required a significant minimum investment.

None of the plans listed below require more than a $50 initial investment.

Other features

While most 529 savings plans offer most of the same basic features, we did consider additional features offered by certain plans that may be helpful for some investors.

The nine best 529 savings plans

Fidelity Arizona College Savings Plan

Arizona’s College Savings
Arizona’s College Savings Plan is managed by Fidelity, just like Delaware, Massachusetts and New Hampshire, which also appear on this list. Each of these states offers essentially the same plan.The index funds are high quality and low cost, and there are no other significant fees, though the presence of higher-cost actively managed funds could lead some people to pay more than they have to.

  • Investment options: Age-based portfolios constructed with Fidelity index funds, as well as access to individual Fidelity index funds if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.13%-0.16% per year. Individual index funds range from 0.13%-0.18% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $50 otherwise.
  • Other features: None of note.
  • Website: https://www.fidelity.com/go/529-arizona/overview

California ScholarShare 529

ScholarShare 529
Managed by TIAA-CREF, California offers a selection of both index funds and actively managed funds. The lineup of passive age-based funds and individual index funds is strong.
  • Investment options: Age-based portfolios constructed with TIAA-CREF index funds, as well as access to individual TIAA-CREF index funds, if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.11%-0.17% per year. Individual index funds range from 0.08%-0.20% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $25 otherwise.
  • Other features: None of note.
  • Website: https://www.scholarshare529.com

Delaware College Investment Plan

Delaware College Investment Plan

Delaware’s College Investment Plan is managed by Fidelity, just like Arizona, Massachusetts and New Hampshire. These states offer essentially the same plan.

The index funds are high-quality and low-cost and there are no other significant fees. The plan does offer higher cost actively managed funds, which could lead some people to pay more than they have to.

  • Investment options: Age-based portfolios constructed with Fidelity index funds, as well as access to individual Fidelity index funds if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.13%-0.16% per year. Individual index funds range from 0.13%-0.18% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $50 otherwise.
  • Other features: None of note.
  • Website: https://www.fidelity.com/go/529-delaware/overview

Illinois Bright Start Direct-Sold College Savings Program

Illinois Bright Start Direct-Sold College Savings Program
The index age-based funds use Vanguard mutual funds with some of the lowest fees offered by any 529 savings plan. Even the higher-cost “multi-firm” age-based funds cost less than most actively managed funds offered by other plans.

  • Investment options: Age-based portfolios constructed with Vanguard index funds, as well as access to individual Vanguard index funds and DFA funds — a highly respected group of mutual funds that are typically only available through financial advisers — if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.12%-0.15% per year. Individual Vanguard index funds range from 0.10%-0.18% per year. There are no account maintenance fees.
  • Minimum initial investment: None
  • Other features: None of note.
  • Website: https://www.brightstartsavings.com

College Savings Iowa

College Savings Iowa
Every investment offered within Iowa’s 529 savings plan is managed by Vanguard and costs just 0.20% per year. And with a strong lineup of both age-based portfolios and individual mutual funds, you have plenty of room to personalize your investment plan.

  • Investment options: Age-based portfolios constructed with Vanguard index funds, as well as access to individual Vanguard index funds if you’d like to customize your portfolio.
  • Fees: Every investment option costs 0.20% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $25 otherwise.
  • Other features: None of note.
  • Website: https://www.collegesavingsiowa.com

Massachusetts U.Fund College Investing Plan

Massachusetts U.Fund College Investing Plan
Massachusetts U.Fund College Investing Plan is managed by Fidelity. The plan is essentially the same as Arizona’s, Delaware’s and New Hampshire’s.

It offers high-quality, low-cost index funds with no other significant fees, though the presence of higher cost actively-managed funds could lead some people to pay more than they have to.

  • Investment options: Age-based portfolios constructed with Fidelity index funds, as well as access to individual Fidelity index funds if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.13%-0.16% per year. Individual index funds range from 0.13%-0.18% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $50 otherwise.
  • Other features: None of note.
  • Website: https://www.fidelity.com/529-plans/massachusetts

New Hampshire UNIQUE College Investing Plan

New Hampshire UNIQUE College Investing Plan
New Hampshire’s UNIQUE College Investing Plan is managed by Fidelity, just like Arizona, Delaware and Massachusetts. Each of these states’ plans are on this list and are basically the same.

New Hampshire’s plan offers high-quality, low-cost index funds with no other significant fees. However, the plan offers higher cost actively-managed funds, which could lead some people to pay more than they have to.

  • Investment options: Age-based portfolios constructed with Fidelity index funds, as well as access to individual Fidelity index funds if you’d like to customize your portfolio.
  • Fees: Age-based index funds range from 0.13%-0.16% per year. Individual index funds range from 0.13%-0.18% per year. There are no account maintenance fees.
  • Minimum initial investment: $15 with enrollment in automatic contributions. $50 otherwise.
  • Other features: None of note.
  • Website: https://www.fidelity.com/529-plans/new-hampshire

New York’s 529 College Savings Program

New York’s 529 College Savings Program
Like Iowa, New York’s 529 College Savings Program offers only Vanguard index funds and index age-based funds, and in this case, the cost of each fund is even lower at 0.15% per year.

If your priority is minimizing fees and accessing Vanguard funds, this is likely the plan for you.

  • Investment options: Age-based portfolios constructed with Vanguard index funds, as well as access to individual Vanguard index funds if you’d like to customize your portfolio.
  • Fees: Every investment option costs 0.15% per year. There are no account maintenance fees.
  • Minimum initial investment: $0.
  • Other features: None of note.
  • Website: https://www.nysaves.org

Utah my529

Utah my529

Utah’s my529 offers possibly the most noteworthy set of features of any 529 savings plan:

  1. You can create your own age-based portfolio from the underlying funds offered by the plan, which include Vanguard index funds as well as DFA funds that are typically only offered by financial advisers.
  2. If you are working with a financial adviser, you can give him or her access to your 529 plan in order to manage your investments.

The fees are slightly higher than the other 529 savings plans listed here — though they are still very low — but the investment capabilities are second to none.

  • Investment options: A wide variety of age-based portfolios, Vanguard index funds and DFA funds.
  • Fees: Age-based index funds range from 0.169%-0.202% per year. Vanguard individual index funds range from 0.22%-0.40% per year and DFA funds range from 0.37%-0.72% per year. There are no account maintenance fees.
  • Minimum initial investment: $0.
  • Other features: Customized age-based portfolios and financial adviser access.
  • Website: https://my529.org

How to enroll in a 529 savings plan

Once you know which 529 savings plan you want to use, it’s time to open an account and make your first contribution. And while every plan will have a slightly different process, there are a few steps that are likely to be similar across the board:

  1. Have the necessary information ready for the account owner:
    1. Social Security number
    2. Birth date
    3. Mailing address
    4. Physical address
    5. Bank account number and routing number for making contributions
  2. Have the necessary information ready for the beneficiary
    1. Social Security number
    2. Birth date
    3. Mailing address
    4. Physical address
  3. Read the program description, which can be found on the 529 plan’s website
  4. Choose an investment strategy. You can review the options on the 529 plan’s website and in the program description.
  5. Start the application process online or submit the appropriate paperwork.

How to use 529 plans to pay for K-12 private education

The recently passed Tax Cuts and Jobs Act expanded the flexibility of 529 savings plans by allowing investors to withdraw up to $10,000 per year, per child tax-free and penalty-free for tuition for elementary or secondary school.

This opens up more opportunities for parents to use 529 funds for their child’s education. But given how new the law is, it’s a good idea to proceed carefully.

According to Amrein, the tax implications of withdrawing 529 money for K-12 tuition are straightforward on the federal side but are yet to be determined on the state side.

“What a lot of states are dealing with is a lot of them had incentive programs for college contributions,” said Amrein. “What I’m hearing is some of the states are either going to withdraw that incentive or, if you use it for K-12 expenses, there may be a clawback provision that they can rescind that tax break you received for previous contributions.”

If you live in a state that offers tax breaks for 529 plan contributions, and if you’ve taken advantage of those tax breaks, you may want to speak to an accountant before using your 529 funds for K-12 tuition.

Alternatives to 529 savings plans

While the tax breaks offered by a 529 savings plan are hard to beat if you’re saving money specifically for education, there are a number of other savings and investment accounts that can be more advantageous, depending on the specifics of your situation.

Here are some of the major alternatives to consider.

Roth IRA

While Roth IRAs are technically retirement accounts, they have a few characteristics that make them attractive college savings accounts:

  • They offer tax-deferred growth while the money is inside the account.
  • You can withdraw up to the amount you’ve contributed at any time and for any reason without tax or penalty.
  • Early withdrawals of Roth IRA earnings used for higher education are taxed but are not subject to the typical 10% penalty.
  • If you don’t need the money for college, you can keep it in the Roth IRA and use it tax-free for retirement.

“I’m a big proponent of incorporating a Roth into college planning, especially when you have a teenager who is hopefully earning money,” said Furubotten-LaRosee. “Starting the savings habit is a biggie, and if you don’t use it for college it’s available for retirement or any other goal.”

The big downsides are that Roth IRAs are not as tax-efficient as 529 savings plans when used for college and that by dedicating your Roth IRA for college savings, you’re using up valuable retirement space.

Still, the flexibility is often worth it.

Taxable investment account

A regular, taxable investment account doesn’t offer any tax advantages, but it does provide maximum flexibility to invest in whatever you’d like and to use the money at any time and for any reason.

