Saving Money on College Expenses
Yesterday, I read an article about a woman who had accumulated $555,000 in student debt. Originally she took out only $250,000, but fees and interest have more than doubled what she owes. You can read more about her cautionary tale here. Her story caused me to reflect on how blessed my children will be to graduate without any debt.
I know that a lot of parents are worried about how they are going to pay for college since tuition is rising and income is declining. Many parents lost quite a bit of their savings in the stock market last year, but have an annual income that will prevent their children from receiving financial aid. So I thought I would share some steps we have taken to save on college expenses.
First, I should let you know that we have saved for our children’s education. However, we have decided not to use it and instead keep it as an emergency college fund, should our financial situation change. Furthermore, our children do not qualify for any financial aid, are not talented athletes, and lack diversity on their ancestral tree. I told my daughter to look into scholarships for the children of veterans. She came back and said, “I meet all of the requirements except one, my dad is still living”. That put scholarships into perspective for us: We are thankful that our children do not qualify for many of the scholarships that are available.
Steps we have taken to save on college:
1. First, look into the requirements of all of the colleges your child is or may be interested in attending when they first enter high school. This is easily done online. If a college has a requirement for a certain level for foreign language, you can save money and time by meeting that requirement in high school. Also, if your child meets or exceeds their requirements, they are more likely to receive school based scholarships.
2. We allowed our children to begin taking classes at a community college their junior year of high school, instead of taking A.P. classes. We did this because medical schools do not accept A.P. credits, so they would have had to retake any A.P. classes at the university. One perk to taking community college classes while you are in high school, is the tuition is often greatly reduced and in some states it is free.
3. My daughter accumulated over 24 credits at the community college while in high school, which meant that she qualified for transfer scholarships in addition to the scholarships for recent high school graduates.
4. Take advantage of local universities. The cost of room and board is much greater than tuition and books. If your child can live with you, it will greatly reduce the expense of college. I know many say that it is uncool to live at home while you are going to college, but when I was young it was really uncool to live with your parents after you graduated from college, something many college graduates are forced to do because they cannot afford rent and loan payments.
5. Make sure your child knows that they are in college to get an education. Scholarships require that students maintain a certain G.P.A. to continue receiving funds. It is not unreasonable for you to let your child know that if their g.p.a. slips below a certain level that your contribution will stop. My rule is that I will only pay for a class once. If they do not pass or they choose to drop a class past the refund date, they must pay for it the next time they take it.
6. Most universities will help match students to scholarships. Often, you can request to be put on a mailing list when new scholarships become available. There are many scholarships available through companies that are based on a written essay rather than income or grades. If your child balks at writing an essay, tell them to do the math: “$1000 scholarship, 4 hours writing an essay, can you find a job that pays $250 an hour?”
7. Look at the terms of scholarships carefully. One of my daughter’s scholarships says it is for 10,000.00, but she can only use $1,000.00 per semester for 5 years. Because she arrived at the university with a year’s worth of classes under her belt, she is on the 3 year plan, so it seemed like she wasn’t going to fully benefit from this scholarship. However, the terms of the scholarship allow her to apply $1000 towards summer classes each year. So she takes one or two easy classes each summer using this scholarship, which also reduces the load she must carry in the fall and spring semesters, making it easier to maintain her G.P.A.
8. Do the math on scholarships. My daughter could easily have received a scholarship for $500.00 per semester to play in the school orchestra. The stipulation was that she would have to show up for rehearsals, play in performances, and practice at home. We figured that she would spend approximately 10 hours per week on these activities. This means she would have earned approximately $3.00 per hour on this scholarship. Now if she had been a music major, she would have been required to participate in the orchestra and the scholarship would go towards an activity that fulfilled a requirement. But she is a BioChem major, those 10 hours would come at the expense of studying for other classes and so she would have had to quit her job tutoring where she worked 10 hours a week and made a little over $10.00 an hour. So accepting that scholarship would have been a net loss of $7.00 per hour.
9. Encourage your child to get to know their professors. This is possible even with a class size of 300 students. Teachers remember students who are interested and do well in their classes. Every job my daughter has held at the university was because a teacher let her know of an opening and recommended her for the position. (At this point most of my daughter’s earnings are going into her own education fund).
10. Take classes at both a university and a community college. Most of my daughter’s scholarships require her to be enrolled for 12 units at the university. Most semesters she has taken between 12 – 13 units at the university and then taken one lower division class at the community college. She meets the requirements for the scholarships and the one class that we pay for out of pocket is a fraction of the cost of a university class.
11. Start taking classes at the university as soon as you have met the prerequirements. My daughter has some friends that are staying at the community college until they complete their A.A. and then transferring to the university. The problem is that with class cut backs, some of the university classes are only offered once a year or every other year. For many majors, upper division classes must be started in your sophomore year to finish in 4 years. So if your child stays at the community college for 2 years to finish their A.A., they might still end up spending 3 years at the university completing their degree. Unless your child is in a special program (i.e. nursing, police, fireman, dental hygienist, etc.) or in certain states (like Virginia which has a 2 +2 program) it does not make sense to tarry at a community college.
12. Whenever possible, we buy used books from Half.com or Amazon.com and then sell them back for close to what we paid. If we have to buy new books, which sometimes happens with new editions, we go through a discount bookstore like Barnes and Noble.
13. Pack a lunch, a water bottle, and BYO coffee. Cafeterias have given way to major food chains who overcharge students for their legal stimulants.
14. When a company sends my daughter a student loan application, I show it to her and say, “this is what we do with credit card and loan applications” as I send it through the shredder. Technically, I am probably guilty of tampering with mail, but really I think these companies who prey upon young people are committing a crime!
