10 Ways to Reduce the Costs of College & Save Up

If you haven’t checked the price of college lately, they’re pretty shocking. The cost for in-state tuition & fees at a state university is typically between $10-15K/year (depending on the state). Add in Room, Board, Books and other costs, and the cost can easily double. Private university tuition & fees average about $40K/year. Add in room, board and books and you can end up at about $60K/year, or more.

If you’re a parent that wants to pay for college, or at least help out with the cost, the time to start planning is well before your kids are in High School. Unfortunately, that’s when it dawns on many parents that they need to start thinking about college & costs. Ideally, one would start saving when they’re very young, preferably right after birth. The more years you have to save, the more years that compound interest can work its magic. A quick example would be saving $250/month (about $3000/year) starting immediately after your child is born. If you invest that money for 18 years and earn an average return of 8%, you’d have $112,000 saved by the time that child was ready for college. But let’s say you waited until they were 7 years old to start saving and you saved that same $250/month. Then you’d have $50,000 saved for college. So that 7-year delay, cost you $62,000 in savings. Big difference! But most parents don’t think that far ahead, or just weren’t able to save when their kids were younger.

It’s not surprising that, with costs that crazy & parents often not saving up or not saving up enough to pay for it, that students are taking out an ever-increasing amount of student loans. Either that, or they’re not able to attend college at all. So, isn’t there a better way? Isn’t there a more cost-effective way to attend college?

There certainly is a more cost-effective way! The first thing to do is to plan out your strategy for college and communicate EARLY with your kids. If everyone knows the plan, then you’re less likely to get thrown off when friends, college counselors and family members start critiquing your plan. There are many voices out there that will tell you that it’s “important” that your kids attend their “dream school”. That it will somehow be crushing if your kids don’t attend the perfect school for them. That’s total nonsense, but that’s what kids start hearing once they enter high school. Although college is a fun time, and a time for kids to grow up and start making more decisions about their lives, it is an investment. It’s an investment in their growth as a person and it’s an investment in their career. If you spend $100-200K on your kid, I think we should expect more than our kids lived out a 4-year dream. I think we should expect that, along with any extracurriculars that they’re able to enjoy, that our kids will develop knowledge and skills that will help them land a good job. A good job, btw, that doesn’t have to be used for a decade (or more) to pay off student loans. Debt free college is a REAL gift to your kids, and I don’t mean that parents should be paying the debt off. Avoid debt by keeping your costs down & saving as much as possible.

Here are 10 tips on how to keep college costs down:

#1 – Make use of high school Dual Enrollment programs and AP courses to get high school credits that can also be applied to college. If you make full use of these programs, it’s possible to get one, or even two semesters of college credits while still in High School. That would reduce your college costs by 25% by eliminating semesters! Note: AP courses require passing a test to get the credits. The great news is that these courses are often free or have nominal costs. Talk to your high school about their Dual Enrollment & AP class options.

#2 – Attend community college for 1-2 years. Attending a local community college to knock out the basic required classes is very cost effective. The average cost of a community college is $3500/year. Compared to most 4-year universities, that’s a bargain! So, combining a year of credit from Dual Enrollment/AP courses, plus a year of community college gets a kid through two years of college credits for about $3500! Even with no dual enrollment credits, two years of community college is only $7000. People often turn their noses up to community college. But if you don’t have the money saved for college, is it better to run up an extra $30-50K in student loans? Or is it better to make use of your local community college? If you do go the community college route, just check, in advance, and make sure that the community college credits are going to all transfer to your chosen 4-year university.

#3 – Attend a state university. Typically, state universities cost 1/3 to 1/2 as much as private universities. And they’re good quality educations! Frankly, not many professions require a name brand university to be on your resume. I’m going to qualify this a bit, because some private universities (not all) do offer generous scholarships based on need or for excellent academic performance. So it’s OK to apply to private universities, but it’s important to look at the final costs & scholarships sent by the university.

#4 – Apply for and get scholarships. The first place to look for scholarships is on the university website. Often there are academic, needs based, special talents, demographic, or other scholarships available. And some scholarships can just be offered by the admissions department because they want to. My son wanted to attend a private university. Full price, it was over what we were willing to pay. So, we told our son that he needed to get scholarships if he wanted to attend that school. The problem was that he didn’t seem to really qualify for anything, based on what we were reading on the website. So, when he went to visit the school, I told him that it was a business trip. His job was to get to know everyone in the admissions department & let them know how much he wanted to attend their school…. and btw… that he was going to need scholarships to be able to do so. He ended up getting two scholarships for several thousand dollars. He didn’t even fill out an application for one of them, which clearly was given as a discretionary scholarship by the Admission Department. Networking can be quite effective! Otherwise, there are lots of scholarships offered from other sources like private companies, foundations/non-profits, community organizations, etc. There are also several websites, such as myscholly.com that aggregate many of the scholarships available. If your kid wants to attend a college that you can’t afford, then give them the responsibility to find the scholarships.

