CNBC (1) has an article on 3 steps you can take to pay for college. We add 4 more unconventional ways that can add up to savings.
Three steps to pay for college
Tuition, fees and room and board — plus books and supplies, transportation and personal expenses — total an average $27,940 at a four-year, in-state public college for the 2022-23 school year, according to the College Board, which tracks trends in college pricing and financial aid.
CNBC
Ouch!!! That’s almost $112,000 average for a four year bachelor’s degree at an in-state public college if you paid in full. The bolded items are what CNBC mentions.
- 1 – Tap college savings accounts as much as possible
- Money in 529 plans can be used tax-free for most education expenses, including tuition, room and board, books, computers and supplies at most two- and four-year colleges
- That includes technical, vocational and graduate schools
- Starting in 2024, unused funds in 529s [can] be rolled into Roth IRAs, subject to certain exclusions (a great benefit to help college students save for retirement)
- 2 – Leverage private scholarships
- About 60% of students received scholarships last year and those awards averaged $8,200
- High school course work , along with SAT and ACT scores, unlock admission and scholarship dollars for the majority of schools
- Search websites such as Scholarships.com, Fastweb.com and the College Board’s Big Future site for scholarships
- Lots of scholarships go unclaimed every year
- 3 – Appeal for more financial aid
- It’s possible to ask financial aid offices for more aid if circumstances change
- Use a free template online to send appeal letters
- Fill out the Free Application for Federal Student Aid
- Deadline is June 30, 2024, to submit a FAFSA form for the 2023-24 school year
- You need to submit a FAFSA every year you expect to take loans
- Look towards getting more grants than loans if possible
- If you have multiple acceptance letters, negotiate between the colleges to get more aid
Four other steps to take to reduce college costs
- Some uncommon steps
- 4 – Pass Advanced Placement or International Baccalaureate exams
- If you can get high school credit in lieu of college credits by passing an exam, take advantage
- Some high schools allow you to take community college classes in high school and get credit for both
- It will be far cheaper than paying college tuition per credit
- I was fortunate enough to enter college with 39 college credits due to AP exams. A classmate entered with 52 college credits.
- This allowed me to graduate college with dual majors in 3.5 years
- 5 – Get your Associate’s degree at a community college and switch into a four-year college program
- Community colleges charge far lower tuition than public or private four year programs
- Community colleges are far less restrictive on accepting students
- It may require some planning to make sure you maximize future degree options
- 6 – Use your I-bonds to offset college costs
- TreasuryDirect.gov (2) has a good site on the conditions for using your I-bond interest to offset college costs
- The rate of return may be less with I-Bonds
- It may require more savings to make a dent in college costs
- You avoid the vagaries of the market and high performance fees in 529 plans
- 7 – Pay down principal before graduating
- I wish I had known the above
- Federal loans accrue interest after the loan is provided to you
- The interest is not added to your principal until a grace period after graduation
- If you pay down the principal in college you will incur less future interest
- Bonus – Guaranteed Tuition Plans
- Many public schools allow you to lock in tuition rates
- If the locked in tuition rates are lower than expected variable tuition rates, it makes sense to lock in
We’ll be discussing more as kpopfan, our eldest, prepares for college.
Wishing you success getting into your dream college.
Sincerely yours,
smilingdad
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Notes:
(1) CNBC Few families pay the full price for college: Take these 3 steps to help cover rising higher education costs https://www.cnbc.com/2023/08/17/3-steps-can-help-you-cover-rising-college-costs.html
(2) TreasuryDirect.gov Using bonds for higher education https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/using-bonds-for-higher-education/
smilingdad 