“As a parent, sometimes you need flexibility with your money,” said Furubotten-LaRosee. “You need the ability to control things as life progresses, and not having it tied into a 529 plan means you can access it when you need to.”

Coverdell ESA

The primary benefit of a Coverdell Education Savings Account (ESA) used to be the ability to allocate the money for K-12 expenses, but that benefit is much less relevant now that 529 savings plans can also be used for the same purpose.

Coverdell ESAs also come with stricter contribution limits than 529 savings plans. Contributions are limited to $2,000 per year, per child across all contributors. Once your Modified AGI (adjusted gross income with certain deductions like student loan interest added back) exceeds $110,000 for individuals or $220,000 for married couples filing jointly, you can no longer contribute.

According to Amrein, the main benefit of a Coverdell ESA at this point is the ability to choose from a much wider range of investment options than you can get from a 529 plan.

“It’s kind of like comparing a 401(k) to an IRA,” said Amrein. “Most 529 plans are very restrictive, with maybe five to 10 investment options to choose from. On the Coverdell side, you can invest in anything you want, but you’re limited to $2,000 per year.”

Savings account

While a savings account can’t offer the long-term returns that you might get from a 529 savings plan, Roth IRA or Coverdell ESA, it is a simple and safe choice that can make sense either as a starting point or if your child will be starting college soon.

And Furubotten-LaRosee argues that no matter which account you choose, the main priority should simply be to separate your college savings from your regular checking and savings accounts.

“Even if it’s just in a separate savings account, the main thing is having it really separate and earmarked for college,” said Furubotten-LaRosee. “That gives it a little protection from your day-to-day spending.”

Choosing the right 529 savings plan for you

529 savings plans allow you to save a lot of money while being tax-efficient for your child’s education, which can help defray the rising costs of college.

The first step is always understanding your home state’s plan to see what kind of tax breaks are available. Then, you can compare it with other states to determine which 529 savings plan will allow you to minimize costs and access the best investment options.

Finally, you can make your decision within the context of your entire financial plan. Saving for college is a fantastic goal, and 529 savings plans are a powerful way to do it, but it shouldn’t come at the expense of other financial responsibilities.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Matt Becker
Matt Becker |

Matt Becker is a writer at MagnifyMoney. You can email Matt here

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Best of, College Students and Recent Grads, Credit Cards

Best Student Credit Cards July 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Getting a credit card while you’re in college can set you up for financial success, provided you avoid racking up unnecessary charges. If you are over 18 and have a steady income, applying for a card now will kick start your credit history, and you can start building that all-important credit score.

Learning how to choose and use the right student credit card is relatively simple. Make sure you avoid annual fees and go with a bank or credit union you can trust. When you get the card, make sure you use it responsibly and pay the balance in full and on time every month. If you do these things consistently over time, you can leave school with an excellent credit score. And if you want to rent an apartment or buy a car, having a good credit score is very important.

Our Top Pick

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Rates & Fees

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Discover it® Student Cash Back

Annual fee
$0
Rewards Rate
5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum each time you activate, 1% unlimited cash back on all other purchases - automatically.
Regular APR
15.24% - 24.24% Variable
Credit required
fair-credit
Fair

Magnify Glass Pros

  • Good Grades Reward program: Did you study extra hard this year? If you’ve gotten a 3.0 GPA or higher for an entire school year, Discover will reward you with an extra $20 statement credit. You can get this statement credit for up to five years in a row as long as you’re still a current student when you apply.
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  • Cash back match at end of your first year: In addition to rotating 5% cash back categories, new cardmembers will also get an intro bonus. When your first card anniversary comes around, Discover will automatically match your cash back rewards you earned during your first year.

Cons Cons

  • Remember to sign up for bonus places: Even though this card comes with a great cash back rewards program, it comes with a catch: you’ll need to manually activate the bonus places each quarter. You can do this by calling Discover or logging in to your account online. If you forget, you’ll still earn 1% cash back if you make any purchases in the qualifying categories.
  • Gift certificates only available at certain levels: You can redeem your rewards for many things such as Amazon purchases, a statement credit, or a donation to a charity, to name a few. But, if you’d like to get a gift card instead, you’ll need a cash back balance of at least $20 saved up in your account.
Bottom line

Bottom line

The Discover it® Student Cash Back offers great perks for college students, such as a rewards program for good grades and a free FICO® score so you can learn about your credit firsthand. Its cash back rewards program is our favorite. No other card for students (that we could find) offers the opportunity to earn up to 5% cash back. And with no annual fee, this is our top pick.

Read our full review of the Discover it® Student Cash Back

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Journey® Student Rewards from Capital One®

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Journey® Student Rewards from Capital One®

Annual fee
$0
Rewards Rate
1% Cash Back on all purchases; 0.25% Cash Back bonus on the cash back you earn each month you pay on time
Regular Purchase APR
26.96% (Variable)
Credit required
bad-credit
Average/Fair/Limited

Magnify Glass Pros

  • 1.25% cash back if you pay on time: Each purchase you make earns a flat-rate 1% Cash Back on all purchases; 0.25% Cash Back bonus on the cash back you earn each month you pay on time. This makes it handy for people who want as simple a card as possible. And it rewards great behavior.
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Cons Cons

  • High APR: This card carries an APR of 26.96% (Variable). That’s almost twice as high as some other student credit cards, such as the Wells Fargo Cash Back CollegeSM Card with a rate as low as 13.40% - 23.40% Variable APR. It’s just one more incentive to pay off your bill in full each month.
Bottom line

Bottom line

We really like this card because it actively rewards you for developing good credit-management behavior by offering a small cash back bonus for on-time payments. In addition, the cash back program is straightforward with no confusing categories to remember or opt into, making this card a good option for students who want a simple, flat-rate card.

Read our full review of the Journey® Student Rewards from Capital One®

Best Intro Bonus

Wells Fargo Cash Back CollegeSM Card

The information related to Wells Fargo Cash Back CollegeSM Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

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Annual fee
$0
Rewards Rate
3% cash rewards on gas, grocery, and drugstore purchases for the first 6 months, 1% cash rewards on virtually all other purchases
Regular Purchase APR
13.40% - 23.40% Variable
Credit required
excellent-credit
Good/Excellent

Magnify Glass Pros

  • Interest rates as low as 13.40% - 23.40% Variable APR: Depending on your credit, your interest rate could be between 13.40% - 23.40% Variable APR, but there is no guarantee you’ll receive the lower rate. This is a lower variable APR range than most student cards, and can help if you aren’t able to pay your balance in full one month.
  • Intro Rewards Bonus: 3% cash rewards on gas, grocery, and drugstore purchases for the first 6 months, 1% cash rewards on virtually all other purchases
  • Access to credit education: Wells Fargo provides you with all sorts of tools and information to learn about things like credit, budgeting, and expense tracking. While this is a nice feature, it’s not exclusive to Wells Fargo. You can get this information from free tools such as Mint, or even reading books and blogs. But it is pretty handy having it right at your fingertips when logged in to your account.

Cons Cons

  • Need to be a Wells Fargo member to apply online: You can go into any one of the 6,000+ branches and apply for the card. You can also apply online, but you’ll need to be an existing Wells Fargo customer. However, anyone can open a checking account online with a minimum deposit of $25.
  • High bars for some cash back redemption options: There are a lot of redemption options available through Wells Fargo’s own online cash back rewards mall. However, if you’d just like straight cash, you have a few options. You can request a direct deposit into your Wells Fargo checking account, savings account, or Wells Fargo credit card (if applicable) in $25 increments, or request a paper check in $20 increments. That can take a long time to accumulate if you’re not spending much with your card.
Bottom line

Bottom line

The Wells Fargo Cash Back CollegeSM Card is a relatively simple card with a great intro bonus of 3% cash rewards on gas, grocery, and drugstore purchases for the first 6 months, 1% cash rewards on virtually all other purchases In addition, the low variable APR is handy for those who think they’ll be carrying a balance on their credit card from month to month at some point in the future. This is generally something we recommend against, but if you can’t avoid it, the Wells Fargo Cash Back CollegeSM Card is your best bet.

Read our full review of the Wells Fargo Cash Back CollegeSM Card

Bank of America® Travel Rewards Credit Card for Students

Magnify Glass Pros

  • Unlimited rewards. Earn unlimited 1.5 points for every $1 you spend on all purchases everywhere, every time and no expiration on points.
  • Flexible rewards redemption. You can redeem your points for a statement credit to pay for flights, hotels, vacation packages, cruises, rental cars or baggage fees. Plus, this card doesn’t restrict you to a particular airline or chain of hotels.
  • Free FICO score. Keep track of your credit score via online banking or Bank of America’s mobile app.
  • Chance to earn more rewards. Have an active Bank of America checking or savings account? Then this card offers a chance to get a 10% customer points bonus on every purchase. The card is also eligible for the benefits of the Preferred Rewards program, though that program is based on banking and/or investment balances that might be too high for many college students to qualify for.
  • Foreign transaction fee? There is None.

Cons Cons

  • Points are not worth as much when redeemed for cash back. When redeemed for a travel credit, each point is worth $0.01. However, if redeemed for cash back, points are only worth $0.006 each. For example, 2,500 points redeemed for travel would be worth $25. The same number of points redeemed for cash back would be worth $15.
Bottom line

Bottom line

If you’re looking for a student card offering travel rewards, the Bank of America® Travel Rewards Credit Card for Students could be a good option. With an annual fee of $0 and points that can be redeemed for travel with any airline or stays with any hotel line, this card gives you options.

