By Winnie Sun
Learn more about Winnieon NerdWallet’s Ask An Advisor
As FAFSA and college application deadlines approach, the cost of higher education is on the minds of many. The amount of student loan debt in America is increasing — as of September, students held $1.4 trillion in debt, up from $961 billion in 2011, according to the Federal Reserve Board. The average borrower graduates with more than $30,000 in student loan debt, and the government recently reported that more than 11% of students were in default by their third year of repayment.
Giventhese dire statistics, it’s easy to feel overwhelmed, and many may indeed view college as a luxury they can’t afford. Yet, with the right strategies, it is possible to get a college education for minimal debt. As a financial advisor, I work regularly with clients who are college-bound, current students or recent graduates. The following are my most effective tips for making college more affordable.Start saving early
This tip is perhaps the most important. The more money you have in savings before you start college, the less you’ll have to borrow. 529 college savings plans can be started as soon as a child has a Social Security number. Money put into 529 plans is tax-sheltered, and growth is free of federal taxes if the money is used for higher-education costs such as tuition, books, school supplies or housing. The money can also be transferred between family members.
Students also can consider getting a part-time job. Many high schoolers work in retail stores or restaurants. Tutoring is also a good part-time income source. Having an employment history before you apply to college can enhance your resume, too.Choose the right school
The cost of college tuition depends on the school you choose. Do your research and shop around to find out about course offerings and degrees available at several different schools before applying. Talk to current and former students in your intended program, and talk with professors and financial aid offices. You may find that several schools offer similar degrees, and sometimes lesser-known, public colleges can provide more individual attention and an education that is equal to or better than the big-name private colleges.
With the cost of out-of-state tuition significantly more than that of in-state tuition, it’s worth considering which option is truly better for your intended major.
You may also want to consider attending a community college for the first two years of an undergraduate degree. Many community colleges and universities have partnerships that allow students to then transfer and complete the final two years of their degree at the university. This allows you to earn a university degree for significantly less cost.
Students are eligible to receive federal grants once they complete their FAFSA application. There are also thousands of scholarships available from schools, businesses and charities. Some are not highly advertised, so make sure you see them all by using a scholarship search engine. Collegeboard, Moolahspot and Fastweb are good places to browse for scholarships. Try to apply for as many as you possibly can. Consider applying for scholarships a part-time job your junior and senior years of high school.
Keep in mind that schools typically do not publish all available scholarships on their websites. To avoid missing out on any opportunities, contact the financial aid offices of the schools to which you will be applying to explain your situation and ask for information about any scholarships they may have for you.
Don’t forget, there are also plenty of scholarships available only to students who have completed some college, so your scholarship hunt doesn’t end when you graduate high school. There’s plenty of money out there once you start higher education.Consider crowdfunding
Crowdfunding has become popular lately, especially for medical expenses, trips and special needs. Some crowdfunding sites are specifically designed to raise money for college costs. Setting up an account is usually simple — just upload a photo, add a personal story, and share with friends and family or on social media. PigIt, GoFundMe and ScholarMatch are all useful starting points.Opt-in for work-study
Many college and financial aid applications ask whetheryou would like to be considered for work-study. Make sure to check the “yes” box. Work-study opportunities may include library work, selling tickets, assisting a professor or other school-related jobs assigned to you by your school. Your job earnings offset tuition costs. Work-study options provide valuable experience that can advance your career, too.Earn college credit early for maximum savings
Students can lower the cost of college by taking Advanced Placement, International Baccalaureate or dual-enrollment courses while still in high school. These courses provide students with high school and college credit simultaneously. Taking these courses can often cut the length of an undergraduate degree down to two or three years instead of four, allowing students to enter the workforce or start graduate school earlier.
I hope these tips have helped you in your quest to save for college. If you have further questions, consult a financial advisor who can give you personalized guidance.