How to Pay for College
There’s no overstating how expensive it is to get a college education, and the costs are only going up. Tuition alone can easily surpass $100,000 at a four-year school, and that doesn’t include textbooks, supplies, or even food. So how do you pay for it? Check out the list below for some ideas, ranging from traditional to well off the beaten path.
The Traditional Routes
Here are some of the tried-and-true methods to help you pay for your child’s schooling:
- Scholarships: If your child is a good student, scholarships are a great way to reduce or even eliminate tuition costs. But don’t just look to the college or university for scholarship offerings – many organizations offer scholarships for all kinds of achievements, including academic success, dedication to volunteer work, and performances in extracurricular activities.
- Financial aid: Both federal and state governments offer need-based financial aid to students. They come in two forms: grants, which don’t have to be paid back, and loans, which do.
- Student loans: If your child isn’t eligible for a scholarship or financial aid, or if you need additional money to bridge the gap between an award and the total cost of tuition, you may have to turn to a student loan. These loans don’t accumulate interest until students finish their education. Be careful how much you borrow, though. Your child will have to start paying it back as soon he or she enters the workforce.
Reduce Your Bill
Fortunately, the traditional ways to pay for college aren’t the only option for affording college. The following are ways to reduce the amount you and your student have to spend out of pocket:
- Live at home: Room and board can cost as much or more than tuition, so if you have a college or university nearby, your child might consider living at home while enrolled. It could save you quite a bit of money over four years if you will be footing your child’s room and board.
- Attend community college: Community colleges are usually much cheaper than four-year schools, and the credits are easily transferable. A community college is a great place to get general studies requirements out of the way, leaving the more important courses for a major area of study to a larger, more prestigious four-year school. Your child’s diploma will have the four-year school’s name on it.
- Accelerated learning: There’s no rule that says college has to take four years to complete. Taking courses outside of formal college enrollment can save your child some time and tuition money. This can be done in high school through AP courses as high scores on AP exams usually translate to college credit. Some high schools even offer classes directly connected to state colleges and universities that earn actual college credits upon completion. If this isn’t an option, your student could maintain a heavy course load during his or her whole enrollment. If most students take four or five courses, yours should consider taking six, if he or she can handle the extra work. Summer courses can also help students finish early, which will cut back on their total room and board costs.
- Look abroad: Studying abroad doesn’t have to be limited to a single semester, and extending a stay could save a student quite a bit on tuition. Some international colleges cost much less than U.S. schools.
- Bargain: If your student is lucky enough to be admitted into more than one school, compare each offer. Use any scholarship offers or other tuition reductions to negotiate a better price at your student’s top choice. It can’t hurt to try, and success is actually fairly common with this method, especially for students with the best academic records.
Get Someone Else to Pay for It
Why should you take on the entire financial burden for college? Here are some options to take the load off you:
- Benefactor organizations: Many organizations will offer students money toward college tuition, but it doesn’t come without a price – your child will have to commit to a few years of service. Some of these organizations include AmeriCorps, Peace Corp, and ROTC programs.
- Employer reimbursement: This one's more for graduate students but may apply to some special undergraduate cases as well. Some companies will reimburse tuition costs when students get good grades and are taking classes that are relevant to their current position.
- Military school: This option comes with a commitment as well but tuition is completely free if your child is willing to serve in the armed forces for a few years. These schools aren’t easy to get into, though, and most are more selective than your average four-year school.
Get Prepared Early
Another key to paying for college is preparing for it, and the earlier the better.
- Save, save, save: Start setting aside money as early as you can (if you still have years to go before your child goes to school, consider opening a 529 plan). The earlier you start, the more interest accumulates, and the less you have to put aside out of your own pocket. Plus, each dollar you pay upfront is one less dollar that needs to be borrowed in a loan. This will save your student money on interest payments down the line when the loan has to be repaid.
- Set up a payment plan: Check with the school to see if tuition payment plans are available. Most schools have them, and they allow you to spread the cost of enrollment over an entire year or semester instead of requiring one lump sum payment up front. This makes the expense easier to handle and reduces how much you and your student need to rely on loans.
With college being so expensive, it definitely pays to get creative in figuring out how to cover your tuition costs. Following the above tips will help you give your child an education without the two of you going broke.
|Infographic: College Expenses © CreditDonkey|
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Leah Norris is a research analyst at CreditDonkey, a credit card comparison and financial education website. Our data-driven analysis has been recognized by major news outlets across the country and has helped families make savvy financial and lifestyle decisions.