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Cutting College Costs


College costs are going through the roof. The average debt of a student finishing college is almost $20,000! Follow these strategies to reduce the sticker cost of your education.

See also FinAid's tips on budget cutting, Fastweb's article on How to Minimize Student Loan Debt (summary) and Google's TipJar.

Tip 1: Ask about application fee waivers and special discounts

The cost of applying to college, taking standardized test scores and having those scores sent can really add up. If you're strapped for cash, consider asking about application fee waivers. But keep in mind: Availability is limited, and you must meet some pretty stringent standards to qualify.

Some schools offer special discounts for legacies (children of alumni), when more than one member of the same family is enrolled at the same time, or for children of employees.

Tip 2: Apply for financial aid

Even if you think you're not eligible, be sure to apply for financial aid by filling out the FAFSA (Free Application for Federal Student Aid). This form is the first step for applying for all kinds of aid, from federal aid (grants, loans and work-study), to state-based funding (grants and other programs), to college-based aid (special awards, grants and work-study programs). And who knows, you just might qualify! [This tip is for US citizens only; International students should visit EduPASS.]

Tip 3: Search for free money

And since every little big counts, you should also apply for scholarships. Use the scholarship search to help you find awards and then apply! To learn more about all your funding options, visit FinAid's scholarships section.

Tip 4: Complete some of your credits at a lower-cost school

You can save a lot by completing your general education requirements at a community college, state university, or less expensive school and then transferring to complete the degree. A less competitive school may offer merit aid to attract talented students. For in-state students, public colleges cost about half of private colleges when one includes all costs. Community colleges cost even less. (Of course, the more expensive colleges provide more financial aid to compensate for the higher cost, but if you don't qualify for financial aid, a community college can be a much less expensive way of getting a college education.)

Using the data analysis system for the Beginning Postsecondary Students Longitudinal Study (BPS:96/01), Mark Kantrowitz found that 62.2% of Bachelor's degree recipients who started off at a 4-year college and never transfered graduated with cumulative debt of $22,620 on average. (Adding students who transfered from a 4-year college to a 4-year college brings the figures to 63.3% and $22,461. Cumulative debt includes Stafford, PLUS and Perkins loans but not private student loans.) This compares with 61.4% of students who transfered from a 2-year college to a 4-year college graduating with cumulative debt of $16,091 on average. Thus students who transfered from a 2-year college to a 4-year college graduated with a Bachelor's degree and $6,529 (28.9%) less debt than students who started at a 4-year college and never transfered. The savings is about 2 to 3 times the difference in tuition rates at the 4-year and 2-year institutions.

Talk to an admissions counselor to be sure your credits will transfer, and learn as much as you can about the financial aid policy. Some schools restrict financial aid for transfer students, or may only have financial aid for students who transfer at the beginning of the academic year.

There are, however, risks in starting off at a 2-year college with a goal of transferring to a 4-year college. Students who start off at a 4-year college are more likely to attain a bachelor's degree and to graduate sooner than students who start off at a 2-year college. Similar results hold true for the choice between a 4-year public college and a 4-year private non-profit college. A September 2008 paper by Bridget Terry Long and Michal Kurlaender of the National Bureau for Ecomonic Research (NBER 14367) showed that students who start at a 2-year college are 14.5% less likely to complete a bachelor's degree than students who start at a 4-year college. A March 2009 paper by Natalia Kolesnikova of the Federal Reserve Bank of St. Louis (summary, pdf) demonstrated a persistent salary gap of about $2,268 among students who received a Bachelor's degree but started off at a 2-year institution instead of a 4-year institution.

Starting off at a 2-year college saves several thousand dollars in college costs as compared with starting off at a 4-year college, but students who start off at a 4-year college are more likely to graduate with a Bachelor's degree. In addition, the higher salaries earned by students who obtain a Bachelor's degree after starting at a 4-year college instead of a 2-year college pay for the added cost in only 3 years. A better strategy might involve enrolling at a 4-year college but taking courses at a community college during the summer to save a semester or two at the 4-year college.

Tip 5: Get to know the financial aid administrator at your college

While specific rules apply for financial aid calculations, financial aid administrators still have a certain amount of leeway in determining how aid is allotted. It's important to let your financial aid officer know about any special circumstances that affect your ability to pay for college.