The information related to Bank of America® Travel Rewards Credit Card for Students has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Best Credit Union Card

Altra Federal Credit Union Student Visa® Credit Card

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on Altra’s secure website

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Altra Federal Credit Union Student Visa® Credit Card

Annual fee
$0
Rewards Rate
Earn double Reward Points on every dollar of purchases in the first 60 days after opening your new account, then 1 point per dollar spent.
Regular Purchase APR
16.15% Fixed

Magnify Glass Pros

  • $20 reward for good credit card usage: If you can maintain your account in an “exceptional way” for your first year, you’ll get a bonus $20 reward on your card’s anniversary. All you have to do is not have any late payments, don’t charge over your card’s limit, and use your card for at least six out of twelve months.
  • Up to $500 random winner each quarter: It’s like playing the lottery, except you don’t have to buy a lottery ticket. Each quarter Altra will choose one student cardholder at random and pay back all of their purchases from the previous month, anywhere between $50 to $500.
  • Earn rewards: For the first 60 days after you open your account, you’ll earn 2 points per dollar spent. After that you’ll earn 1 point per dollar spent. You can redeem these points for cash back, merchandise through their online rewards mall, or travel.
  • Redeem points for a lower interest rate: If you’ll need a car in the future, this might be a good credit card to get. You can trade in 5,000 points for a 0.25% reduction, or 10,000 points for a 0.50% reduction on an auto loan through Altra Federal Credit Union. That could end up saving you a ton of cash in the long run.

Cons Cons

  • 1% foreign transaction fee: This is definitely one card to leave at home if you’ll be traveling or studying abroad. Most credit cards charge a 3% foreign transaction fee, so this is on the low side. Still, it’s not too hard to find a student credit card with no foreign transaction fee, such as the Discover it® Student Cash Back or the Journey® Student Rewards from Capital One® card.
  • Must join Altra Federal Credit Union: Luckily, anyone can join, but it might take a bit of legwork on your part compared to a bank. If you don’t meet certain membership eligibility criteria, you can join the Altra Foundation for $5. Then you’ll need to open a savings account with a minimum $5 deposit that must remain in the account while you have your card open.
Bottom line

Bottom line

If you’re a student who doesn’t mind working with a credit union, Altra provides a card that has several rewards benefits. This card is a good option if you may be taking out an auto loan in the next few years, since you’ll benefit from a reduced interest rate by trading in your rewards points. In addition to earning rewards, using this card responsibly can help you build credit.

Read our full review of the Altra Federal Credit Union Student Visa® Credit Card

Best Secured Card

Discover it® Secured

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on Discover Bank’s secure website

Rates & Fees

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Discover it® Secured

Annual fee
$0
Minimum Deposit
$200
Regular APR
25.24% Variable
Credit required
bad-credit
Poor/New

Magnify Glass Pros

  • Cashback program: This card has a feature uncommon to other secure cards — a cashback program. You earn 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus 1% cash back on all other credit card purchases.
  • Cashback Match™: Discover will match ALL the cash back you’ve earned at the end of your first year, automatically. There’s no signing up. And no limit to how much is matched (new cardmembers only). This is a great added bonus that increases your cash back in Year 1.
  • Automatic monthly reviews after eight months: Discover makes it easy for you to transition to an unsecured card with monthly reviews of your account starting after eight months. Reviews are based on responsible credit management across all of your credit cards and loans.

Cons Cons

  • Security deposit: You need to deposit a minimum of $200 in order to open this card. This will become your credit line, so a $200 deposit gives you a $200 credit line. If you want a higher credit limit, you need to increase your deposit. The security deposit is refundable, meaning you will receive your deposit back if you close the card, as long as your account is in good standing.
Bottom line

Bottom line

The Discover it® Secured is great for students who want to build credit. This card easily transitions you to an unsecured card when the time is right, and you can earn cash back. With proper credit behavior, you’ll soon be on your way to an unsecured card.

Read our full review of the Discover it® Secured

Best for No Credit History

Deserve® EDU Mastercard

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on Deserve’s secure website

Deserve® EDU Mastercard

Annual fee
$0
Rewards Rate
1% unlimited cash back on ALL purchases
Regular Purchase APR
20.99% Variable
Credit required
bad-credit
Fair/Good Credit or No Credit

Magnify Glass Pros

  • No credit history required: You can qualify for this card without any credit history, making this a great option for students new to credit. You don’t even need a Social Security number when applying.
  • Reimbursement for Amazon Prime Student*: This card will reimburse you for the cost of a year of Amazon Prime Student (valued at $49). You need to charge your membership to this card to qualify, and you will not be reimbursed for subsequent years’ membership fees.
  • No foreign transaction fee: Whether you travel abroad or study abroad, you can rest easy: There are no foreign transaction fees with this card.

Cons Cons

  • Low cash back rate: The rewards program has a subpar 1% unlimited cash back on ALL purchases. You can do better with some of the other cards mentioned in this post. Though as a student, rewards shouldn’t be your primary focus — instead, build your credit so you can qualify for better non-student cards.
Bottom line

Bottom line

The Deserve® Edu Mastercard for Students is a great choice for students who are looking to build credit. Deserve markets their cards for those who may have trouble qualifying for credit, and students who fall into this category may more easily qualify for this card than for cards from traditional banks. You can earn cash back, and receive a great promotional offer of a year of Amazon Prime Student for free*.

The information related to Deserve® Edu Mastercard for Students has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

Also ConsiderAlso Consider

Golden 1 Platinum Rewards for Students

Golden 1 Credit Union Platinum Rewards for Students:

This credit card offers a snazzy rewards program: rather than accumulate points, you’ll get a cash rebate instead. All you have to do is make a purchase. At the end of the month, you’ll get a rebate of 3% of gas, grocery, and restaurant purchases, and 1% of all other purchases deposited back into your Golden 1 savings account at the end of the month. Anyone who lives or works in California is eligible for credit union membership.

What should I look for in a student credit card?

The most important thing to consider when looking for a student credit card is that it charges no annual fee. You should never have to pay to build your credit score. Fortunately, most student cards don’t charge you an annual fee, but it’s still something to watch out for.

The second most important thing you should keep an eye out for are tools that help you learn about credit or even promote good credit-building habits. For example, some student credit cards will give you a free monthly FICO® score update. You can use this freebie to see in real time how your credit score changes as you build credit history by keeping the card open, or paying down your credit card balance, for example.

The last thing you should be considering when picking out a student credit card is the rewards program. I know, I know, it seems counterintuitive. But stick with me — I’ll show you why in the next question.

Why shouldn’t I be concerned about maximizing my rewards while in college?

Rewards cards are nice to have. But if you’re a college student, here’s the truth: you probably won’t spend enough to earn meaningful rewards.

Why? With a good rewards program, you can earn points or cash back. A small percentage of your monthly spending can add up quickly. However, given the tight budget that most college students live on, it will probably take a while to earn meaningful rewards. For example, if you earn 1.25% cash back and spend $300 a month on your card, you would earn $45 of cash back during the year.

College students are very good at making good use of $45. And our favorite card offers a great cash back rewards program. Just don’t expect to earn a lot of cash back, given the tight budget of a college student.

Why should I get a credit card as a college student?

There are a lot of great reasons why you should get a credit card, as long as you can commit to using it responsibly.

The single biggest reason why you should get a credit card as a college student is because you can start establishing a credit history now. When you graduate from college, you will need a good credit score to get an apartment. And your future employer will likely check your credit report. Building a good credit history while still in college will help prepare you for life after graduation.

Getting a credit card while in college can also train you to develop good credit habits now. But you need to be honest with yourself. If you find that you can’t avoid the temptation of maxing out your credit card, you might want to switch to a debit card or cash.

Finally, getting a credit card now can be the motivation you need to start learning about credit. These skills aren’t hard to learn, and they could save you thousands or even hundreds of thousands of dollars later in life (when you want a mortgage, for example).

What is the CARD Act and why should I care about it?

Many years ago, credit card companies would market on college campuses. You could get a free beer mug or t-shirt in exchange for a credit card application. And you would be able to qualify for a credit card without having any income. The Credit Card Accountability Responsibility and Disclosure (CARD) Act was signed into law in May 2009 to change a number of practices.

How did the CARD Act change student credit cards?

The CARD Act made a lot of changes in how credit card issuers do business with students. One of the biggest changes was requiring students to be able to demonstrate an ability to pay. If you are under 21 and do not have sufficient income (a campus job, for example), you would need to get a co-signer.

In addition, colleges must now limit the amount of credit card marketing on campus. The days of free t-shirts and pizzas in exchange for credit card applications are gone. But that doesn’t mean it is impossible for a college student to get a credit card. Some highly reputable banks and credit unions still offer student cards. And building a good credit score while still in college is still highly recommended.

How can I protect myself from racking up debt?

When used properly, credit cards are a very convenient method of repayment. However, when not used properly, you can end up deep in credit card debt. It is important to establish a healthy relationship to credit now, with your first credit card.

You should try to ensure that you pay off your credit card bill in full and on time every month. Ideally, you should set up an automatic monthly payment. And to keep yourself on track, take advantage of alerts offered by most credit card companies. You can even get daily text messages reminding you of your balance.

