Most conversations around college expenses are focused on finding ways to pay for the costs of tuition. These might include building up your savings
, seeking financial aid, and using various sources of lending. However, there are other options that can help cut back on the cost of a college education. A little creativity
can go a long way, and every dollar that you’re not financing means savings in interest and debt down the road.
Consider the Options
According to a report by ThinkImpact
, the average sticker price of tuition at a private college is $38,125 for the 2020-2021 school year, while out-of-state students at public colleges pay an average of $22,698 per year. However, there are potential ways to lower this total cost. Rather than take the traditional route of graduating from high school and immediately attending a four-year institution, here are some alternative options to consider:
• Take a “gap year”.
Many institutions will allow students to defer enrollment
once they’re accepted. This allows for the security of knowing you have a spot while taking time to build up your savings. You could also enroll in night classes at a local college or take online courses during this time to get a jump start on earning college credits. Doing so could mean less money owed in total tuition once you start your official freshman year. If taking a gap year is something you’d be interested in, it’s important to first verify that your desired school offers a deferment option and would extend it to you.
• Military service.
The military offers several programs for students that pay for all or some of their college education. One popular option is the Reserve Officers' Training Corps
(ROTC) program, which prepares students to become Military officers after graduation. ROTC programs are offered at more than 1,700 colleges and universities in the United States. Participants are eligible for a full-tuition scholarship in exchange for a commitment to serve as an officer in the U.S. Military after graduation. There are also five United States Military Service Academies (Army, Navy, Air Force, Merchant Marine, and Coast Guard) which offer free tuition for a commitment to serve after graduation. And for those who wish to serve in the military prior to attending college, the GI Bill
allows Veterans to have the cost of their college education covered post-service.
• Community or Junior College.
An increasingly popular alternative to attending a traditional four-year college is starting off at a lower-cost community college
or junior college
. After completing your Associate Degree, which typically takes about two years, you can then transfer to a traditional college or university to obtain the additional credits necessary for a Bachelor's Degree. If considering this option, it is important to first verify that you will be able to transfer the credits earned at your community or junior college. Since community and junior colleges are typically less expensive than four-year institutions, earning an Associate Degree first can reduce the total cost of a Bachelor’s Degree, since you’ll typically only need to pay for two years of tuition after transferring to the more expensive school.
• Follow an accelerated program.
Many college programs can be completed in two or three years, instead of the traditional four, with correct planning. This can result in a demanding schedule, but the benefit of saving a year or more on tuition may be worth it. An accelerated path will also allow you to enter the workforce earlier and start earning money to repay the debt you accumulate in college.
• Co-op Programs.
Many colleges offer the opportunity to complete a cooperative education program that allows you to have hands-on experience in your desired field before graduation. A co-op is a full-time paid position, and it’s typically done for a full semester instead of taking courses in the classroom. Since a co-op is paid, it allows you to earn money while simultaneously earning college credits. This can allow you to either make payments toward your tuition, or save up money to repay your college debt after graduation.
Plan from the Beginning
In addition to being creative about how you’ll earn your degree, planning ahead
can help, too. Some things to consider include:
• Taking college courses in high school.
Many high schools offer courses in different subjects that can earn you college credits or allow you to fulfill requirements at the college you’ll attend. These are often AP (Advanced Placement) or IB (International Baccalaureate) courses that require students to take a test after completing the course to earn college credit. Some high schools may also have programs set up with local colleges that allow students to take college-level courses while still in high school. These credits could again be applied towards a Bachelor’s Degree when you eventually attend a four-year college.
• Invest in housing. Purchasing a condo
or small home could potentially help you save money you would otherwise spend living in a dorm or student housing. Depending on your or your family’s financial situation, buying a property may be a wise short-term or long-term option for saving on rent, since you’ll be building equity
as you make your mortgage payments. A review of pros and cons of owning a property
can help you decide if this alternative would be a good fit.
• Save early.
Parents who take advantage of state education savings programs such as 529 plans
can invest money for their child’s college education. Opening an additional savings account
is another way for parents or students to put away funds
for college. The earlier these plans are started, the more beneficial they can be in reducing the overall expense of a college education. BankFive’s College Savings Calculator
may be a good resource for helping to create a long-term savings plan. It’s also always a good idea to consult with an investment manager
or tax professional to help you best plan for your financial goals, and ensure that you understand all potential tax implications.
• Have grandparents help with tuition.
If grandparents desire, and are in the position to help their grandchildren with college expenses, there are options available to them that don’t involve giving money directly to you for college. A grandparent can contribute
up to $15,000 annually to a grandchild’s 529 plan
and avoid any federal gift tax issues. Grandparents can also write a check to the college and have it go towards their grandchild’s tuition without gift tax issues
. Ultimately, if you’re considering having family help with college expenses, it is important that you and your family research which option is best for all parties.
• Research discounts and savings offered by institutions.
There are two approaches to this: evaluate the best offers from several schools or, if a specific school is a priority, make the effort to find all potential scholarships and discounts available to you there. There is no limit to how many schools a student can apply to. This gives you the option to see which one offers the best financial aid
packages or scholarships. A school offering a lot of financial assistance may be more attractive to you. It is important to keep in mind the cost difference between private and public institutions, as well as in-state and out-of-state schools. If you’re set on one college, make sure to research all options to cut down on tuition. This might include flexible payment plans you can pay in installments, foregoing optional expenses such as meal plans, and more.
Minimizing college expenses is the first step in managing long-term debt from earning a college degree
. The sooner you can start investing
for college, the better. However, if you can’t avoid taking out loans to pay for a college education, it’s important to establish budgeting
and money management strategies
so you can effectively repay that debt.