10 tips for saving money when sending kids to college

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CollegeSavingsWBy Pete Pichaske

Few parents out there aren't thinking about how to cut the cost of college and most are on the lookout for ways to save when sending their kids to college. As college costs rise to record levels, fears of insurmountable debt are growing.

"It's one of the top things parents — and students — are concerned about," says Susan Love, school counseling specialist for the Anne Arundel County Public Schools. "They want to come out of college without a lot of debt. Many families today are feeling a real pinch."

"It's certainly something all financial planners deal with," agrees James Klima, founder and president of Klima & Associates Inc., a Columbia-based financial planning company. "It's a basic part of financial planning for families."

Fortunately, experts like Love and Klima say parents can do something about this budget-busting bad dream. All it takes is some planning, diligence and flexibility.

Below are 10 ways to reduce college costs, suggested by a variety of school counselors, financial planners and college-related websites. Some of these college savings tips are for parents, some for students — and some for both.

10 ways to reduce college cost

  1. Start saving early, way before your high school child is thinking about college. "Start the first year or two of your child's life," Klima advises. Squirreling away even a little cash that early can pay big dividends by the time the child is college age.  Using an official college savings plan often makes the most sense, as such plans provide a tax break. And parents: Begin teaching your child the ABCs of budgeting early on.
  2. Familiarize yourself with the financial aid process. Counselors at area school systems have the knowledge and experience needed to help students and parents navigate the sometimes complex college financial aid process. Schools also offer college nights and, in many cases, other services aimed at helping overwhelmed parents. Calvert County, for example, partners with a non-profit organization, the Southern Maryland College Access Network, which sends advisors into each high school once a week to help students with college financial aid. The advisors also work with parents, in groups and one-on-one. Contact your child's school to see what's available.
  3. Fill out the Free Application for Federal Student Aid (FAFSA), which is the first step in applying for a wide array of federal, state and college-based aid. Apply even if you think your family will not qualify for these need-based scholarships; you might be surprised, and the process is free. Schools often provide help in filling out the form.
  4. Broaden the search for financial aid. Don't ignore local scholarships sponsored by your hometown or local service club. They might be smaller, but also are less competitive.  "There's a lot of local money available that doesn't get a lot of applications," says Molly Gearhart, supervisor for student services for the Calvert County Public Schools. "And no scholarship is too small."  Use social media to search for aid, as more and more resources are available there. Many Internet sites list unusual scholarship opportunities. Fastweb.com, for example, will give students a personalized list of scholarships that match their unique talents and interests with available money. Counselors can steer you to other sites. Beware, however, of sites that charge for scholarship search information – there are a lot of scams out there.
  5. Pick up college credits while in high school. Students can take advanced placement courses and AP tests for possible college credit, or even attend their local community college while in high school. Doing so can knock off a semester or more of college, which is a great money-saver.
  6. Consider unusual ways of borrowing money. Tapping your home equity line of credit, for example, can provide needed cash, and the interest you pay is tax-deductible. "People use these (lines of credit) for a lot of things, and not always wisely," Klima says. "This is a wise use."
  7. Start college at a community college, especially if you're not sure of your major. They're a lot cheaper, and the credits generally transfer if you want to go on to a four-year school.  "My students who transfer out (of a community college) are pretty much very successful at a four-year school," says Love. "And it can be a great transition for some students."  In the same vein, consider attending an in-state college, which generally costs about half what you would pay for an out-of-state public school or a private institution.  "In-state tuition rates offer excellent value," says David Horne, director of financial aid at Towson University. Some states even offer lower tuition to students from nearby states.
  8. Once in college, stay on track to graduate on time. Nothing drives up the cost of college like having to stick around an extra semester or two — or three or four. Horne's advice: "Graduate on time, by passing all classes, avoiding withdraws and repeats, and choosing your major early." A related tip: If you're planning on earning more than one degree, enroll in a combined degree program.
  9. Live at home. You might miss out on some of the college experience, but you'll save a bundle on room and board. At the least, and assuming proximity allows, live at home for part of your college career. Consider living off-campus with a few roommates.
  10. Save on textbooks, which are notoriously expensive — $1,000 a year or more. Buy used textbooks or, if you can, rent them. Sell your books back to the bookstore or to another student when you're done with them. If only a small part of a book is in the curriculum, consider using a library copy (or download it) rather than buying it.

Bonus tips: Look for student discounts in local shops and restaurants. Before you go to college, don't buy stuff you might not need or even have room for (TVs, for example); you can get them later if you need it. Don't borrow money to pay for unnecessary expenses. Get a meal plan that fits your budget, needs and appetite — one you don't waste money on by not making full use of. Look for a part-time job.

Handy websites in the quest to cut college cost

fastweb.com: Helps match students with available scholarships; also offers information on other types of financial aid, jobs and internships.

finaid.org: Guide to financial aid that lists and offers information on scholarships, loans, college savings plans and more.

mhec.state.md.us: Home page of the Maryland Higher Education Commission; includes all the information you'll need about state financial assistance.

savingforcollege.com: Offers detailed information on college savings plans, how to apply and how they work.
professionals.collegeboard.com: College Board website explains financial aid in easy-to-understand terms.
studentaid.ed.gov: U.S. Department of Education website offers basic information on federal financial aid, how to apply, etc.

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