#5 – Compare the costs of living on campus vs. off campus. Although many schools may require living on campus for freshman year, that can often be waived. And, depending on the location, it can often be significantly cheaper to rent an apartment off campus vs. living on campus. So, teach them to cook their own food and how to shop in a grocery store. Then you can save yourself the cost of a meal plan which can run as high as $15, or more, per meal. Find a roommate, or three, and save even more!

#6 – Commute to a local state university. If you live within driving distance of a university, save yourself the cost of room and board, which often doubles the cost of attending. The full “going away to college experience” is great, if you can afford it. But again, keep in mind how much student loan debt will impede your kid’s young adult life.

#7 – Shop for used books or rent books. Full priced books can set you back hundreds or even a couple thousand dollars a year. You can shop for used books or rental books at locations like Amazon or Chegg. When you’re done with them you can return rentals or sell the books you purchased. Note: some books require a code for on-line access. It’s a trick the publishing companies are using to force people to buy new books to get the online code. But we were able to save quite a bit of money buying used books and by renting books.

#8 – Avoid going overboard with shopping for supplies and incidentals. There are things you kid needs like basic school supplies, bed linens, towels, cooking utensils, perhaps a grocery run, etc. But there are plenty of things that people purchase that are unnecessary and expensive. A college student doesn’t “need” to professionally or expensively decorate their dorm room or apartment.

#9 – Leave the car at home, or better yet don’t get a car for your kids at all. Most universities are walkable, or at least bikeable. Car costs include, along with the cost of the car, university parking passes, gas, insurance and repairs. Many insurance policies allow you to suspend your insurance & payments if you park the car at home while your kid is away at college. For the average person, not having to maintain a car at college is going to be $300-400+/month savings. They can catch rides around town and back & forth to home with their friends. Sure, they should help with gas, as needed. But it’s going to still be much cheaper. Worst case, if they can’t find reliable rides to & from home during breaks, maybe you need to drive them to & from school when needed.

#10 – Get a job! Kids can help with college costs & pay for their own incidentals with a part time job. A college student isn’t attending class & studying 7 X 24 X 365. The typical college day includes, at most, 3-4 one hour classes. There’s LOTS of free time for studying. Please don’t be the one to say that their job is to get good grades. A 15-20 hr/week job will not cause them to get poor grades. Kids that have jobs often are more organized and are statistically more likely to get good grades, then those that have a little too much time on their hands. Now, if they have a $20K annual scholarship riding on their excellent grades, I’m willing to reconsider. But, even then, a 10 hour a week job should not have a negative impact on their studies.

I’m going to pause for a second here because some people are going to object. Maybe you don’t think it can be really done. Maybe you don’t think that the “experience” will be good enough. I can tell you that one of my client’s daughters did exactly this. Her Mom had her at 16 years old and has struggled financially. Therefore, there were no savings for college. So, her daughter planned out her strategy & did exactly as I noted above. One year of dual enrollment credits, one year of community college & two years of state college while living with a relative. Total cost-$25K for her degree, for which she worked and saved up to pay. Was she happy about it? I asked her that question. She said that initially she was upset about it. So, no lies being told here. She wasn’t happy when she got the news that she was all on her own for this journey. But that changed as she started working the plan. Currently she’s about to start her last semester in college. She’s extremely proud of the fact that she’s paid for her own education & hasn’t taken out a dollar of student loan debt. Her final two years, at a state university, have been a really great experience for her. So, she hasn’t missed out on anything. And she’s gained the knowledge that she can plan, work hard, save up & pay for a very important thing in her life. That’s going to serve her well going forward.

So, if a person in her circumstances can do it, so can anybody. But don’t wait! Whether you have a newborn or a senior in high school, the time to put together a plan is NOW!!!

If you want some help putting together a college plan, or want to figure out how you can budget effectively to save up money for college, you can click here to setup a Complementary Consultation. We’ll get to know each other and see if financial coaching is a fit.

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