No matter how much we dream for the days of old, high college tuition is here to stay. Even with some schools choosing to lower and even freeze their tuition, the days when you could pay a few thousand dollars and walk out with a degree are long gone. As a matter of fact, a 2015 study by The Institute for College Access and Success found that more than 6 in 10 college graduates leave school with some level of student debt. It's clear that anything you can do to reduce those costs would be helpful, but where are some places to find savings? We're here to answer that question today for the people who are late in the game and haven't been saving for their kid's schooling since they were in diapers. Whether you're paying for them or considering going back to school yourself, here are 9 ways to potentially lower your costs for that degree.
1. Load Up On The AP Credits
My parents tried to tell me. My teachers tried to tell me. My classmates tried to tell me. But at 17, I never listened when they said I would regret not taking more AP courses in high school. I say more as if to imply that I took a few ... but I didn't take any at all! If you're not already in the thick of paying for college, passing AP exams allows you to save money by allowing students to fulfill requirements for certain college classes while in high school. Now this isn't to be confused with Advanced PLACEMENT. Advanced Credit allows students to actually receive credit hours towards their degree, which can lower the total costs of college by reducing the number of classes that must be paid for. Advanced Placement simply allows students to bypass certain general education requirements and go straight into more difficult courses, but it does not count as credit. Each school sets their own policies for whether they allow credit or simply advanced placement, so make sure you know or your child knows a school's policy before you make the final decision to enroll.
2. Consider Dual Enrollment or Summer Classes ...
The curriculum for classes within a major often differ wildly from school to school. Even though you may be getting a finance degree from one school and decide to transfer, there is no guarantee that your new school will accept those credits. However, most colleges have general education courses that may have a higher likelihood of being accepted by another institutions. These same courses may also be available at a local community college, and most likely at a lower rate than a 4-year school. Which begs the question: if the same class is available multiple places, why pay for the most expensive one? Consider enrolling at a local community college to knock out some of your general education requirements at night or during gaps in your schedule, or even taking those courses in the summer months. Anything you can do to bring down the cost per class of your degree will benefit you in the long run.
3. ... Or Consider A Partnership Program
While we're on the subject of lower-priced options, in recent years many states have created offerings to incentivize adult learning. For example, in Tennessee, qualifying adults can attend community college for free, and in New York, members of the middle class who agree to live and work in New York after graduation can qualify for free tuition at a 4-year college. Some states even offer reciprocity for in-state tuition, meaning residents from one state can pay in-state tuition for a school in another state where an agreement is in place. Depending on the state in which you live and the state in which you plan to attend school, there may be a host of programs available that help reduce the cost of schooling. Do your research!
4. Evaluate Your Meal Plan ...
Sometimes it's not the cost of tuition that gets you, but the added fees that come along for the ride. College meal plans can sometimes be a killer, and depending on food options in that city or town, they may not even be necessary. Ask the school for a breakdown of the costs outside of tuition: meal plans, housing, etc. For meal plans in particular, look at the amount per meal you're being charged and ask yourself how likely you are to take full advantage of the plan. It's like MoviePass, the controversial company that lets subscribers go to countless movies each year for a flat fee. If you go to the movies every single week, it's in your best interests to pay the fee and experience some cost-savings. But if you go once every three months, you're getting less value for your purchase than buying a full-price ticket on each trip. The same is true for meal plans; if you're not eating enough meals on the plan to justify the fee, either because you're a foodie checking out local spots or you've found cheaper meals elsewhere, it might be worth your while to take a lesser plan or not have one at all if the school allows it.
5. ... And Housing ...
