Ways to Reduce College Costs

The costs of college can be shocking. CollegeBoard.org can give you an idea. You will want to consider total costs, including tuition, room and board, books and supplies, personal expenses, transportation, etc., which vary greatly per state, and what kind of college you and your child can afford.

How can students reduce costs?

There are many loan and grant opportunities. Work with a Money Coach to explore your unique needs. We can help you understand your options to start your college savings early on in your financial journey.  But if the clock is running out, there are other things you can consider to reduce costs.

Options You Might Consider

• Take AP courses and their exams in high school.  Most colleges offer credit for qualifying scores on the AP exams.
• Live at home and commute to school if it is close by.
• Use community college as a stepping stone, which has relatively low tuition costs, then transfer to a 4-year college to receive your bachelor’s degree. You could even take courses over the summer – just make sure the credits will transfer.
• Work over the summer and during vacations to help pay for some of your college expenses.
• Work/Study programs are offered at many schools.  Universities can offer these programs where you can work in between classes and not usually more than 10 hours a week. The government also offers Federal Work-Study Programs. In most cases, you will have to submit a FAFSA application.
• Get scholarships and grants. Scholarships are offered by nonprofit and private organizations to help students pay for college. Think of this as a potential source of money, which is sometimes based on academic merit, talent, or a particular group to whom they want to award the scholarship.  A grant is a form of financial aid that doesn’t have to be repaid unless you don’t finish college. Applying may seem like a laborious process, but many grants and scholarships go unclaimed each year. To see what you could qualify for, go online to websites like CollegeBoard.org. Your financial aid office at the school you are accepted to and your guidance office at your high school may also help you through this process.
• The Pell Grant is need-based federal financial aid for undergraduates from low-income families. You don’t have to pay the money back.  If you want to apply for a Pell Grant, you will need to submit a FAFSA application.
• Look into private loans. These are loans that you or your child can obtain from banks and credit unions.  They usually are more expensive than government-funded loans.

Free Application for Federal Student Aid (FAFSA)

The FAFSA applications open each year on October 1. The goal of filling out all of this paperwork is for the government to figure out what you and your child can afford to contribute to college costs.  They will calculate the EFC (Expected Family Contribution), which is an amount that colleges use to help them decide how much financial aid they will offer your child.

Below are steps and pieces of information you may need to complete the FAFSA.

• Create an FSA (Federal Student Aid) account. You need this to complete the FAFSA process on fafsa.gov.  Set this up early to avoid any delays in the process.
• Social Security Number. Parents and students need one for the FAFSA form.
• Driver’s License. If you don’t have one, don’t worry.
• Your recent tax records. You (and your parents if you are a dependent student) will need to report your income.
• Records of your untaxed income, for example, child support and interest income, among other things.
• Records of your assets. This includes savings, checking accounts, investments, such as stocks and bonds, and real estate (excluding your primary residence).
• List the schools (up to 10) you want to attend. Even if your child has neither applied nor has been accepted, FAFSA wants to know the schools your child is considering.  The schools listed will automatically receive the FAFSA results.  If you don’t list a school, you could miss out on financial aid opportunities from that school.

A Final Thought

There are lots of ways that you or your child can pay for college.  We know that there is nothing more important to you than your kids.  You would do anything for them.  We also hope that you have been saving for college and for your retirement.  Many retirement plans allow you to borrow from them to help with expenses like college. That said, keep in mind that your kids can borrow to pay for college, but you can’t borrow to pay for your retirement.  There may also be tax implications for taking certain actions, and you may qualify for educational tax credits, so be sure to review your situation with a tax expert.  Talk with a Money Coach about planning for multiple goals so that you can balance how to pay for college along with other financial needs.

About the Author

Neale Godfrey is a New York Times #1 Best Selling Author of 27 books on empowering families (and their kids) to take charge of their financial lives.

My Secure Advantage, Inc. or any of its representatives do not endorse any of the websites or company names listed here. Information provided in this article is for informational purposes only and is not intended to offer specific personalized investment, financial planning, tax, legal, or accounting advice.  We recommend that you consult an attorney, tax advisor, or accountant regarding your unique circumstances.