21 Smart Ways to Save on College Tuition Costs and Keep Money For Other Investments

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As our daughter gets closer to turning 12, my spouse and I have been talking about what she might want to do when she grows up. But with college costs going up so much, it’s got a lot of people wondering if going to college is still worth it. 

While some jobs don’t require a college degree, most studies say that having one can help you get better-paying jobs. Even though we can’t predict what jobs will be available in 10 years (I mean, when I was in college, smartphones were barely a thing!), we still think it’s smart to plan ahead for her future, just in case.

But figuring out how to pay for college can be really stressful. From getting college credits while still in high school to finding different ways to pay for school, I’ll give you some practical tips to make paying for college a bit easier for you and your family.

Earn Credits in High School 

1. International Baccalaureate (IB)

The International Baccalaureate (IB) program is an internationally recognized educational program offering rigorous coursework and assessments for students aged 3 to 19. It aims to develop inquiring, knowledgeable, and caring young people who are equipped to succeed in a rapidly changing world.

The program includes three educational levels: the Primary Years Program (PYP), the Middle Years Program (MYP), and the Diploma Program (DP). The IB Diploma Program, specifically designed for students aged 16 to 19, is highly regarded by colleges and universities worldwide and offers a comprehensive curriculum emphasizing critical thinking, research skills, and global perspectives.

2. Advanced Placement (AP)

Advanced Placement (AP) is a program administered by the College Board in the United States and Canada, offering college-level courses and exams to high school students. AP courses cover a wide range of subjects, including mathematics, sciences, humanities, and languages. Students who take AP courses have the opportunity to earn college credit or advanced placement in college courses by performing well on AP exams. 

AP courses are designed to challenge students academically, provide a preview of college-level coursework, and help them develop essential skills such as critical thinking, research, and time management.

3. Dual enrollment programs

High school students can enroll in college courses while still in high school, earning both high school and college credits simultaneously. This can significantly reduce the time and cost of completing a degree.

Arbitrage Tuition Credits

4. School arbitrage

Consider attending a less-expensive college for the first year or two, then transferring credits to a more prestigious or expensive institution to complete the degree. This allows students to benefit from lower tuition rates at one institution while still obtaining a degree from a more recognized school. 

This can be super helpful, especially if you haven’t decided on a major yet. You will also get an added year or two to work and save. If your parents are willing to allow you to stay at home, this can be an even more powerful way to take on an unpaid internship in your field and try on majors before committing. Then transfer to a school of your choice as you understand what you want to major in.

5. Credit transfers

Opt for community college courses or online courses that offer transferable credits to a four-year institution. This allows students to complete prerequisite or general education courses at a lower cost before transferring to a more expensive university for specialized studies. There’s no need to overpay for core credits that have nothing to do with your required major. 

The In-State vs. Out-of-State Dilemma

6. In-state

Many states offer reduced tuition programs for residents, providing an attractive option for local students looking to save on college expenses. Additionally, some states offer prepayment options for tuition, allowing students to spread out payments over time and alleviate the financial burden.

7. Out-of-state

Consider exploring options where family ties exist. Some schools offer reduced tuition programs for children of alumni, presenting an opportunity to benefit from family connections and potentially lower tuition costs.

Earn While You Learn

8. Crowdfunding and scholarships

Explore crowdfunding platforms to raise funds for tuition and other educational expenses. Additionally, actively pursue scholarships, grants, and fellowships, including niche-specific opportunities and those offered by local organizations.

9. Academic and merit scholarships

Lay the groundwork early by maintaining excellent grades in high school. Then, apply for as many scholarships as possible to maximize your chances of securing financial assistance.

10. Athletic scholarships

If you excel in sports, consider athletic scholarships as a means of funding your education. These scholarships can provide financial support while allowing you to pursue your athletic passions.

11. Work-study programs

Many universities offer work-study programs, enabling students to work part-time on campus and earn money to cover tuition and living expenses. These positions are often flexible and provide valuable skills and experience that can complement your academic pursuits.

12. Military service

Explore opportunities to serve in the military or participate in Reserve Officers’ Training Corps (ROTC) programs. These avenues can provide financial assistance for college tuition through initiatives like the GI Bill or ROTC scholarships, while also offering valuable training and experience.

Explore Alternative Funding Options

13. Student loans and grants

While student loans and grants are not the preferred method of funding education due to the potential burden of debt, they can supplement other funding options and provide a smoother financial journey through college. It’s crucial to borrow only what is necessary and be mindful of the long-term implications, as student loans typically cannot be discharged through bankruptcy and may persist even after death.