Housing costs are often the biggest line item outside of tuition when it comes to college. If you've done some planning beforehand, you might have funds already set aside. And if those funds are in a 529 account, unfortunately they must be used for a school-related expense. But if you've saved in accounts without restrictions on their use, looking into alternative housing could be an opportunity to save money. You might find that renting an apartment near campus saves money when compared to the housing fee. Or even better, those funds could be used for a downpayment on a house! I've seen this work firsthand. When I was in college, I had a good friend who was in school at the same time as a few other family members. Rather than pay for the housing costs of multiple children, their family instead looked for property in the area that they could purchase and rent out after they graduated. Rather than accepting their housing costs, they used that same money and purchased an asset that outlasted their college years!
6. ... And Transportation!
You might consider this heresy if you're old-school when it comes to purchasing cars, but it's not always a good idea to buy a car instead of leasing. It's one thing if you can find a solid car that costs little money and can get you from point A to point B. But if you're financing a car at a substantial price, you're basically buying a depreciating asset and either losing money up-front that could have been used for school, or even worse, paying back a CAR loan with a STUDENT loan. And it's not just the cost of the car itself that poses an issue during school; any maintenance that's needed on the vehicle is being paid for with funds that are desperately needed elsewhere. Conversely, leasing a car would require a payment, but it also ensures that if you adhere to the terms of the lease (mileage requirements, etc.), any needed repairs are covered by the dealership. Again, the ideal scenario would be finding the cheapest car possible that won't break down on you; but if you're going to have a payment anyways, consider paying for something that limits your additional costs along the way.
7. Look For Tuition Assistance Opportunities On Campus
Work study. Work study. WORK STUDY! Find opportunities on campus that pay towards the cost of enrollment, be it sweeping floors or grading tests for an instructor. Many campuses have work study opportunities that pay a higher rate towards tuition than what you'd make by finding a random job off-campus. You might even find that their are opportunies for cooperative education, or co-ops. Co-ops provide a structured program where students can receive credits towards their degree for real-world work experience.
8. Apply For Relevant Grants and Scholarships
So you're not likely to get that big football scholarship you'd hoped for. All is not lost; there are other sources of money out there. When she was in school, my wife got a small scholarship for being a left-handed woman. Seriously. There is a $1,000 scholarship issued each year to people who are under 21 and above-average height. The Chick and Sophie Major Memorial Duck Calling Contest offers $2,000 towards the college costs of the best duck caller. The Asparagus Club offers up to $8,000 to students earning degrees in fields that prepare them for jobs in the retail grocery industry. The point is, there are many more scholarships and grants out there in the world than the ones offered by your or your child's institution, and there probably aren't as many people applying for them as you think. Search for scholarship dollars based on your demographics (race, socioeconomic level), your passions (hobbies, arts, music), and even your eccentricities (duck calling)! You might stumble upon some money from your very own version of The Asparagus Club.
9. Diversify Your College Savings
Controversial as it may be, I think 529s are limited in their effectiveness for many households. The problem has nothing to do with the tool itself: any account that is tax-deferred AND doesn't charge taxes on monies used for school-related expenses is a great option. The issue is that oftentimes parents who put money aside for their child's college do so with the intention of paying whatever extra amount is needed when they get there. If those parents are completely secure and on-track with their own finances, this could be a great plan. But statistics have repeatedly shown that the majority of Americans are behind in their retirement planning. Parents who find themselves in this position may be scrambling to find the best way to help their child, while also trying to preserve their own future. The restrictions on eligible 529 expenses, however, can hamstring the ways in which they provide assistance. To avoid taxes and penalties, 529 funds must be used for school-related expenses: tuition, room and board, etc. That means that if a parent does want to look into some of the outside the box steps we've discussed, such as buying a house or leasing a car, they can't use the money in the 529 without paying taxes and a 10% penalty. Additionally, rising costs for schooling have made it unlikely that parents are able to completely cover tuition and fees with the amounts in their children's 529s. These savings can actually work against a student who applies for funds to cover the shortfall, as 529 accounts with significant assets in them can prevent students from receiving financial aid. Establishing savings in other areas that aren't counted against you, such as retirement accounts and permanent life insurance, can preserve your child's eligiblity for aid in the event you can't cover all the costs.