The cost of attending college for the past three decades has been increasing at a rate almost three times our normal inflation rates. Along with this cost is the amount of debt that students and their parents have upon the student’s graduation.
Most parents today look more to their savings and ways to find money to pay for college than to how to save on college. Unless you have the money already saved for your child’s education, it is a tough road to save enough for the total cost in the last several years. You might be better served in finding ways to save on college. This requires some research and analysis.
One way is to consider a two-year college with a “bridge” program. This is a written agreement between a technical or community college and a four-year institution that the core subject matter will transfer between the schools as long as a certain grade is achieved in the classes to transfer. This grade is usually a C. Given that two-year schools are significantly less expensive, the savings can be great. Many times the course in the community college, though perhaps named differently, has the same textbook and, sometimes, even the same teacher.
There are ways to save on the cost of college as opposed to just saving for college. Many times a parent and child’s assets, which can be counted against them in determining financial aid can be repositioned to allow for more need; thus more opportunity to receive aid. In the instance of parents with too much income, or too many assets, there are strategies that create more cash flow for the college years. Many times there are tax strategies that can be employed to increase cash flow as well.
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Many times we look at, and make decisions based on, the cost of the college alone. This can be a huge mistake as there are other factors that come into play on what a college is going to cost you out of pocket.
Look at the graduation rates for the colleges considered. Even consider other colleges based on this factor. The government requires colleges to report their four-, five-, and six-year graduation rates. If college 1 is graduating 43 percent of its students in four years and college two is graduating 86 percent in four years, then college 1, at twice the cost, is a less expensive college. The reason is, because of inflation and ever-increasing college costs, every additional year of college will be more expensive.
Another factor to consider is the reported “need met” at each college and how it is comprised. Most private colleges are more expensive than public colleges, but because many private colleges have larger endowment funds (per enrolled student) than their public cousins they may be offering more free money. This brings us to a new point. Aid comes in two varieties; free and self-help. Free money is grants and scholarships that do not have to be repaid. Self-help comes in work-study programs and loans. In one, you work for money; in the other, you have to repay it. To me, loans are not “aid” money. They are aid in borrowing money.
My last point goes back to graduation rates. Less than 60 percent of our students are graduating in six years. The most expensive education is the one without an end result of a diploma. There was a time when the majority of students graduated in four years. Consider this: Upon graduation from high school, you are entering the work world.
College is not about an education, it is about career preparation. The world will give you an education regardless. Once, taking and passing 15 credit hours per semester, without transferring schools or majors, you would graduate college with a degree in four years. Today, many of our students are taking 12 credit hours. Though a full-time student, this is not a full credit load. This has become a five-year plan.
Consider taking 15 hours, maybe more, and attending summer school. It is possible to get a degree in less than four years by working hard full-time. Isn’t this what your employer is going to expect?