As you gaze at your newborn or newly adopted son or daughter, one of these thoughts may run through your head:
- “Will I be able to afford to put you through school?”
- “Am I required to put you through school?“
- “Right now it's all I can do to pay for Pampers and child care. I'll worry about college later.”
Time has a way of sneaking up on us. Seemingly overnight, that gurgling infant morphs into a 12th-grader looking at college or vocational education.
According to The College Board, tuition and fees (but not housing) at U.S. colleges in academic year 2014-15 ranged from $9,139 (state residents at public college) to $22,958 (out-of-state residents at public universities) to $31,231 (private colleges).
Can't afford to pay out of pocket? You're not alone. That's why I think parents should craft not a college plan but rather a college strategy — a collection of tactics that, taken together, will reduce or even eliminate the need to borrow.
The recent “How America Pays For College” report from Sallie Mae notes that parents are covering 38 percent of college costs (mostly through current income and savings), while students are paying for 27 percent with savings, income and loans. Scholarships, grants and gifts account for the rest.
Some students reported cost-cutting tactics like choosing less-expensive schools, living at home, seeking scholarships/grants, reducing personal spending and working at least during school breaks (70 percent worked year-round).
These choices could be part of your own family's college strategy. So could one or more of these:
- Enlist the relatives. When auntie or grandpa asks for gift ideas, request the money be put into savings vs. spent on a toy. Don't most kids already have enough toys?
- Seek “dual enrollment” programs. Some states let motivated students attend community college while in high school.
- Take Advanced Placement classes and pass AP exams for credit. The $91 exam fee may be lowered if you can demonstrate need.
- Get three to 12 credits through the college-level examination program. Some 2,900 colleges and universities accept CLEP credits.
- Take core courses at a community college. Use the College Board's MatchMaker to make sure your credits will transfer.
- Check out “top scholar” programs. Alaska students who graduate in the top 10 percent get free tuition at the state university. Other states have similar programs.
- Investigate prepaid college plans, like the one that benefited this GRS reader.
- Get an education from your rich uncle, i.e., join the military. (Not for everyone, obviously.)
- Become a resident assistant to save on dorm fees. (Again, not for everyone.)
- Google “colleges with free tuition.” Maybe one would be a good fit.
- Graduate early! Take summer classes or extra ones during the school year. The National Association of Independent Colleges and Universities has a list of three-year degree programs.
- Work it off through college loan forgiveness programs from the National Health Services Corps, Teach for America, the U.S. military or AmeriCorps.
- Pay by the month. Some colleges let you make regular payments. Scholarships plus savings plus work-study plus whatever family contributes could get you through, 30 days at a time. (Again: Supportive relatives might give you $50 — or $500 — in cash on your birthday or at Christmas. It adds up.)
An affordable college education
Have this family discussion early on, not in the middle of 12th grade. I'd bet my paycheck for this piece that some of you 20- and 30-something readers wish you'd had that conversation before signing for all those student loans.
After all, young people are shouldering much of the debt. One-third of students borrowed last year, with federal loans averaging $8,454 (up from $7,788 in 2014) and private loans $12,102 (quite an increase from last year's $9,375).
Run sample numbers through a student loan repayment calculator with your teen. Yes, this seems far away. But try to imagine life with student loans and a starter salary — or maybe no salary for a while, if you graduate into a sluggish economy. (That alone is good cause to open an online savings account and start saving like crazy!)
This advice may fall on semi-stopped ears. After all, young people are 10 feet tall and bulletproof. Clearly they'll get excellent jobs — scratch that, “dream” jobs — before the ink dries on their diplomas.
May that happen! But create a multifaceted college strategy even if you are convinced your Baby Einstein will get multiple degrees on full scholarship.
Best-case scenario: Those scholarships materialize, a relative leaves a huge educational bequest, the family cat's YouTube channel brings in millions or you hit the lottery.
Worst-case scenario: None of the above happens, but the college strategy gets your kid through without undue (or any) loans. Which, come to think of it, is also a best-case scenario.
How did you save for your own education and/or will you save for a child's? Share your tips and challenges in the comments!