How can I automate my credit card usage?

If all of this sounds confusing, don’t worry. There’s actually a way you can automate your payments so you never even have to bother with the hassle of using a credit card. All it takes is a few minutes of upfront work.

First, you’ll need at least one recurring monthly bill of the same amount, such as Netflix or Spotify. Log in to your account and set up an automatic payment each month using your credit card. Make a note of how much your monthly bill costs.

Next, log in to your bank account. Set up a second automatic payment to go to your credit card each month for the same amount as the bill. If your bank doesn’t offer the option to set up automatic payments, you may also be able to set up your credit card to automatically withdraw the amount of the bill from your bank.

Because you know this bill will be for the same amount each month (barring any price increases), you can literally just leave this running in the background each month on autopilot. You don’t even have to carry your credit card in your wallet if you don’t want to. Then, when you graduate, you’ll automatically have an improved credit score!

What happens to my student credit card when I graduate?

Congratulations! You’ve made it to the finish line. But what about your student credit card? You may choose to hold on to your student card since it might be your oldest credit account and this can play a part in your credit score. If you close your student credit card account, it will reduce your average age of credit accounts and could hurt your credit score. Instead of closing the account, you can ask your student card issuer if there is an option to upgrade your card.

Here is a summary of our favorite cards:

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Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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College Students and Recent Grads

Guide to Free Community College in the U.S.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

free community college
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Free community college in the U.S. is starting to become a reality. As of April 2019, 24 states have signed into law versions of “College Promise” programs or state-funded scholarships and grants aimed at delivering subsidized higher education to their residents. This number is expected to grow in the coming year as other states have begun pushing for legislation. Numerous cities across the U.S. have also taken notice, enacting localized scholarships that cover the costs of two-year college programs.

While the past few years have proven to be monumental for the College Promise cause, this is a movement that has been long in the making:

The history of the free college movement in the United States

Free community college in the 2020 presidential election

With student debt now exceeding $1.5 trillion, some 2020 presidential candidates are proposing some form of free higher education, including free community college. Here are where some of the candidates stand:

  • Julián Castro, the former HUD secretary and San Antonio mayor, has proposed sweeping education reform with his People First Education plan. His plan calls for tuition-free public universities, community colleges and vocational schools.
  • Sen. Bernie Sanders of Vermont first introduced the College for All Act in 2017, which aimed to make college free for students whose families earn under $125,000. In June 2019, Sen. Sanders formally reintroduced the College for All Act, which would eliminate tuition and fees at four-year public colleges and universities, as well as trade schools, apprenticeship programs and two-year colleges. The plan would also eliminate $1.6 trillion in student loan debt via a tax on Wall Street speculation.
  • Sen. Kamala Harris of California stated in January 2019, according to transcripts of her speech: “I am running to declare education is a fundamental right, and we will guarantee that right with universal pre-K and debt-free college.” Harris also co-sponsored the Debt-Free College Act of 2018 with Sen. Brian Schatz.
  • Sen. Elizabeth Warren of Massachusetts has proposed a broad plan to cancel up to $50,000 of student loan debt for households with incomes under $100,000 and provide universal free college. This would be paid for via Sen. Warren’s “Ultra-Millionaire Tax?.”

Which states offer free community college?

So far, 24 states have created different versions of state-funded programs to help residents pay for higher education.

The free community college movement

In recent years, there has been a significant push to make America’s public colleges tuition-free.

The Campaign for Free College Tuition was established in 2014 as 501(c)(3) nonprofit. It is a bipartisan group that works with elected officials, leaders and policy experts to make public colleges tuition-free.

In addition, President Barack Obama proposed the College Promise National Advisory Board in 2015, which pushed for offering two years of community college tuition-free. This proposal was expanded with the America’s College Promise Act of 2015, which would have awarded federal-state partnership grants to states that waive tuition and fees for students wanting to attend community college. While this bill did not pass, several states have gone on to make college tuition-free in their states without federal assistance.

While every state program is different, each is helping students ease the burden of college debt and gain access to higher education.

Free community college in Arkansas

Arkansas created the Arkansas Future Grant (ARFuture Grant) in 2017 to help Arkansas residents cover the costs of tuition and fees at Arkansas community colleges and technical schools. The program is designed to boost higher education in science, technology, engineering or math (STEM) fields, as well as fields of study in demand locally. Students must be enrolled in a qualifying degree program in order to receive the grant and stay in state for three years upon completion of the program.

Who qualifies

In order to receive the ARFuture Grant, students must:

  • Have resided in Arkansas for the three years prior to receiving the grant or have graduated from an Arkansas public school, home school or received a GED
  • Complete a FAFSA
  • Be enrolled part-time or full-time at an approved institution in a qualifying program of study
  • Receive monthly mentoring
  • Complete at least 15 hours of community service for every semester they receive the grant
  • Reside in the state for three years upon graduation
  • Be employed within six months of graduating

What it covers

ArFuture is a last-dollar (meaning it can only be used after other financial aid is exhausted) state grant that covers tuition, fees and charges for eligible students after they’ve exhausted other forms of financial aid (private scholarships, federal financial aid, state-sponsored aid). The grant is awarded on a first come, first served basis and can be used by students for up to five semesters at an approved Arkansas college.

If students are enrolled at an approved four-year college, the grant might not cover all tuition and fees, since students will be awarded the average cost at approved two-year colleges.

Upon graduation, students must commit to working in Arkansas for three consecutive years and find employment within six months of graduating.

Fine print

A few things to keep in mind when pursuing an ARFuture Grant:

  • Students must be enrolled in a high-demand field of study program.
  • Students must meet satisfactory academic progress standards, as defined by their school.
  • Failing to meet the mentor, community service, post-graduation state residency or employment requirements will result in grants being converted to loans.

Free community college in California

Gov. Jerry Brown signed the California College Promise Grant into law in October 2017. This program aims at making the first year of community college tuition-free for eligible students. The program builds on a previous college promise initiative, the Board of Governors Fee Waiver, which aimed at providing low-income students a pathway to community college with no tuition or fees. The California College Promise has expanded on this by allocating $46 million toward helping California residents receive tuition-free community college and achieve successful outcomes.

Who qualifies

To be eligible* for the California College Promise Grant, students must:

  • Be enrolled at a California community college
  • Be a first-time student
  • Be a California resident or be exempt from non-resident fees under AB-540
  • Have financial need
  • Be a full-time student taking at least 12 credits per semester
  • Maintain a cumulative GPA of 2.0

*Eligibility requirements may differ by California district.

What it covers

The California College Promise Grant aims to cover enrollment fees for the first year of community college. The plan waives the $46 per-unit fee for enrolling at any of California’s 114 community colleges. It is a first-dollar award, meaning students can use it regardless of any additional forms of financial aid they might receive.

Fine print

In order to be eligible to receive a California College Promise Grant, students and their families should note:

  • Funds are paid directly to the community college after the College Promise application is completed and the student is registered for classes.
  • Certain income limit requirements must be met. For example, for the 2018-2019 school year, a family of four must earn less than $36,900 to be eligible for the grant.

Free college in Delaware

The Delaware Student Excellence Equals Degree (SEED) scholarship program was created in 2005. This last-dollar program (meaning it can only be used after other financial aid is exhausted) helps eligible students seeking an associate degree at the Delaware Technical Community College or the University of Delaware’s Associate in Arts program receive reduced or tuition-free higher education. The state has gone on to create the Inspire scholarship for eligible students attending Delaware State University.

Who qualifies

In order to receive a SEED scholarship, students must:

  • Live in Delaware
  • Have graduated from a Delaware high school with a cumulative GPA of 2.5 or 80 on a 100-point scale
  • Complete a FAFSA
  • Apply for all appropriate forms of financial aid, including Pell Grants
  • Be enrolled in a degree-seeking program at Delaware Tech or the University of Delaware’s Associate in Arts program
  • Have not committed a felony
  • Attend college in the semester immediately following high school graduation
  • Maintain full-time status (24 credit hours per academic year)
  • Maintain a cumulative GPA of 2.5

Inspire scholarships are awarded to students attending Delaware State University who fulfill the above criteria and:

  • Graduate from a Delaware high school with a GPA of at least 2.75
  • Complete 10 hours of community service each semester
  • Maintain a cumulative GPA of 2.75
  • Take a minimum of 24 credits per year

What it covers

The SEED scholarship aims to cover all tuition costs that other forms of financial aid do not. The scholarship does not pay for fees and books, and it is only applicable to students pursuing associate degrees from Delaware Technical Community College or the University of Delaware’s Associate in Arts program.

The Inspire scholarship provides eligible students up to approximately $3,900 per year toward tuition at Delaware State University. This scholarship can extend up to eight semesters. Like SEED, this is a last-dollar scholarship that covers the remaining tuition after other financial is exhausted, and it can’t cover non-tuition costs.

Fine print

It’s important to keep a few things in mind when considering the Delaware SEED or Inspire programs:

  • You must start college in the fall following graduation to be considered eligible. Students who take a semester off are not eligible.
  • Students must take a full course load and complete at least 24 credits in the academic year to maintain eligibility.
  • The SEED scholarship will be awarded for a maximum of six continuous semesters.
  • If a Pell Grant covers full tuition, students are not eligible for a SEED or Inspire grant.

