13 Creative Ways to Lower the Cost of College

planning for college

Even if you’re savvy about college shopping and thoroughly research financial aid, college costs may still be prohibitive. At these prices, you might 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. Before you throw in the towel, you and your child should consider steps that can lower college costs. Although some of these ideas deviate from the typical four-year college experience, they 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 tuition break if you pay the entire semester’s bill up front or if the money is 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. If it’s your alma mater, don’t forget to inquire about any discounts for 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 more substantial 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 or graduate earlier, saving you money.

Think about cooperative education

Cooperative (co-op) education is a type of school with semesters of course work that 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. Also, 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 a four-year institution, but your expenses won’t. Before choosing this route, 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 standard application deadline with the rest of his or her classmates and, once accepted, can ask for a one-year deferment. Make sure to check that 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 may need to sit down beforehand and discuss mutual expectations. For example, now that your child’s in college, what will curfew look like.

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 attend the same school in person for the remaining years. Many schools are expanding to also include full online options.

Work part-time in college

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 ensure 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. Also, encouraging your child to become a resident assistant (RA) 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 a ROTC scholarship at a military recruiting office during his or her junior or senior high school years. 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 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 manager.

Have grandparents pay tuition directly to the college

Payments that grandparents (or others) make directly to a college aren’t considered gifts as it pertains to the federal gift tax rules. That means grandparents can be as generous as they want without worrying 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.

For more information on ways to save for your child’s college education and other financial planning assistance, please contact one of our CFS* Wealth Management Advisors today by calling 303.443.4672 x2240. We can help you set up a no-obligation appointment to discuss your options further. We’re here to answer any questions you may have.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Elevations Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available.

Author John Marx

John has been in the financial services industry since 1986 and is currently Elevations VP of Wealth Management, in addition to being a registered Financial Advisor through CUSO Financial Services, L.P. He shares helpful tips on investments, insurance and money management.

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