4 Ways to Save Big on College Costs

4 Ways to Save Big on College Costs

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Who would like to save a ton of money on college? Well then, you came to the right place. This article from Money Central offers four ideas that can save you big money on college costs. Their tips:

First step for those with college-age children: Do your taxes now. Then use the tax return to fill out the Free Application for Federal Student Aid (FAFSA), which schools use as a basis for many award decisions. Since decisions often occur on a first-come, first-served basis, early bird filers have a better chance of getting the financial-aid worm. After that, consider these four strategies to keep costs down:

1. Scholarships: apply, apply, apply. Applying for lots of scholarships doesn’t have to be a burden, says Ben Kaplan, author of “How to Go to College Almost for Free: 10 Days to Scholarship Success.” “In the process of filling out your college applications, you’ve already done a tremendous amount of work, so then go apply for scholarships because so many of the components (in a college application) are reusable,” Kaplan says.

2. Try low-cost schools. (Attend a lower-priced school for the first two years, then transfer and graduate from a “better” school.) “Lots of students attend more than one college these days,” she says. “If they could think strategically about this, they could do it to significantly reduce their costs.”

3. More tests mean smaller bills. Less time on campus means fewer tuition bills, since colleges usually charge according to the number of courses taken. Advanced placement (AP) tests provide a way to cut back on the hours — and the dollars — spent pursuing a college degree. Consider the path taken by Meghan Price of Gainesville, Ga. Because she scored well on the six AP subject exams she took in high school, she was able to enroll this past fall as a sophomore for her first year at the University of Massachusetts in Boston. By spending three years on campus instead of four, she expects to save between $32,000 and $34,000.

4. Shop around to save. As a Colorado resident, Allan Roth qualifies for tax deductions if he contributes to his own state’s 529 program, a tax shelter for college savings. But for the past five years, he’s been steering the lion’s share of his college nest egg into Utah’s 529 program. The reason: Utah’s low plan-management fees enable him to save more, even though he doesn’t get a state tax deduction. Unlike some states, Utah doesn’t hire pricey investment firms but invests directly in low-cost Vanguard mutual funds. “We’re operating this to help families save for college, not to make a profit,” says Lynne Ward, director of the Utah Educational Savings Plan.

When seeking out a loan, students should compare not just interest rates, but also payback benefits, such as rates that drop with a certain number of on-time payments, says Sheryle Proper, director of financial aid at Allegheny College and coauthor of “The Everything Paying for College Book.”