Free community college in Hawaii

The Hawaii Promise was signed into law in 2017 by Gov. David Ige. The legislation appropriated $1.8 million to providing eligible Hawaii residents free tuition at seven University of Hawai’i Community Colleges. The program is a last-dollar scholarship, meaning it will provide financial assistance only after other financial aid and scholarships have been applied.

Who qualifies

In order to be eligible for the Hawaii Promise, applicants must:

  • Complete a FAFSA
  • Be a resident of Hawaii or qualify for exempt status
  • Take at least six credits per semester within the UH system
  • Take at least one credit at the applicant’s home institution
  • Not possess a bachelor’s degree
  • Meet satisfactory academic progress policy requirements while enrolled
  • Seek a degree in a program that accepts financial aid
  • Accept all forms of federal and state grants, scholarships and any other funding sources that do not require repayment

What it covers

The Hawaii Promise is a needs-based, last-dollar scholarship that covers in-state tuition at the University of Hawaii Community Colleges. Students who qualify will receive financial aid that covers direct educational costs. This includes: tuition, fees, books, supplies and transportation. For the 2017-2018 year, the average award was $1,200.

Fine print

When applying for the Hawaii Promise scholarship, there are a few things to keep in mind:

  • Applicants must exhaust all other forms of financial aid before receiving funding.
  • Students must take at least six credits per semester.
  • Students must maintain a GPA of 2.0 to remain eligible as per the satisfactory academic progress guidelines.

Free college in Idaho

Established in 2015, Idaho’s Direct Admissions program provides a pathway for high school seniors to be accepted to eligible Idaho colleges and universities without applying to them. The state program uses GPA and SAT/ACT scores to assure incoming freshmen seats at eligible institutions.

The state has additionally created the Opportunity Scholarship, which is a needs-based scholarship for eligible Idaho residents that can be renewed for up to four years. Idahoans may see broader tuition assistance in the future. Some Idaho lawmakers are proposing an Idaho Promise program, similar to other states, which would provide free tuition to all residents seeking a certificate or associate degree at Idaho’s community colleges, regardless of income or age.

Who qualifies

While the Direct Admissions program automatically sends letters out to high school seniors notifying them they’ve been accepted into the program, the Opportunity Scholarship does have some eligibility requirements. Applicants must:

  • Be a resident of Idaho
  • Have a cumulative, unweighted GPA of 2.7 or above
  • Be working toward their first undergraduate degree or certificate
  • Earn at least 24 postsecondary credits before a cease in enrollment
  • Have not attended a postsecondary institution within the last two years
  • Complete a FAFSA
  • Maintain satisfactory academic progress
  • Attend an eligible university or certificate program

What it covers

The Opportunity Scholarship awards eligible applicants up to $3,500 per year and is renewable for up to four years. Recipients must renew each year to continue to receive the scholarship.  Money can be spent on education costs, which include tuition, fees, books and other reasonable expenses related to college attendance.

Fine print

It’s important to note that in order to continue to renew an Opportunity Scholarship, students must:

  • Maintain a cumulative GPA of 3.0
  • Students must complete at least 24 credit hours per academic year if attending a four-year institution
  • Students attending a two-year program must complete 18 credits per academic year in order to remain eligible

Free community college in Indiana

Indiana’s Workforce Ready Grant helps students pay tuition and mandatory fees for eligible high-value programs at Ivy Tech Community College, Vincennes University and other certificate providers. The definition of “high-value” is based on employer demand, wages and industries whose workers are in high demand throughout Indiana. These are currently:

  • Advanced manufacturing
  • Building and construction
  • Health services
  • Information technology and business services
  • Transportation and logistics

Who qualifies

In order to qualify for the Indiana Workforce Ready Grant, prospective students must:

  • Be 18 or older
  • Be an Indiana resident and U.S. citizen or eligible non-citizen
  • Have a high school diploma or equivalent
  • File a FAFSA
  • Enroll full-time (four courses) if a dependent student or half-time (two courses) if independent
  • Make satisfactory academic progress, as defined by the school

What it covers

The Workforce Ready Grant covers two years of tuition and fees after other financial aid has been applied at Ivy Tech Community College, Vincennes University and other approved providers. While the grant counts toward all required credits of a qualifying program, it does not cover courses that fall outside of the designated program curriculum. It also doesn’t cover any extra program-specific costs and equipment.

Fine print

Keep in mind when considering applying for the Indiana Workforce Ready Grant:

  • The Workforce Ready Grant is not limited by family income.
  • Those who have already completed a bachelor’s or associate degree are not eligible to participate in this program.

Free community college in Kentucky

Gov. Matt Bevin signed the Work Ready Kentucky Scholarship (WRKS) into law in December 2016. This state-based, last-dollar scholarship (meaning it can only be used after other financial aid is exhausted) helps Kentucky residents earn an associate degree in five approved fields of study: health care, advanced manufacturing, transportation/logistics, construction and business services/information technology. Find a full list of programs here.

Who qualifies

To qualify for WRKS, applicants must meet certain criteria:

  • Be a U.S. citizen or permanent resident
  • Be a Kentucky resident
  • Have earned a high school diploma or GED
  • Have not yet earned an associate or more advanced degree
  • Be enrolled or accepted into an approved institution under an approved field of study
  • Maintain satisfactory academic progress (minimum 2.0 GPA) to continue receiving funding
  • Complete a FAFSA
  • Not be in default or owe a balance to the Kentucky Higher Education Academic Association (KHEAA)

What it covers

The Work Ready Kentucky Scholarship covers eligible student’s tuition and fees after federal and state financial aid, grants and scholarships have been exhausted. It can be used to cover four semesters (or 60 credit hours) at any one of the 16 approved colleges across Kentucky. Of the five designated fields of study the scholarship applies toward, there are more than 350 programs potential students can apply to. Funding for WRKS is awarded on a first come, first served basis to applicants.

Fine print

  • You cannot be enrolled in any other higher education program while receiving this scholarship.
  • The amount awarded for fees shall not exceed $400 per year.

Free college in Louisiana

Louisiana’s Taylor Plan has been around since 1989, but it was renamed the Taylor Opportunity Program for Students in 2008 by Gov. Bobby Jindal. TOPS is a scholarship funded by the state that can cover up to four years of college tuition at the Louisiana Association of Independent Colleges and Universities (LAICU). There are currently four types of TOPS scholarships, each with its own award amounts, eligibility and renewal requirements:

Who qualifies

While all four Louisiana TOPS scholarships have individually specific requirements for eligibility, they all share a few conditions:

  • Complete a FAFSA
  • Be a Louisiana resident
  • A minimum composite score of 20 on the ACT (1020-1050 on the SAT)
  • Graduate high school with a minimum GPA of 2.5 in TOPS’ core curriculum classes
  • Enroll as a full-time freshman by the first semester following the one-year anniversary of high school graduation

What it covers

The Louisiana TOPS scholarship award amounts differ depending on which program a student qualifies for. The TOPS scholarship can be used in conjunction with other types of financial aid and scholarships, up to the cost of attendance, which includes not only tuition and fees but room and board, books and other expenses. Awards are paid directly to the college or university being attended, and any funds left over are disbursed to students. Eligible students can receive the award for up to eight semesters.

For the 2018-2019 school year, the award amounts are:

  • TOPS Opportunity Award: $2,703.48 per semester
  • TOPS Performance Award: $2,903.48 per semester
  • TOPS Honors Award: $3,103.48 per semester

*TOPS Tech Awards depend on the institution or program a student is attending.

Fine print

When applying to the TOPS program, there are a few things to keep in mind:

  • Parents must give written consent to release academic transcripts to the Louisiana Office of Student Financial Assistance in order for the state to determine if a student is eligible for a TOPS program.
  • Students who complete an undergraduate program in fewer than eight semesters may be eligible to receive scholarship awards toward a graduate degree.

Free community college in Maryland

Maryland residents can receive up to $5,000 toward their community college tuition with the Maryland Community College Promise Scholarship. This program was signed into law in 2018 in an effort to give low-income families a pathway to higher education.

Who qualifies

To qualify for the Maryland Community College Promise Scholarship, students must:

  • Complete a FAFSA
  • Be a Maryland resident
  • Enroll within two years of high school graduation or equivalent, with a minimum GPA of 2.3
  • Enroll full-time (12 credits per semester) for a credit certificate or associate degree
  • Have an annual income of less than $100,000 if the applicant is single or living in a single-parent household or $150,000 if the applicant is married or living in a two-parent household
  • Maintain a 2.5 GPA throughout college
  • Reapply for the scholarship each year
  • Agree to the work requirements

What it covers

This scholarship pays for up to $5,000 of the cost of tuition and mandatory fees at any Maryland public community college. Since it is a last-dollar scholarship, it only kicks in after other forms of financial aid have been applied.

Fine print

When applying to this College Promise scholarship, keep in mind:

  • Recipients must agree to find work in-state within one year of completing their degree.
  • Recipients must agree to work in the state for the same number of years as they received the scholarship. Failure to do so results in the scholarship converting to a loan.

Free college in Michigan

Michigan’s Kalamazoo Promise program was expanded on in 2017 by Gov. Rick Snyder to increase the Promise Zones from 10 to 15 (although there are currently only 11 active zones). These Promise Zones award scholarships to high school graduates living within them.

Through a combination of Promise Zone scholarships, Pell Grants and other needs-based awards, Michigan offers students a pathway toward “tuition-free” college.

