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Three ways to prevent the cost of college from draining your bank account

College is expensive and students are facing ever-rising prices. In fact, inflation has hit the cost of college hard, and in fact, the cost of college is increasing 8 times faster than wages. Clearly, there’s a problem here.

With the average cost of a Bachelor’s degree passing the $33,000 mark, post-secondary education is one of the biggest expenses (other than healthcare and homeownership) that most of us will see.

Average annual cost of College
Average annual cost of College | Source: Value Penguin

These three ways not to break the bank at college will help students minimize their student loan debt.

Consider Housing and Transportation Costs

Whether you are in college or not, these are basic costs of living that everyone has to pay. They also have a huge impact on how much debt a student will end up with at the end of their college career.

College campuses located in urban settings typically will have significantly higher prices for housing and parking than colleges in more rural areas.

When considering a college keep these questions in mind:

Does the college have affordable housing options near campus?  Does living off-campus mean you will need a car? How much does on-campus parking cost? If you have to rely on public transit or Uber what will that cost on a monthly basis?

Luckily, most colleges publish not only their tuition cost but their estimated “total living” costs for a year of undergraduate courses.  This includes books, dining, transportation, housing, etc.

University Cost of Living (per university website)
Northern Iowa $12k
University of Washington $16k
University of  Chicago $22k

Making mindful financial decisions in selecting a college could mean the difference of $10,000 per year in living expenses alone.  Over the course of a 4 or 5-year college career this adds up to big savings!

College Savings Tip:

Apply to be a resident assistant at one of the on-campus housing locations.  Students can usually begin applying at the end of their freshman year. Resident assistants are usually offered a free single room which can mean thousands of dollars of savings per year.

Graduate College on Time

Among students pursuing a bachelor’s degree, only 38% are able to finish within the “normal” four-year window.  It takes almost the same percentage of students, 37%, six years or more to finish their undergraduate degree!

Time to get a college degree
Time to get a college degree | Source: National Student Clearinghouse

With college costing an average of over $22,000 per year delaying graduation by a year or more can lead to a serious increase in college costs.

Each year a student remains in college is also a missed opportunity to be working and earning money.

The average worker in their first year out of college earns $48,400. This means that for each year they remain in college, instead of earning $48,000 a student is spending $22,000.  A difference of $70,000!

Setting up regular meetings with your college’s guidance counselors can help ensure you are on track with your course load and credit requirements for on-time graduation.

College Savings Tip:

Take summer classes to stay on track for a four year (or earlier!) graduation.  These classes are typically billed on a “per credit” basis so you can avoid many of the college fees and other living expenses of having to spend an extra semester or year on campus.

Leverage Your AP classes or Local Community College

Almost all high schools in the United States offer AP classes or have access to a local community college to offer introductory college-level classes to high school junior and senior students.

There are pros and cons to both options but they can give a student a significant leg up in their total course load once they begin their undergraduate degree program.

Advanced Placement (AP) Courses

These are classes that are administered through the high school and finish with a standardized AP exam.  The exam is scored on a 1-5 and many colleges offer either college credits or the ability to skip an equivalent entry-level course for students that score a 3 or higher.

Community College Courses

These are introductory level college classes offered at a local community college and are open to high school students.  The benefit of these classes over AP courses is that colleges are often more willing to provide full credit versus just letting a student place out of an introductory level course.

That means for a college that requires 120 credit hours to complete an undergraduate degree a student who places out of an introductory level course through AP credit would still need to take a full 120-hour course load. Whereas a student who receives 3 credit hours from a community college would only be required to take 117 credit hours during their undergraduate career.

By taking 5 or more courses in high school this could mean the difference in an entire extra semester or year spent on campus!

Community College Guaranteed Admission

As colleges have become more aware of the financial burden an undergraduate degree can place on students many are now offering guaranteed admission programs for community college students.

Program requirements vary state by state or even school by school so it pays to do your research.

The basic idea is that students who attend community college for two years and maintain a certain GPA level are guaranteed admission to a state university with a full transfer of their earned credits.

By attending a community college for two years the total financial commitment required by a student acquiring their undergraduate degree can be significantly reduced.  Community college tuition is often half the cost or less as compared to state and private universities.

College Savings Tip:

Start building a list of prospective colleges early in your high school career to allow time to research the most effective ways to use AP and community college classes.  Graduating early by earning college credits in high school or transferring from a community college can mean savings of $10,000 or more.

Conclusion

These tips on three ways not to break the bank on college can mean a difference in graduating with a mountain of debt or putting yourself on track for financial success early in your career.  With the average student in the United States now graduating with over $38,000 in student loan debt; making wise financial choices for 4 years in college can mean the difference in not having to pay back loans for the next 10 – 20 years of your life.

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