Ouch! Let that sink in for a second. That figure is the
total estimated cost of four years of college at a public
university starting in 2008-2009, and as the years roll by, this
figure is only going to grow. The number is estimated to jump to
over $151,000 by 2018, according to FinAid, a nonprofit educational
organization. For students attending private schools, it only gets
worse. The average total cost of four years at a private university
will balloon to over $300,000, beginning in 2018.
Paying For College In An Economic
Downturn
If you are a student or parent, you probably already know the harsh
reality of this situation: the high costs of college can make a
bachelor's degree cost-prohibitive, leaving many with the
unsavory choice between a tall stack of student loan bills or not
getting a degree at all. Your options don't have to be so
extreme, however. Here are some practical ways to reduce, and in
some cases even eliminate, college costs. (For related reading, see
Avoid The "Generation Debt"
Trap.)
Start Early
Saving only a
little each month from an early age goes a long way. In fact,
investing $50 per month from a
child's birth to age 18 at an 8% annual rate of return would
result in $24,004.30 saved for college. Either a 529 Plan or a Coverdell Education Savings Account is a good
vehicle for this strategy. (To learn how to establish these plans,
read Choosing The Right Type of 529 Plan and
Clearing Up Tax Confusion For College Savings
Accounts .) 
Two newer items that have come out in recent years are
prepaid tuition plans and CollegeSure certificates of deposit (CDs) . The availability of prepaid
tuition plans varies from state to state, but essentially these
plans allow parents or relatives to prepay and lock-in tuition
rates, foregoing future price hikes. The main
issues with these plans are transferability to other
states, to other children and to private schools from public
schools.
For a private-school alternative to state-sponsored, prepaid
tuition plans, consider the CollegeSure CD, offered by the College
Savings Bank in Princeton,
NJ . This CD provides an annual percentage yield tied to the annual
increase in college costs. If the tuition is higher than the plan
specifies, the plan will make up the difference. Additionally,
principal and interest up to at least $100,000 per depositor are
guaranteed by the Federal Deposit Insurance Corporation . (For
additional options, read Pay For A College Education With Retirement
Funds .)
Get
College Credit Without
the Tuition
Bill
No,
this isn't a diploma-by-mail scam - it's real. By taking
Advanced Placement (AP) and College Level Examination Program
(CLEP) tests, students can earn college credit for significantly
less than what they'd pay in tuition and room and board at even
the cheapest schools.
AP tests are given to high school students, while CLEP tests are
usually offered to students after they arrive on campus. Both tests
are administered by the College Board, the same company that gives
the SAT exam. In 2008, CLEP tests cost $70 each and AP exams cost
$84 each. The College Board's website provides details about
the 37 AP exams and 34 CLEP exams given in various subject
areas.
Consider that the minimum college credit given for passing an exam
is three hours, while some subjects, such as foreign languages,
allow a student to earn up to 15 credit hours (depending on the
university requirements). That's the equivalent of an entire
semester of college for only $70! At such a low rate,
it's worth a try.
As for AP exams, students need not limit
themselves to exams in classes offered at their high schools (if AP
classes are available at all). Many local libraries and bookstores
offer test preparation books for those willing to study on their
own. While this method can't fully replace classroom learning,
some motivated students may find prep books to be more effective as
they are geared purely toward passing the
exams.
So, for example, if you took Spanish in high
school or speak it as your first language, why repeat it in
college? Take the AP or CLEP test in Spanish and receive college
credit for your knowledge.
Smart Kids Start at Community
College
For the first two years
of college, many prerequisites are similar across most schools
and programs. Often, local community and city colleges offer the same
classes at much lower tuition rates than bigger state schools or
private schools. To save money, students should take community
college classes either while still in high school or for the first
year or two of college. Before enrolling, make sure the
credits will transfer to your schools of choice. Continuing to
live with parents while getting prerequisites out of the
way will also save a
significant amount of money over paying college room-and-board
costs.
Start with an Associate
Degree
If it's not
realistic to spend four years in school right now, students can
start with an associate or technical degree that can be completed
in less time and for less money. Having some type of degree can
allow them to start working at a reasonable wage sooner rather than
later. It may also lead to a position where an employer will pay
for the rest of the student's college tuition, sometimes
including a master's degree. Two-year colleges are a great
source of information about these options. (To learn why you
shouldn't skip out on college, read Invest In Yourself With A College
Education.)
The next section will provide advice on using scholarships and
student loans.
Scholarships Begin in Middle
School
It's a simple fact that
students who get good grades are offered more scholarships
when they graduate from high school than average students.
However, to get good grades in high school you have to
start with a foundation. It's never too early to start down the
path to earning academic scholarships. While middle school grades
do not directly affect college applications or
scholarship opportunities, preparation for high school begins in
middle school with foundation classes in math, science and
language. A solid grasp of these subjects will definitely help
one's grade nine GPA.
Another way to stay ahead of the learning curve in high school is
to put extra study time into learning the basics of upcoming
classes. An easy way to do this is to get a copy of the textbook
from the school and go over it in the summer. If the school does
not lend books over the summer, it may be possible to find an
inexpensive used copy online. This advance preparation makes
everything the student sees in class the following year a review,
making mastery of the subject much easier.
Apply for In-School
Scholarships 
Many college departments have their own
scholarships for enrolled students who distinguish themselves.
ROTC, military and merit-based, university-wide scholarships are
other options to consider. More scholarships are available to
incoming freshman than to any other group, but there are many
scholarships available to those already studying a particular
subject or participating in certain activities. Talk to
the
financial-aid office of your chosen school
as early as possible to learn about any available
options.
Remember, it never hurts to ask.
Only Borrow from Uncle
Sam
If all else fails, use
government-sponsored student loans to pay for a college education.
The interest rates are usually
reasonable (and for some loans, the interest is paid by the federal
government while the student is in school). The government's
Free Application for Federal Student Aid is a
good place to start looking for government-sponsored financial aid, as is the financial
aid office of your college or the college guidance counselor's
office at your high school. (To learn how the
U.S. government can help parents save
money for a child's education, read Investing In Your Child's
Education.)
Summary
Students should
find a plan that works for them and get started on it as soon as
possible. Those who enter college with their tuition fully paid
don't get in that position by accident. By employing one or
more of these options, college can become very affordable.
Paying For College In An Economic
Downturn
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