Who is eligible

In order to receive a Promise Zone scholarship, students must:

  • Be a Michigan resident
  • Live in one of the designated locality zones
  • Complete a FAFSA
  • Meet grade point requirements as determined by each zone

Each of the 11 active Michigan Promise Zones has its own eligibility requirements for students.

What it covers

Every Promise Zone sets its own scholarship awards in terms of dollar amounts and which institutions scholarships can be used. However, all Promise Zones aim to provide every eligible student a tuition-free pathway to an associate degree. Some zones also extend these awards to bachelor’s degree programs or technical schools.

Fine print

Since every Promise Zone creates its own eligibility requirements, make sure to research thoroughly what students are responsible for and what they must achieve to continue to receive the scholarship.

Free community college in Missouri

The Missouri A+ Scholarship program awards last-dollar scholarships (meaning students must exhaust other forms of scholarships and financial aid first) to students from designated A+ high schools. Eligible students receive scholarships toward participating community colleges and vocational schools throughout Missouri.

Who qualifies

In order to be a part of the Missouri A+ program, students must:

  • Be a U.S. citizen or permanent resident
  • Enter into a written agreement with their high school prior to graduation
  • Attend a designated A+ high school for three years prior to graduation
  • Graduate with a 2.5 GPA or higher
  • Have a minimum 95% attendance rate between grades 9 and 12
  • Perform a minimum of 50 hours of unpaid tutoring or mentoring
  • Maintain a good record of citizenship and avoid unlawful drug or alcohol use
  • Have achieved a score of proficient or advanced on the Algebra I end-of-course exam or a higher level DESE-approved end-of-course exam in the field of mathematics
  • Complete a FAFSA
  • Enroll full-time at a participating vocational school or community college
  • Maintain a cumulative GPA of 2.5 or complete 90% of their clock hours to renew their scholarship
  • Complete 12 credit hours (or six credits in the summer) each semester

What it covers

The Missouri A+ Scholarship will reimburse all tuition and general fees for eligible students after all forms of non-loan financial aid have been applied. Students must fill out a FAFSA every year in order to receive as much financial aid as possible before the A+ scholarship kicks in.

The state also sets a published standard per-credit tuition rate each year, which is the maximum students will be refunded. The 2018-2019 rate is $170.75 per credit-hour or $4.60 per clock-hour.

Students are eligible to receive the scholarship for a maximum of 48 months after high school graduation, until an associate degree is received or they’ve completed 105% of the hours required for their program of study.

Fine print

A few things to keep in mind when applying for the Missouri A+ Scholarship:

  • Repeated coursework for which students have already received a grade will not be reimbursed, e.g., retaking a course.
  • Some fees may not be reimbursed if there are insufficient state appropriations.
  • Students can defer their attendance if they are on active duty in the armed forces.

Free community college in Montana

The Montana Promise grant was created in 2017 for state residents attending two-year programs.

Who qualifies

In order to qualify, students must:

  • Be a Montana resident for 12 months prior to application
  • Have graduated high school or completed an equivalent program
  • Have earned a cumulative 2.5 GPA in high school
  • Have completed a FAFSA and accepted all available financial aid
  • Have not completed more than 60 credit hours at a postsecondary school or earned an associate degree prior to application

What it covers

Recipients of the Montana Promise grant will receive funds covering tuition after all other forms of financial aid have been exhausted. A student may only receive the Montana Promise grant for two years, and they must meet the academic and community service requirements each semester.

Fine print

  • Students must maintain a cumulative GPA of 2.7 in order to remain eligible.
  • Students must commit to eight hours of community service each semester they’re enrolled.

Free community college in Nevada

Enacted in 2017 by the Nevada legislature and signed into law by Gov. Brian Sandovol, the Nevada Promise Scholarship is a last-dollar scholarship (that is, it will cover costs after other financial aid is exhausted). It provides Nevada residents with financial aid toward any of the state’s four community colleges.

Who qualifies

To be eligible for the Nevada Promise Scholarship, applicants must:

  • Be a Nevada resident
  • Have received a high school diploma or GED within the past academic year
  • Apply to an eligible community college
  • Complete the Nevada Promise Scholarship application
  • Complete a FAFSA
  • Be under the age of 20
  • Attend two mandatory trainings
  • Complete 20 hours of community service
  • Meet at least once with their college-assigned mentor
  • Enroll in a minimum of 12 credits for each semester of the school year following high school graduation

What it covers

The Nevada Promise Scholarship covers up to three years of tuition and mandatory fees to any of Nevada’s four community colleges. Since it is a last-dollar scholarship, students must first exhaust other forms of financial aid (grants, not loans), including federal Pell Grants, Silver State Opportunity Grants (SSOG) or the Governor Guinn Millennium Scholarship (GGMS). While the scholarship does cover mandatory fees and tuition, it does not cover the cost of books, meal plans, transportation or school supplies.

Fine print

There are a few things to keep in mind when applying for the Nevada Promise Scholarship:

  • Students must not be in default on any federal student loans or owe a refund to the federal student aid program.
  • If there are more eligible students than there is funding, the scholarship will be awarded on a first come, first served basis.
  • Students must enroll full-time immediately after graduation.
  • Students must have a cumulative GPA of 2.5 to maintain eligibility.
  • Recipients must complete 20 hours of community service per academic year.
  • Students must meet with their assigned mentor at least once per semester.
  • The Nevada Promise Scholarship only applies to consecutive fall and spring semesters; it does not cover summer classes.

Free college in New Mexico

The New Mexico Legislative Lottery Scholarship will pay a portion of eligible students’ tuition up to the completion of an undergraduate degree. The amount covered by the scholarship varies depending on the institution. This program was started in 1996 and has since helped more than 122,000 students attend New Mexico public colleges, universities and technical colleges.

Who qualifies?

In order to qualify for the New Mexico Legislative Lottery Scholarship, students must:

  • Be a resident of New Mexico
  • Have completed high school in New Mexico or resided in New Mexico while earning a GED
  • Enroll at a New Mexico post-secondary education school within 16 months of high school completion
  • Enroll in and earn 15 credit hours per semester at a four-year New Mexico university or 12 credit hours per semester at a two-year New Mexico community college
  • Maintain a 2.5 cumulative GPA

What it covers

This scholarship covers a portion of tuition and does not cover other fees or course materials. How much students receive is determined by the institution to which they apply and the funds available.

In order to receive this scholarship, students must first enroll in a qualifying New Mexico university and have completed their first semester. It is then renewed on a per-semester basis if the eligibility criteria are met. Recipients of the scholarship can get up to seven semesters of funding at a four-year school or three semesters at a community college.

New Mexico also offers a Bridge Scholarship to help cover the costs of tuition for the first semester, prior to joining the lottery program. Bridge Scholarships are offered to New Mexico residents who have graduated from a state public high school or accredited private school, and they are only available to students in the first semester of college.

Fine print

If applying for the New Mexico Lottery Scholarship, it’s important to note:

  • Applicants must not have enrolled at any out-of-state post-secondary schools.
  • Students with disabilities may qualify for reduced credit-hour requirements.

Free community college in New Jersey

New Jersey launched a Debt-Free Promise Program through New Jersey City University in 2016. This program let’s incoming freshmen students with families earning less than $60,000 receive a scholarship instead of having to take out a loan.

Who qualifies

In order to qualify for the Debt-Free Promise Program, students must:

  • Be a New Jersey resident
  • Be admitted to New Jersey City University
  • Complete a FAFSA
  • Have a family household income of $60,000 or less
  • Be an incoming freshman student pursuing their first undergraduate degree full-time

What it covers

Under the Debt-Free Promise Program, qualified students are given a scholarship that covers tuition and fees. This is a last-dollar program, meaning that students must first exhaust other federal and state financial aid before the scholarship kicks in. As of 2018, the program has been expanded to help cover the cost of books by offering a grant of $250 per semester for textbooks.

Fine print

It’s important to note a few things before applying to the Debt-Free Promise Program:

  • Students must fill out a FAFSA each year to renew the scholarship.
  • Students must be considered in good academic standing and full-time in order to be eligible (15 credits per semester).

Free college in New York

New York made history in April 2017 when the Excelsior Scholarship was signed into law. The program, which was originally proposed by Gov. Andrew Cuomo in January 2017, promises free tuition for in-state students attending two- or four-year colleges within the State University of New York (SUNY) and City University of New York (CUNY) systems. This was the first College Promise program of its size and scope in the U.S., and it encompasses both four-year universities and community colleges within the state.

Who qualifies

To qualify for the Excelsior Scholarship in New York, applicants must:

  • Reside in New York state for 12 months prior to application submission
  • Be a U.S. citizen or an eligible non-citizen
  • Have graduated high school within the U.S., earned a high school equivalency diploma or passed an “Ability to Benefit” test
  • Plan to attend an SUNY or CUNY campus for a two- or four-year degree
  • Complete 30 credits per year (minimum of 12 per semester)
  • Maintain good academic standing
  • Be on track to earn an associate degree in two years or bachelor’s degree in four years
  • Have a household income that does not exceed $125,000 for the 2019-2020 school year

What it covers

The Excelsior Scholarship is a last-dollar program, meaning students must first exhaust federal and state resources, scholarships and grants before the program kicks in. Students are awarded up to $5,500 for tuition and fees, minus any dollars received from Pell Grants, New York’s Tuition Assistance Program (TAP) or other scholarship awards.