15. Go with your child when they enroll. When my daughter was in line to get her student I.D. card, a bank representative approached her and offered to make her I.D. card a bank card and then offered her a credit card application. All of the students who were by themselves started filling out the applications, all of the students who were accompanied by their parents looked at their parents, who gave a quick shake no, and then politely refused the offer. I know a lot of parents think that since their kids are 18, they need to make their own decisions, but I think college students can benefit from a little guidance on financial matters.
I know that these suggestions will not work for every family, but they are helping us in our goal to have our children graduate from college debt free. And if we don’t have to use their emergency education fund, perhaps with a little nest egg, as well. To see what is working for other families, visit Works For Me Wednesday.
This is an excellent list of tips! Wow, thanks!
I am sending a link for this to my son and husband — great advice! With Cy in 9th grade, we're starting to think about the college options. I believe I'm even going to bookmark it to refer back to again and again.
I especially love hearing about the time commitment required for the $500/semester scholarship that would end up being $3/hour invested. Good considerations to ponder!
Another thing to think about is the National Merit Scholarship. It is based on PSAT test scores. Your child takes the test in the fall of their junior year. If your child is homeschooled, you need to call the local school district to find out when they administer the test and if you need to fill out any paper work or pay a nominal fee for your child to take it.
Alea, you amaze me with your knowledge. These are some awesome tips. Thanks so much.
Those are great tips, although I'm not quite in the save for college mindset… Hubby is just finishing his thesis and we'll be paying on his student loan. Luckily it is under $10,000.
In this day and age, $10,000 in student loans is nothing. Most of my kid's friends accumulated more than that in their first year of college!
Alea- This is a great post. It amazes me that people assume getting an education should cost tens of thousands, and makes me depressed for how many people then decide that's out of the realm of possibility for them.
Your children are indeed blessed not to have the debt- I had a modest amount (by today's standards) of debt from graduate school and I'll be in my 50s by the time I pay it off. That makes me furious, and that money should be going towards a retirement account. I don't think a decision I made when I was 22 (and not a foolish one!) should be affecting me financially 30 years later. I had no idea that I would end up repaying 3 or 4 times the amount I originally borrowed.
We were college virgins last year. The FAFSA and the loans we had to take out to make up the difference. I have a hard time with that part: all my friends who went to college 20 years ago got loans for themselves in their names for 3%. Now my husband and I had to take out a loan to finance what she didn't get in scholarships for almost 4% more than my home loan-I'm not benefitting from her college education! Everyone preaches how kids need a college education-but don't offer help on how to do it. Thanks for your tips
Great suggestions. I would also add that you should speak with the financial aid office at the university. Often, you can get some free grant money for a while. I would also recommend looking into the school Distance Education program. If you can take some classes online (such as sociology, humanities or any other gen ed requirements) then you can save money. Online classes are much cheaper than campus classes and they fill the exact same requirements. AND when you order your transcripts after you graduate, they will not show up as online classes. They are normally listed like a regular class, so you won't have to worry about transfer problems after you graduate. If your university doesn't have DE classes, then check out a community college. Before you sign up, make sure they will transfer back to your main school.
Of course, each place varies, but it's definitely worth checking out. At my college, DE classes are 1/2 the price of on-campus classes.
By the way, I just stumbled upon your blog. Great stuff! Will check back often!
Tamilyn-
I find it shocking to see the number on the FAFSA form for our "contribution". Each time they have given a number around $30,000 that they say we can contribute. I am very frugal and their is
NO WAY I could squeeze $30,000 out of my budget!
Going Green-
Thank you for adding your suggestions! I think we will look into DE for my son, not only because it less expensive, but he prefers internet courses that he can do at his own pace.
Excellent suggestions! I'm returning to college this fall and your tips are really helpful.
On thing your kids might want to look into, although I don't know that they'll qualify, is the Individual Development Account. They match every $1 I save for education with $2, so my $2,000 will get me $6,000 in tuition, books, and a laptop.
And a nice feature of the new credit card bill is that they can't give a card to people under 21 without a co-signer, so no more predatory credit card lenders in the ID lines!
Thank you for the tip; I will look into the Individual Development Account!
This is a thoughtful article with lots of good information. Now that my grandchildren are getting old enough to start thinking about post secondary education I’m sure that your suggestions will be helpful. Thank you.
At chegg.com you can rent text books for much less. You just keep track of the box you received the books in to return the books when the semester is over. Very easy.
Very good to know! I still have 2 more children to put through college. Thanks for sharing the link.
Excellent tips and reminders, esp. about really counting the cost/benefit of a scholarship.
#11 is a very key point.
I’m all for taking college classes early via dual enrollment – or at least college-level work via AP or whatever is possible at your school.
But I have heard of students running into problems with finishing at four years under a transfer situation. And it is not necessarily the community college’s or university’s fault: It’s a simple matter of when certain courses need to be taken to meet the degree requirements.
That sequence does not always mesh neatly when classes and credits from multiple schools are involved.
Outstanding post. We have 1 graduate with lots of debt and no job. We have one junior with lots of scholarships and low debt. But now our job circumstances have changed and our 2 youngest will be facing money challenges. Your tips are terrific. My 3 oldest have all done the AP class thing with the thought it will make them more attractive to colleges, but after reading your post I just discussed the community college issue with my youngest, and though she is a rising sophomore we’re going to look into starting this summer (while the algebra is fresh, before calc next year, lol). Thanks so much!
This is an excellent post. You have really shown good ways to take advantage of all the options available and you’ve included some great all round tips as well. Sadly here in the UK the university application process is all controlled by UCAS (a government agency) and proper academic scholarships are virtually non existent. Aside from everything else, I think scholarships encourage young people to work harder and to present themselves more positively (via the essays etc). Hopefully one day things will change here!