Tip 6: Look for ways to pay in-state tuition

Most public colleges and universities charge considerably less tuition to in-state students in comparison to students from out of state. Pick a college in your state to keep costs down. This is one of the most effective ways of saving on college costs as compared with an out-of-state public college or a non-profit college.

If you are considering an out-of-state public college, investigate regional student exchange programs, in which some states offer reduced tuition rates for students from nearby states.

Or if your heart is set on going out of state, consider moving a year before starting college. After you've established residency (usually one or two years), you should be eligible for in-state tuition. Policies vary from school to school and state to state, so be sure to check with your school of choice.

Tip 7: Accumulate credits before college

You'll save a lot in tuition by earning college credits while you're still in high school. Take Advanced Placement courses or think about taking courses at a local community college to get a head start on your college career. You may be able to place out of required courses by taking an "advanced standing" exam at the school.

Tip 8: Combine degrees to save time and money

If you're planning to earn multiple degrees, you can save a year's tuition by enrolling in a combined degree program. Some schools will allow you to combine a bachelor's degree with a master's degree or a master's degree with a doctoral degree. Some colleges may offer a program that combines a bachelor's degree with an M.D.

Other colleges offer an accelerated 3-year program, or will allow you to graduate early if you complete all the requirements ahead of schedule. You can do this by taking a somewhat heavier load, such as an extra course every semester, or by taking classes during the summer. Some schools do not charge extra tuition for taking additional classes.

Tip 9: Live at home during college

You can save a lot if you live in your parents' home when you go to college. You might miss out on some 'classic' college experiences, but your food and housing bills will be a lot lower. Or if you really want the residential college experience, compromise by spending some years at home and some years living on campus.

Another method of saving on housing is to share an apartment with some fellow students, especially if you plan to work near school during the summer. But be sure to select your roommates carefully!

On the other hand, commuting to college can be stressful due to late busses, heavy traffic, and the occasional car trouble. Keep in mind that you will learn more from your fellow students than from classroom lectures. So this may be one cost-cutting measure you choose to overlook.

Tip 10: Save on Textbooks

Textbooks add up to $1,000 or more a year to the cost of a college education. You can save some money by buying used textbooks, which often cost half the price of a new textbook. If you buy new textbooks, consider selling them back to the bookstore at the end of the semester. Get a copy of the class syllabus early, so you can shop around on the internet. (If the syllabus doesn't list the ISBNs for the books, you can find them on the publisher's web site. Also look on the publisher's web site for alternate formats that are less expensive, such as softcover editions and ebooks.)

If the course only uses a chapter from a textbook, consider using the copy that is on reserve in the library. One caveat: Sometimes the library copies go "missing". Sharing textbooks with a roommate or a friend is also potentially problematic, since you may both need the book at the same time.

If the faculty always gets the latest edition of a textbook, compare it with the older edition. Sometimes the changes aren't significant enough that you need to get the new edition, and older editions are often much less expensive on the used market. Or ask the faculty to consider using the older edition for a few more years.

Also ask faculty who use just a chapter from each book to look into custom publishing. Some publishers will assemble custom "Readings in XYZ" compilations or unbundled unnecessary features, saving the students money compared to buying the individual textbooks. Or the local copy shop can photocopy the chapters, so long as they pay the appropriate Copyright Clearance Center fees.

One problem with ebook rental is you can't keep the ebook after the end of the school year, and the cost of an ebook may be higher than the net cost of buying a print edition and selling it back to the bookstore at the end of the semester.

If your actual costs for textbooks exceeds the allowance that is in the college's official cost of attendance figures, consider asking the financial aid office to use professional judgment to adjust your student budget to reflect actual costs instead of average costs.

Tip 11: Apply for 'life experience credit'

If you're entering school from the work force, you may be able to earn college credit for your employment and life experience. Some schools administer their own tests and standards while others allow you to take CLEP (College-Level Examination Program) and Proficiency Examination Program (PEP) tests for college credit.

Last Tip: A bunch of random tips

Get a part-time job. Consider cooperative education programs and study abroad. Sell your TV and VCR. Visit home less frequently. Some schools give Resident Assistants free room and board. If you're a US citizen, consider ROTC or other forms of military aid. Eat a full meal before going shopping for groceries.

Keep costs down and maximize your financial aid, and you'll look forward to graduation day all the more!


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