Students who qualify for the Excelsior Scholarship will have their tuition covered at SUNY and CUNY schools via a credit, which goes directly to the institution and covers any remaining costs. It does not provide financial assistance for books, housing or transportation.

Fine print

  1. Students must live and work in New York for as many years as they are enrolled in the program: If a student fails to do so, the award converts to a loan.
  2. Students must apply for all applicable financial aid: This includes Pell Grants, TAP and other financial awards before applying to the program.

Free college in North Carolina

The 2016 North Carolina Promise plan reduces tuition rates for eligible recipients at Elizabeth City State University, Western Carolina University and the University of North Carolina at Pembroke. Through the plan, the in-state tuition rate is set at $500 per semester, and out-of-state is set at $2,500 per semester.

North Carolina also offers a Fixed Tuition Program, which guarantees tuition rates do not rise for in-state students for up to eight consecutive semesters at 16 North Carolina universities. Find them here.

Who qualifies

The North Carolina Promise plan automatically kicks in once a student is accepted to any of the three eligible universities. In order to qualify for the Fixed Tuition Program, students must be eligible for in-state tuition and attending one of the 16 eligible universities.

What it covers

Under both the North Carolina Promise plan and the Fixed Tuition Program, the offer only applies to tuition. It does not cover any associated fees, housing, books or transportation expenses.

Under the North Carolina Promise plan, part-time undergraduate students are eligible for the program, although tuition is prorated and specific dollar amounts are set by the individual university.

Fine print

It’s important to note that neither of these programs is offered to graduate students.

Free college in Oklahoma

The Oklahoma Promise grant was created in 1992 to help low-income families receive higher education. Students who apply for the scholarship between 8th and 10th grade, meet income criteria and follow academic guidelines can receive a college scholarship.

Who qualifies

In order to receive an Oklahoma Promise scholarship, students must:

  • Apply to the scholarship between 8th and 10th grade
  • Not have a family income above $55,000 when applying and above $100,000 when renewing the scholarship during college years
  • Complete a FAFSA
  • Complete the online application
  • Meet program curriculum requirements prior to graduating high school
  • Maintain satisfactory academic progress, as determined by the college or university

What it covers

The Oklahoma Promise scholarship can be applied toward tuition, as well as other college costs, such as books, room and board, fees, etc. Students can receive other forms of financial aid to cover tuition, but if the total financial aid is greater than the total cost, the Oklahoma Promise scholarship may be withheld for that term. The actual amount given is dependent on how many credit hours a student is taking.

Fine print

Be sure to keep this in mind when applying to the Oklahoma Promise program:

  • Students have a five-year eligibility window to redeem their scholarship after graduation.
  • Students cannot receive award payments for more than 129 credit hours.

Free community college in Oregon

Oregon launched the Oregon Promise grant in 2016 after Gov. Kate Brown signed the bill into law in July 2015. It was one of the first statewide programs to ensure free community college tuition for all eligible students.

Who qualifies

To qualify for the Oregon Promise grant, applicants must:

  • Complete the Oregon Promise Grant Application prior to the deadline
  • Reside in Oregon 12 months prior to submitting an application
  • File a FAFSA or Oregon Student Aid Application (ORSAA) prior to the deadline
  • Have graduated high school or completed their GED no more than six months prior to applying
  • Have maintained a cumulative GPA of 2.5 of higher in high school or received a 145 grade on GED tests
  • Have completed or attempted no more than 90 college credits prior to application
  • Have an expected family contribution (EFC) of no more than $18,000 (2019-2020)

What it covers

The Oregon Promise grant covers tuition for any of the state’s community colleges. Recipients of the Oregon Promise grant in 2018-2019 received awards ranging from $1,000-$3,687 per year. This amount is based on a few factors:

  • How much money is received via FAFSA or ORSAA: The Oregon Promise is a last-dollar scholarship, meaning applicants must first exhaust other financial aid resources before grant money is awarded.
  • Number of credits taken: Students must enroll in at least six credits per term (fall, winter, spring) to be awarded the grant. The grant covers up to 12 credits per term. If a student takes more than 12 credits, they are responsible for covering the cost of the extra credits.
  • Tuition at the community college: Award amounts for 2019-2020 range from $1,000 to $3,834. If a student attends a school that charges more than $3,834 (the average tuition of community college in Oregon), they are financially responsible for covering the difference.
  • 90-credit limit: The Oregon Promise covers up to 90 attempted credits. Once a student surpasses that number, they are no longer eligible.

Oregon Promise Grant amount eligibility by course load

Attempted credits per termEnrollment statusOregon Promise award amount
12 or moreFull time100%
9-11Three-quarter time75%
6-8Three-quarter time50%
Source: https://oregonstudentaid.gov/oregon-promise-faq.aspx

Fine print

The Oregon Promise has a number of stipulations that students must adhere to in order to receive their award each year.

  • A $50 co-pay is automatically deducted each semester.
  • Students must be enrolled for the fall term of every year to maintain eligibility.
  • Funding does not cover summer semester credits.
  • Students must maintain good academic standing: This standard is set by individual community colleges.
  • Students must attend if accepted: If a student is awarded the Oregon Promise grant but chooses not to attend community college, they can no longer use the grant.

Free community college in Rhode Island

Gov. Gina Raimondo signed the Rhode Island Promise into law in August 2017. It provides recent high school graduates in Rhode Island a path toward higher education, no matter their family’s income level.

Who qualifies

To qualify for the Rhode Island Promise, potential applicants must:

  • Be a Rhode Island resident
  • Be younger than 19 years old when they completed high school (public, private or home schooled) or GED program, and they must have completed this recently
  • Apply to the Community College of Rhode Island
  • Enroll the following semester after high school graduation as a full-time student
  • Fill out a FAFSA
  • Fill out the Rhode Island Promise Attestation form

What it covers

The Rhode Island Promise covers two years of tuition and fees for applicants. Students who receive the grant are entitled to tuition and fees for two years at the Community College of Rhode Island to complete an associate degree.

The Rhode Island Promise is a last-dollar scholarship. Students may also apply for other financial awards, such as Pell Grants, Supplemental Education Opportunity Grants (SEOG) or individual institution scholarships. The grant covers any remaining balance.

A key distinction of the Rhode Island Promise is there is no household income limit for applicants. So long as students adhere to the requirements above, they are eligible. Once they complete the program, students are not required to stay in the state, although they are encouraged to do so.

Fine print

While the Rhode Island Promise is a very generous grant, there are a few factors to consider.

  • Students must take a full course load every semester: Students who are considered part-time (less than 12 credits) during the add/drop period will not receive the scholarship, nor will they be eligible for future semesters.
  • Students must maintain a cumulative GPA of 2.5. If a GPA falls below 2.5, students have the ability to take summer classes; however, the Rhode Island Promise does not cover summer courses.
  • Students must complete 30 credits in the first year to renew the scholarship. To be eligible for a second year of the scholarship, students must have 30 credits. AP classes taken in high school can count toward this.

Free community college in South Dakota

South Dakota’s Build Dakota scholarship offers recipients full scholarships to four of the state’s technical institutes. The program applies only to those programs the state has determined as “high-need.” A full list of eligible programs can be found here. The scholarship is unique in that it accepts both in-state and out-of-state applicants. However, recipients must commit to working in South Dakota in their field for a minimum of three years after graduation.

Who qualifies

In order to qualify for the Build Dakota scholarship, applicants must:

  • Be a U.S. citizen or U.S. national
  • Complete a FAFSA
  • Demonstrate aptitude via one of the following:
    • The National Career Readiness Certificate or other industry-recognized certifications
    • Technical, dual or concurrent credit courses
    • Career and technical education coursework
    • Work-based learning experiences, internships or work experience
  • Enroll as a first-time student in a high-need field. Previous technical school or college experience is still accepted.

What it covers

The Build Dakota scholarship covers tuition, fees, books and other required expenses for the given program a recipient is accepted to (e.g., tools). It does not cover housing or living expenses. While the program does promise a full-ride to recipients, there are only a finite number of scholarships awarded each year. Currently, the Build Dakota program awards approximately 300 scholarships per year, and less than one third of the applicants are accepted.

Fine print

There are a few things to keep in mind when applying for the Build Dakota scholarship:

  • While there is no minimum GPA to apply to the program, recipients must maintain a minimum GPA of 2.5 while enrolled.
  • Students who complete the program must work in their respective field in South Dakota for a minimum of three years. If they do not fulfill this requirement, the scholarship will convert to interest-bearing debt.

Free community college in Tennessee

Tennessee became the first state to sign wide-ranging free community college legislation for all residents in May 2014 when the Tennessee Promise was passed. Unlike previous programs, which were confined to certain localities or had other restrictions, such as income, the Tennessee Promise provided all eligible Tennessee students a pathway to higher education. Championed by Gov. Bill Haslam, the Tennessee Promise has paved the way for many other states to create similar free-college programs. As of the end of the 2017-2018 school year, more than 51,000 students had enrolled in the program.

Who qualifies

To qualify for the Tennessee Promise, applicants must:

  • Be a Tennessee resident and a U.S. citizen or eligible non-citizen
  • Complete a FAFSA
  • Be under the age of 19 after graduating high school or GED program
  • Have recently graduated from high school (public, private, home school) or recently received their GED
  • Enroll as a full-time student for the fall semester following graduation
  • Attend a mandatory meeting in applicant’s local area
  • Complete eight hours of community service every semester prior to the start of the semester

What it covers

The Tennessee Promise scholarship is a last-dollar scholarship that covers tuition and fees for any of the state’s 27 colleges of applied technology, 13 community colleges or in-state public four-year colleges that offer a two-year program. It does not cover the cost of books, transportation or room and board. The scholarship is applied after all other forms of financial aid have been exhausted.

