Even with all of your savvy college shopping and research about financial aid, college costs may still be prohibitive. At these prices, you expect you’ll need to make substantial financial sacrifices to send your child to college. Or maybe your child won’t be able to attend the college of his or her choice at all. Before you throw in the towel, though, you and your child should consider steps that can actually lower college costs. Although some of these ideas deviate from the typical four-year college experience, they just might be your child’s ticket to college — and your ticket to financial sanity.
Ask about tuition discounts and flexible repayment programs
Before you rule out a college completely, ask
whether it offers any tuition discounts or flexible repayment programs.
For example, the school may offer a discount if you pay the entire
semester’s bill up front, or if you allow the money to be directly
debited from your bank account. The college may also allow you to spread
your payments over 12 months or extend them for a period after your
child graduates. And if it’s your alma mater, don’t forget to inquire
about any discounts for the children of alumni. Finally, ask if some
charges are optional (e.g., full meal plan versus limited meal plan).
Graduate in three years instead of four
Some colleges offer accelerated programs that
allow your child to graduate in three years instead of four. This can
save you a whole year’s worth of tuition and related expenses. Some
colleges offer a similar program that combines an undergraduate/graduate
degree in five years. The main drawback is that your child will have to
take a heavier course load each semester and may have to forgo summer
breaks to meet his or her academic obligations. Also, some educators
believe that students need four years of college to develop to their
fullest potential — intellectually, emotionally, and occupationally.
Earn college credit in high school
By taking advanced placement courses or special
academic exams, your child may be able to earn college credits while
still in high school. This means that your child may be able to take
fewer classes in college, saving you money.
Think about cooperative education
Cooperative (co-op) education is a type of
education where semesters of course work alternate with semesters of
paid work at internships that your child helps select. Although a co-op
degree usually takes five years to obtain, your child will be earning
money during these years that can be used for tuition costs. In
addition, your child gains valuable job experience.
Enroll in a community college, then transfer to a four-year college
One surefire way to cut college costs is to have
your child enroll in a local community college for a couple of years,
where costs are often substantially less than four-year institutions.
Then, after two years, your child can transfer to a four-year
institution. Your child’s diploma will be from the four-year
institution, but your expenses won’t. Before choosing this route,
though, make sure that any credits your child earns at the community
college will be transferable to another institution.
Defer enrollment for a year
Your child might be aching to get to college,
but taking a year off, commonly referred to as a “gap year,” can give
you both some financial breathing room and allow your child to work and
save money for a full year before starting college. Your child will
apply under the college’s normal application deadline with the rest of
his or her classmates and, once accepted, can ask for a one-year
deferment. But make sure the college offers deferred enrollment before
your child goes through the time and expense of applying.
Live at home
It’s not every child’s dream, but attending a
nearby college and living at home, even for a year or two, can
substantially reduce costs by eliminating room-and-board expenses
(though your child will incur commuting costs). This arrangement may
work out best at a college that has a student commuter population,
because the college is likely to try to meet these students’ needs. If
your child does live at home, you’ll both need to sit down beforehand
and discuss mutual expectations. For example, now that your child’s in
college, it’s not realistic to expect him or her to adhere to a rigid
Research online learning options
Taking courses online is a trend that’s here to
stay, and many colleges are in the process of creating or expanding
their opportunities for online learning. Your child might be able to
take a year’s worth of classes from home and then attend the same school
in person for the remaining years.
Work part-time throughout the college years
Part-time work during college can help your
child defray some costs, though working during school can be both a
physical and emotional strain. To make sure that your child’s academic
work doesn’t suffer, one option might be for your child to focus on
school the first year and then obtain a part-time job in the remaining
years. In addition, encouraging your child to become an RA (resident
assistant) at college could earn them free room and board.
Join the military
There are several options here. Under the Reserve Officers’ Training Corps (ROTC) scholarship program, your child can receive a free college education in exchange for a required period of active duty following graduation. Your child can apply for an ROTC scholarship at a military recruiting office during his or her junior or senior year of high school. Or, your child can serve in the military and then attend college under the GI Bill. Your child can also attend a service academy, like the U.S. Military Academy at West Point, for free. Be aware, though, that these schools are among the most competitive in the country, and your child must serve a minimum number of years of active duty upon graduation. For more information, visit your local military recruiting office, or speak to your child’s high school guidance counselor.
Go to school abroad
Foreign schools generally offer an excellent
education at a price comparable to that of an average four-year public
college in the United States. And in the global economy, many employers
tend to look favorably on studying abroad. Your child will even be
eligible for need-based federal student loans (but not grants), as well
as the two federal education tax credits — the American Opportunity
credit and the Lifetime Learning credit.
Look for employer educational assistance
Does your employer offer any educational
benefits for the children of its employees, like partial tuition
reimbursement or company scholarships? Check with your human resources
Have grandparents pay tuition directly to the college
Payments that grandparents (or others) make directly to a college aren’t considered gifts for purposes of the federal gift tax rules. So, grandparents can be as generous as they want without having to worry about the tax implications for themselves. Keep in mind, though, that any payments must go directly to the college. They can’t be delivered to your child with instructions to apply them to the college bills.
How We Can Help
Our advisors at Mission Wealth can help determine how much you should save for college, based on the age of your child/grandchild, what type of college you expect them to go to, and how much money you already have set aside for them.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.