14. Income share agreements (ISAs)

ISAs offer an alternative to traditional student loans, where students agree to pay a percentage of their future income for a specified period after graduation. This arrangement aligns the cost of education with post-graduation earnings, easing the financial burden, particularly for students facing challenges in securing high-paying employment immediately after graduation.

15. Cooperative education (co-op) programs

Co-op programs enable students to alternate between periods of full-time study and full-time work related to their field of study. In addition to earning money to offset tuition costs, students gain valuable work experience, enhancing their employability and potentially leading to job offers upon graduation.

16. Income-based tuition

Some universities are experimenting with income-based tuition models, where students pay tuition based on their projected future income potential. This innovative approach may involve paying a reduced tuition upfront and contributing a percentage of income for a designated period after graduation, offering greater flexibility and affordability.

17. Student loan work/forgiveness programs

While student loan forgiveness programs sound appealing, they may not always be practical or beneficial for all individuals. Assess the trade-offs carefully, considering factors such as location, career advancement opportunities, and financial implications. While some may find success in these programs, others may find alternative strategies more suitable for managing student debt and advancing professionally.

Additional Cost-Saving Strategies

18. House hack for room and board

Consider bypassing traditional dormitory expenses by exploring the option of house hacking. This involves purchasing a rental property and either renting out additional units to cover mortgage expenses or renting out rooms to fellow students. Not only does this strategy potentially offset housing costs, but it also provides an opportunity for real estate investment and financial independence.

19. Sharpen culinary skills

Learning to cook can significantly reduce expenses associated with dining out and ordering takeout, common practices among college students. By preparing meals at home, students can save money while also promoting healthier eating habits. Additionally, organizing potluck dinners or cooking gatherings with friends can foster a sense of community and social connection while minimizing food expenses.

20. Embrace car-free living 

Consider the financial benefits and practicality of living car-free during college. By forgoing car ownership, students can save on expenses such as car payments, insurance, maintenance, fuel, and parking fees. 

Instead, rely on alternative modes of transportation, such as walking, biking, public transit, or carpooling with friends or classmates. Not only does this reduce financial strain, but it also promotes sustainability and encourages physical activity. Additionally, many campuses are pedestrian-friendly, making them convenient to navigate without a vehicle.

21. Go vocational instead

Consider vocational training as a cost-effective alternative to traditional college education. Vocational programs offer specialized training in various skilled trades and professions, equipping individuals with practical skills and certifications sought by employers.

By opting for vocational training, students can bypass the hefty tuition fees associated with four-year degrees while gaining valuable hands-on experience in their field. Shorter program durations and focused curriculum mean vocational training provides a streamlined path to entering the workforce and building a successful career without accumulating significant student debt.

College Tuition Case Study

Most people are savvy enough to realize they want to reduce their costs for higher education. But let’s explore how implementing just a few of the cost-saving moves mentioned here can impact your future wealth.

John faces the daunting task of funding his daughter’s college education, with in-state tuition priced at $30,000 annually and a private alma mater demanding $65,000 per year, creating a $145,000 discrepancy over four years. Determined to optimize savings, John chooses to enroll his daughter in an equally prestigious in-state undergraduate program.

But John doesn’t stop there. To further mitigate costs, his daughter earns college credits in high school and strategically arbitrages the remaining core classes at a local junior college, reducing her in-state tuition from $30,000 to $20,000 yearly. This additional $10,000 annual savings accumulates to another $40,000 saved over four years, for a total of $185,000 saved on college tuition and expenses. 

Compound these savings at 7% for 30 years—these savvy moves result in $1.5 million in net wealth accumulation for John’s family.

But John’s journey doesn’t end there. He reads Money For Tomorrow: How to Build and Protect Generational Wealth and discovers how to invest his $185,000 savings tax-free at an 11% return rate, accumulating a modest $3.6 million over the same time period. This modest savings is catapulting him toward a prosperous financial future for himself and his family.

Final Thoughts

College is often seen as a rite of passage, a time to spread your wings and explore newfound independence. However, it’s crucial to approach this phase with financial foresight rather than taking on a “deferral mindset.” By implementing the cost-saving strategies outlined here, you can profoundly influence your financial future. 

Take a cue from John’s journey, where strategic decisions led to substantial savings and promising investment prospects. Even a modest reduction of $25,000 in college expenses can have a significant impact on your long-term wealth trajectory. With determination, financial literacy, and a sprinkle of creativity, you can chart a course toward a prosperous financial future while confidently navigating the complexities of college tuition costs.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.