Cutting the Cost of College
If your son or daughter is a high school junior or senior this year, then you are probably thinking and talking quite often about college. Maybe you even went to visit some college campuses together during the summer so your child could see what attending college there would be like. As their high school graduation gets closer and you look at the possibility of your children going to college, the cost of a college education becomes a serious consideration and concern for most families.
Perhaps you have been saving tax-free in a college 529 Plan ever since your child was a toddler, which is commendable. However, whether you have saved the money for college costs or not, it is still important to comparison shop for the best deal for your family’s education dollar, just as you would when comparison shopping for school supplies, a new TV or anything else your family buys. How do you begin?
Some students know exactly what they want to do and what they intend their major to be in college. For them, it is a matter of identifying the colleges you can afford that specialize in or offer that major emphasis or program of study. For example, if your daughter has her heart set on becoming a veterinarian, find out which colleges offer animal or pre-veterinary science or any other program of study that would qualify her to seek admission to a school of veterinary medicine. She may have fewer affordable college choices as possibilities due to her desire for a specific major.
For other students, although they may intend to go to college, they may have no idea what they want to study as their major. For them, a general education college program, which offers introductory classes in many areas, allows them to explore multiple possibilities and “find” what interests them most before declaring a major concentration. In this case, you will probably be able to identify several colleges you can afford because a non-specific major can be found at more colleges, thus giving you more choices.
So what will it cost? According to the College Board, the cost for tuition and fees for 2007-2008 averaged $6,185 at a four-year public college. Public college costs were up 6.6% from the previous year, but they are still significantly less than the national average of $23,712 at private four-year colleges. Why would a family spend that much more for their child to attend a private college? Some families have a tradition of attending a certain private school, and they are willing to spend more (in this case, $17,527 more) for their child to attend that private college.
If your student has had good grades and scored high on national entrance exams, she or he may be recruited and offered an attractive scholarship to attend a specific college. Both public and private colleges offer scholarships as incentives to attract good students. Compare scholarship packages when considering costs. Although a $10,000 scholarship to a private college is very attractive, if tuition and fees are $23,712, you will still have to come up with savings or loans to cover the $13,712 balance. If that same year of college at a public school costs $6,185, then you save $7,527 by not taking the $10,000 scholarship offer from the private college. Always do the math.
The College Board reports that 2007-2008 room-and-board charges are similar at both public and private colleges -- $7,404 at public schools and $8,595 at private colleges. They note that the average costs of tuition and fees and room and board have been rising at both public and private colleges.
What if your family just can’t afford even the lower cost of $6,185 for tuition & fees and $7,404 for room and board at the public college? After all, even if your student gets a work-study or part-time job to help out, that is still $13,589 per year for four years for a total of $54,356, and college costs continue to rise. What are your other options?
Most communities are served by community colleges, which offer general education classes for low cost. These community colleges offer two-year associate degree programs and have agreements with public four-year institutions that allow their students to transfer the credits they have earned to the four-year institution to be counted toward a four-year bachelor's degree. Having a student live at home and attend a community college for the first two years of college before transferring to a four-year college for the last two years makes college more affordable for many families.
If it becomes necessary to borrow money in order to pay for college, look for direct subsidized federal loans. They cost less and no interest has to be paid while the student is in school at least half-time.
Textbooks can cost $1,000 or more per year. Check the web (Bartelby.com or Gutenberg.org) for free downloads of some textbooks, or see if required textbooks can be rented (CampusBookRentals.com, Chegg.com, BookRenter.com) to reduce the cost. Sell textbooks as soon as possible after the semester ends. Don't wait and risk the books being out-of-date and unsalable later.
Other considerations: If your son or daughter finds a preferred program of study at a public college outside your state of residence, although the tuition and fees for that school may be lower than a private college, be aware that your student will be charged extra (out-of-state tuition and fees) as a non-resident of that state. States try to offer a program of study for every major in at least one of the publicly funded colleges within the state. However, some states are not able to offer all majors within their state, so they set up cooperative agreements with other states that will allow their students to attend an out-of-state school without having to pay non-resident tuition. If your student’s desired major is not offered in your state, check to see if your state has a cooperative agreement for your child to attend a public school with that major in a neighboring state.
College is a good investment. If your child is younger, start saving now in a tax-deferred educational fund and enjoy federal and state tax benefits plus the peace of mind of knowing you’ll be ready to cope with college costs when your child graduates from high school.
Reference: “Trends in College Pricing 2007, the College Board.”