As the mother of two teenagers, news of rapidly increasing college tuition and the threat of high interest rates on student loans have me thinking about how to afford to pay for their education. Juggling the costs of a mortgage, a car payment, the needs of two growing children and various other expenses makes it hard to save for college, too. I don’t want my kids to start their young adult lives with a large burden of debt, and I also don’t want them to have to pay more than they have to as they strive for that all-important university diploma.
After doing some research, here are some outside-the-box ideas on how to go to college for less:
Private schools seem synonymous with expensive tuition, so I thought they may be out of the question – but that’s not necessarily the case. Kevin Campbell, president of College Planning Authority, a college planning company based in Texas, says shying away from private schools because of the sticker price could be a mistake. “If you have a high-performing student who can get into the higher-end schools, they often have excellent financial aid,” he says. “We often send students to private schools for the same or less than a state school.”
In comparing financial aid packages, be sure to ask if the aid is renewable or has any grade-point average requirements so you won’t be caught off guard later on.
On the other hand, Zac Bissonnette, author of “Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents,” says students are most likely to get merit-based aid at schools where they’re in the top 10 percent of the incoming class, which some students wouldn’t want to attend. “If you get into a school that’s sort of a reach for you academically, you’re not going to get much merit aid,” he says. “For most families, the best thing to do will be to pick an affordable, in-state college.”
As tough as it might be to consider being an ocean away from one of my kids for four years, it could be a good way to reduce college expenses. Since college tuition in this country has risen faster than in other parts of the world, some students now choose to attend college in places like England, Scotland or Canada. “Particularly for students looking at international business, I think it starts to make a lot of sense,” says Campbell.
But, he adds, it might not be the best option if your student’s chosen career requires professional certification in the United States. “For instance, if you’re an engineering student, make sure the licensing agency will accept your education from out of the country.”
Plus, if you want to be able to visit often or fly home for the holidays, Bissonnette cautions that travel costs back and forth could also add up quickly while attending school in another country.
Your EFC is calculated based on your answers to the Free Application for Federal Student Aid, or FAFSA, and deducted from the cost of attendance at a given school. If the COA exceeds your EFC, then your student is considered to have financial need, which could boost eligibility for grants, loans and scholarships.
Campbell suggests using an online EFC calculator or working with a college planner who can explain “what assets count against you and which ones don’t.” For instance, investing in a qualified retirement account such as an IRA or 401(k) could lower your EFC, as could having more than one student in college at the same time.
Spending less time in college may help reduce the cost — so it may be worth encouraging your kids to do what they can to earn university credits before they even graduate high school. According to the National Center for Education Statistics, the median time it took for 2008 bachelor’s degree recipients to graduate was just over four years. Almost a third of first-time bachelor’s degree recipients took 49 to 72 months to complete their degrees, so graduating early (or at least on time) could help save money.
“One of the ways to graduate early is to take summer classes through your local community college and transfer those credits,” suggests Bissonnette. Earning Advanced Placement or International Baccalaureate credits during high school can also help, depending on the college’s policies.
Taking fewer credits each semester might allow your student to work his or her way through school and spread out the tuition burden, but unless they’re living at home, room and board could still account for a large portion of college costs.
So, while heading off to college will undoubtedly come with a large price tag, taking a unique approach to funding your kids’ college education could reduce the debt load they have to pay back once they’ve got their diplomas in hand.
Are you planning for your child’s education — or your own? Visit allstate.com/college-savings.aspx for information on starting a college savings account.