While the scholarship has no household income requirements, the program does focus on attracting low-income, at-risk students by sending representatives to high schools across the state to educate students about the program. According to the Tennessee Promise Annual Report of 2019, the average award for the spring 2018 semester for students was $1,033 per student.

A unique aspect of the Tennessee Promise scholarship is the program’s emphasis on mentor guidance. In addition to the money eligible students receive, the state has recruited more than 32,000 volunteers since the program’s start in 2009, according to its 2017 annual report. The goal of a mentor, who is given a maximum of 10 students, is to make the road to college as clear as possible for students. Training is provided to mentors, and students must meet with their mentors at a mandatory meeting held at their high school before the start of fall semester. Students are encouraged to meet and communicate with their mentors leading up to and during their transition to college.

Fine print

There are a few things to keep in mind when applying for the Tennessee Promise scholarship:

  • Students must attend for consecutive semesters as a full-time student. A gap in enrollment or a drop to part-time status results in ineligibility for the program.
  • Students must maintain a 2.0 GPA.
  • Missing a mandatory meeting could result in permanent ineligibility.
  • Students must complete eight hours of community service every semester.

Free college in Washington

Washington’s 2007 College Bound Scholarship is an early commitment to higher education. Low-income families sign up while their children are in middle school, and through the program they can receive a scholarship to public or private two- or four-year schools, technical schools or private career schools.

Who qualifies

In order to qualify for this program, students must:

  • Apply while in 7th or 8th grade
  • Be a Washington resident
  • Meet family household income requirements or be receiving government assistance via food stamps or Temporary Assistance for Needy Families (TANF). Family income limits vary depending on household size. For example, a family of four cannot exceed an annual income of $46,435 to be eligible for the program.

2018-19 Income Chart

Household SizeAnnual Income Guidelines*Monthly IncomeWeekly Income
2$30,451$2,538$586
3$38,443$3204$740
4$46,435$3,870$893
5$54,427$4,536$1,047
6$62,419$5,202$1,201
Each additional household memberAdd $7,992Add $666Add $154
Source: https://readysetgrad.wa.gov/sites/default/files/2018-19.cbs.ms.intro.flyer.pdf

 

  • Graduate from a state high school or home school with a cumulative 2.0 GPA
  • Enroll in college within one year of graduation
  • Have no felony convictions
  • Complete a FAFSA
  • Remain in good standing while in college

What it covers

The Washington College Bound Scholarship can be used at more than 60 state schools and programs. It is combined with other state aid to cover tuition and some fees and provide a small book allowance. It can cover up to eight full-time semesters for students.

Fine print

  1. Students have a five-year window from the time they graduate high school to collect the award, but they must enroll in college within one year of graduation.
  2. Student must be enrolled in at least three credits per term.

Free college in Wyoming

Wyoming’s Hathaway Scholarship was created in 2005 by lawmakers who set up a $400 million permanent endowment for those attending the University of Wyoming or any of the state’s seven community colleges. There are four types of merit-based Hathaway scholarships and one need-based award.

While the scholarship can extend to eligible students for all four years of college, the merit-based scholarship awards are determined by a student’s performance in high school. This determines how much a student can receive through their undergraduate years.

Who qualifies

In order to qualify for any of the four Wyoming Hathaway Scholarships, students must be Wyoming residents and must apply within 48 months of their graduation date. Other criteria depends on which scholarship you’re applying for:

  • Honors Scholarship: Graduating students must complete Hathaway-approved courses, have a minimum 3.5 GPA and score 25 on the ACT/1200 on the SAT.
  • Performance Scholarship: Graduating students must complete Hathaway-approved courses, have a minimum 3.0 GPA and score a 21 on the ACT/1060 on the SAT.
  • Opportunity Scholarship: Graduating students must complete Hathaway-approved courses, have a minimum 2.5 GPA and score 19 on the ACT/990 on the SAT.
  • Provisional Opportunity Scholarship: Graduating students must complete Hathaway-approved courses, have a minimum 2.0 GPA and 17 on the ACT/900 on the SAT.

The rules for keeping the Hathaway Scholarship throughout college also depends on which scholarship you receive:

  • Students who received an Honors or Performance scholarship must maintain a GPA of 2.5.
  • Students who received an Opportunity or Provisional Opportunity scholarship must maintain a GPA of 2.25.
  • Students must maintain continuous enrollment throughout college. Skipping a semester results in ineligibility.
  • Students must also complete at least six credits per semester if studying part-time or 12 credits per semester if full-time.

What it covers

Scholarship recipients can receive:

  • Honors: $1,680 maximum award per semester
  • Performance: $1,260 maximum award per semester
  • Opportunity: $840 maximum award per semester
  • Provisional Opportunity: $840 maximum award per semester

These funds are available as a last-dollar scholarship (meaning it can only be used after other financial aid is exhausted) for tuition at the University of Wyoming or any of the state’s seven community colleges.

Fine print

Students considering the Hathaway Scholarship should keep in mind:

  • Home-schooled students have until the age of 21 to take advantage of the scholarship, subject to ACT scores.
  • The scholarship does not cover remedial college courses.

How to leverage your community college degree

Students who receive an associate degree can save dramatically on tuition costs for the same length of stay at a four-year college. The College Board reported that for the 2018-2019 school year, the average cost of tuition for an associate degree was $3,660 per year at a public institution versus $10,230 per year for in-state students at a public four-year university. That compares to a whopping $26,290 for out-of-state students at a public university.

One way to minimize the cost of college is to take core classes and electives at a community college before transferring to a four-year school. This strategy allows students to take the same classes they would at a four-year college, but without the higher price. Once completed, students can transfer to a four-year school to complete their bachelor’s degree.

Students already enrolled in a four-year university can still take advantage of these savings by taking approved electives and core classes over the summer at a community college. This strategy can help students graduate on time and save money.

Pros and cons of transferring to a four-year school

The main benefit of attending a community college prior to a four-year school is the cost savings. Depending on a student’s situation, they can live at home and commute to school, eliminating room and board costs, which averaged $11,140 for the 2018-2019 school year at public, four-year institutions, according to the College Board.

Students transferring from a community college to a four-year school generally have a clear pathway, so long as they are in good academic standing. However, it’s important to make sure the credits will transfer. This is especially true if a student changes majors upon transferring. For example, a student who took core classes for a history major at community college but then switches to a biology major at a four-year college may have to retake certain courses.

Alternatives to community college

Community college is not the only way to learn new skills and increase your earning potential. While traditional two- and four-year college programs can open up job opportunities, it’s important to note there are other pathways to career success.

Apprenticeships

Apprenticeships offer students a way to learn a specific skill or trade without the burden of student debt, while also earning a wage. While many apprenticeships apply to certain trade skills, such as electrical, plumbing or construction work, there has been a rise recently in the popularity of registered apprenticeships thanks to a U.S. Department of Labor initiative.

Since January 2017, more than 500,000 new apprenticeships have been created, and the Trump administration has set up a Task Force on Apprenticeship Expansion. In June 2019, the Employment & Training Administration announced more than $100 million in grants to expand apprenticeships and close the skills gap for students and workers. An additional $183.8 million of funding has been awarded as Scaling Apprenticeship Through Sector-Based Strategies grants, which aim to develop public-private apprenticeship programs within the health care, information technology and advanced manufacturing industries.

The Labor Department lists a variety of resources for finding and learning more about apprenticeships.

Certificate programs

Certificate programs allow students to become experts in certain skills and industries without committing to a full undergraduate or graduate degree. Intensive programs can be a short as 10 to 12 weeks, while others may take three years or more to complete, depending on education level and area of interest.

Certificate programs are becoming widely popular within the information technology industry due to the salary boost that comes with them. The 2018 IT Skills and Salary Report from Global Knowledge found the average salary difference between certified and non-certified employees within North America is 22%, or $15,913.

Certificate programs can be found at community colleges, graduate schools and online schools across the globe. Popular programs vary for different levels of education. For example, getting certified as a yoga or pilates instructor requires fewer prior education requirements than someone looking to become a Certified Financial Planner.

Trade school

Designed to teach students skills related to a specific career, trade schools give students hands-on learning that directly applies to specific careers. One of the major benefits of attending a trade school, also known as a vocational school, are the job placement programs that come with them. Many vocational schools have strong ties to certain industries, giving students a clear pathway toward earning their first paycheck.

Popular trade school programs include automotive, plumbing, electrical and HVAC, among others, and they can be found in high schools, community colleges and for-profit industry trade schools across the country.

If you’re seriously considering trade school, be sure to do your due diligence. The Federal Trade Commission has warned that some for-profit trade schools misrepresent what they can offer students.

To avoid losing out on a quality education, prospective students should look for schools that are licensed by state agencies or accredited by a legitimate organization. Also be sure to find out the percentage of graduates who find work after finishing the program and the average starting salaries.

Whatever higher education path you take, be sure to look into local and state-run scholarships and grant programs. Research all your options, and plan your finances well ahead of time.

The information in this article is accurate as of the date of publishing. 

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Jackson Wise
Jackson Wise |

Jackson Wise is a writer at MagnifyMoney. You can email Jackson here