5 Ways to Make College More Affordable
If you’ve read any recent news about the financial details of college education, you’ll know that it’s also a foreboding prospect: there is nearly $1.3 trillion in total U.S. student loan debt, ongoing wage stagnation, and the prospect of enduring years of underemployment.
But it’s not all bad news. A notable paradigm shift is taking place: this year, a whopping 98% of current students are actively engaging in ways to make their education more affordable.
So how does a student and their family better prepare themselves? Here’s our list of the top five ways families can make college more affordable:
1. Save early and save often.
Recent research has shown a link between savings and college success: kids from low- and moderate-income households with even a small amount of college savings three times more likely to attend college and four times more likely to graduate.
2. Have a plan.
Only two in five of Sallie Mae’s respondent families created a plan to pay for college, but they were able to save over three times more and borrow one-third less than non-planners. Check out the American Saves guide to building a budget if you don’t already have one in place. Set a monthly savings goal and forget it via automated deposits.
3. Be realistic in assessing college options.
Academic programs and financial details often take a back seat to personal choices, but considerations like in-state vs. out-of-state, the level of grants provided by each individual school (some far more than others) and work-study programs can mean the difference between college being affordable, or not.
4. Leave no financial stone unturned & NEGOTIATE!
“Free money” is available in the form of grants and scholarships. Far and away, assistance is going to come from an individual school so you’ll need to apply to find out what they’re willing to offer. Scholarships can help, but they represent only about 3% of assistance, so be careful about where you spend your time and resources. Every family will need to complete the FAFSA application to be eligible for assistance, be it merit or need-based, and regardless of your income.
Even after applying and being accepted, too many families rush to accept the school’s offer of assistance in February of Senior year. Though it’s sometimes difficult to find the patience, waiting a month or two for a better offer from the same school can mean tens of thousands of dollars over the course of four years.
5. Curb spending wherever and whenever possible.
Did you know that the average price of a new textbook has increased by nearly 30% since 2009? Whether you’re looking at room and board, books and supplies, or personal spending, there’s often a way to lower costs. Many students are choosing to live at home to reduce housing costs, while others opt for a track to get their degrees completed faster. Be sure you understand if some high school AP classes will transfer to the next level and ask about average graduation times when interviewing admissions officers.
Don’t know where to start saving? It’s never too late!
- Get familiar with Children’s Savings Accounts (CSAs) and the benefits for kids in LMI households.
- 529 Savings Plans are getting some clearer spending guidelines that may boost their already tax-friendly savings benefits.
- ABLE accounts, tax-advantaged savings accounts for individuals with disabilities and their families, are rolling out this year and may include costs like education and housing for your student.
Want more tips on how to save? Check out more from our Save Smart blog.