Are you a parent who feels like your college costs are getting out of hand and going over your budget? Budget? As more and more money goes out of your bank account to pay for college, you may wonder, “What budget?”
The cost of college can become a nightmare that keeps you up at night, and you’re not the only one. But there are ways to keep costs down if you plan ahead and work with your student to make a plan from the time they apply to college until they graduate.
Community college is a good place to start.
Having your child stay at home and commute to a nearby community college or university for a couple of years is an obvious way to save money and invest in their future education.
Students can take the general education classes they have to take while getting used to college. Community colleges in a lot of states cost very little to attend. They often have agreements with four-year colleges that say students with an associate’s degree will be accepted if they meet certain requirements. Many also make it easy to switch credit cards.
If you choose this option, you won’t have to pay for room and board, dorm decorations, meal plans, or travel. Most universities’ tuition keeps going up, but so does room and board, and sometimes more than tuition.
Your student will also have time to choose a major if they aren’t sure what they want to study.
Studies also show that you don’t need a four-year degree to get some jobs that pay more than $50,000 a year if you have an associate’s degree. A lot of the time, the old saying is true: not every student should go to college for four years. When you think about the bottom line, you should also think about what your student needs. A four-year college might sound like a dream, but the results might not be so great.
Check out all the ways you can get money.
Obviously, not borrowing money is the best way to save money. Students should start looking for ways to get free money in high school, like private scholarships, merit scholarships, work-study jobs, and grants.
If you do need to borrow money, your first choice should always be a federal student loan.
Why get a federal loan? The U.S. Department of Education gives out these loans, which have a standard set of terms and a low fixed interest rate. Fill out the Free Application for Federal Student Aid to be able to borrow money (FAFSA). Students in their first year of college may also be able to get a federally subsidized loan, which doesn’t charge interest while they are in school.
Federal loans usually have more flexible payment plans, and some students may be eligible for a program that wipes out their debt.
If, after taking out federal student loans, you still need more money, you’ll need to look into and compare private student loans from private lenders.
It’s important to do research on private lenders and understand the application process and requirements, which vary from lender to lender and include things like origination fees, prepayment, interest rates, and payment options. You might also ask about flexible deferment, which lets a student put off paying until after they graduate.
For example, College Ave Student Loans offers a wide range of repayment terms and both fixed and variable interest rates. When you apply for a student loan from College Ave, you can choose to pay it back over 5, 8, 10, or 15 years. The shorter the loan term, the more payments you’ll have to make, but you’ll pay less interest. College Ave also has private loans for parents that can be paid back over 5 to 15 years.
Don’t forget to look into loans with no interest. Yes, they are there. If you borrow $1,000, you only have to give it back. They are offered by organizations that are not for profit, government agencies, and even private businesses.
Yes or No to College Life?
Do you really think your student wants to live on campus? Many campuses require first-year students to live in campus dorms for at least the first semester or the whole academic year. But what about after the second year?
The pros of living on campus are: easy access to classes (students may not need a car, which means no insurance or gas costs); cable, Internet access, and utilities are included in room and board, so students don’t have to worry about paying these bills every month; 24-hour security; nurse services or medical care; cafeteria meal plans; and meeting new people. Make sure your student uses the meal plan instead of eating out, which can quickly add to the cost of college.
Downsides? If your student likes to have their own space, a dorm may not be the best place for them to live. Many students would rather share an apartment or house with friends so they can have their own bedrooms and bathrooms. Your student might like to cook, but most dorms don’t have full kitchens. Students who work at night often find it helpful to live away from campus. Depending on the city where the college is, living off campus can sometimes save money.
If your student really liked living on campus their first year, look into any resident assistant (RA) jobs that the school may have for sophomores and higher. In exchange for working as a RA in a campus dorm, these jobs can often cover some or all of the costs of room and board for the year. Do some research and talk to the Residence Life department to find out more about these jobs and when the application deadlines are.
Before making a choice, you should do the math and make a list of all the costs, such as those for utilities, food, and transportation.
Explore Dual Enrollment Opportunities
Before going to college, your student could get college credit by taking classes at a nearby campus or online. High school students who want help with dual enrollment can get a lot of help from guidance counselors. Taking even one or two classes in high school will get a student ready for college and cost less than taking the same classes at a four-year college or university.
Instead of buying new, try buying used. Textbooks can be expensive.
Because campus bookstores are easy to get to, students often spend a lot of money there. But the cost of convenience is often high. It’s worth looking into whether you can buy or rent books online. Students can sell their books back to the bookstore or online when the semester is over. Don’t be afraid to go to more than one store to compare prices. Most of the time, renting from the school bookstore will still be more expensive than some deals you can find online to buy used textbooks.
Think about the required book and if it will be used for more than one course. In many science and math classes, one book may be used for two different classes. In this case, it might make more financial sense to buy the book, use it for two semesters, and then sell it. You can find out if the book is being used in more than one class by reading class reviews, talking to other students at the school, or contacting the professor.
Working during the school year and summers
Your student should work if they can while in college to help pay for costs. Work-study programs and other on-campus jobs are available at many colleges. Your student should also work during the summer if it’s too hard to go to school and work at the same time. There are many ways for college students to make money.
Be responsible with any college loans you take out.
Don’t forget that money you had to borrow. If you and your student are creative and make a good budget, you might have some money left over. You should ask the school to give the money back to the person who loaned it. So, you’ll have less debt to pay back after you graduate.
While your student is in college, you should start paying back the loan. There are ways to pay back the loan while your student is still in school. Even $25 a month is a big help.
A good rule of thumb, no matter where you get money from? Find out how much your student will make after graduation and how much you can help pay off the loan based on what you and your student expect to earn in the future. Then try to keep the total amount you borrow for school under that amount.
Keep track of all your daily costs.
If your high school student had a car, keep it at home. Buying a bike can save you money and help the environment at the same time. Get people to walk as a form of exercise. Cars need gas, insurance, and repairs, which are unavoidable. Your student’s car insurance can be turned off while they are away at school and turned back on when they return home for the summer.
Don’t forget to look at meal plans carefully. If your student only had a bagel and a cup of coffee for breakfast in high school, they probably won’t get out of bed in the morning to go to the cafeteria. Choose a meal plan without breakfast to save money. Will your child go to Starbucks every day? Tell them that a coffee maker and a popcorn popper for late-night snacks would be a better investment. Check with the school to see what kinds of kitchen appliances are allowed. Send care packages with their favorite snacks, too, so you can help them save some money on food.
Instead of credit cards, students should use debit cards. With a debit card, a student can only spend what is in their bank account. It is easy for credit card debt to get out of hand. Try not to give your student a credit card, but if they need one, make sure they know how to use it well.
Finish School in Four Years
One of the best ways to save cash? Pick a major and finish school on time. So, your student will only take classes that count toward their degree, and they will be able to graduate on time. Try to finish high school in three years. Taking dual enrollment and AP classes in high school will help you reach this goal. This will save you money on tuition and other costs for that fourth year.
Your student will do well in college if they plan ahead, do research, and make a budget.