Going to college isn’t getting any cheaper, but getting a degree after high school is becoming increasingly important, with two-thirds of today’s jobs requiring some sort of college education.
Luckily, families can take certain steps to make college more affordable. Paul Golden, the spokesman for the National Endowment for Financial Education, outlines a handful:
1. Start saving early
Before exploring student loans, take advantage of state-run 529 prepaid tuition plans or college savings plans, which can help offset the costs of college expenses on a pre-tax basis. Every state offers one. Also, be sure to submit a Free Application for Federal Student Aid (FAFSA) to see if you’re eligible for government aid.
2. Consider community college
If you need to take care of your core credits, consider going to community college, which offers the same classes as your local university, but likely at a lower cost. Then, transfer to your desired university. “No one is going to ask you where you started school,” Golden says. “It’s all about where you finished.”
3. Apply for grants and scholarships
“Grants are basically free money,” Golden says. Scholarships are, too. Numerous online databases allow students to search for opportunities offered by local, state and federal organizations, nonprofits and religious institutions.
4. See if work-study is an option
Some schools offer both undergrad and graduate students the chance to work part-time in their field of study on campus as they take classes to help pay for college expenses, which can help make getting a degree cheaper.
5. Explore federal loans first
If you need to take out a student loan, consider those offered by the federal government before those from banks and credit unions. Often, federal loans offer more incentives, like a longer grace period between graduation and working till you have to begin making payments, as well as deferment options.
6. Read the fine print
Before borrowing, be aware of disclosures like a loan’s interest rate (and whether it’s fixed or variable), the term, repayment options and the grace period.
7. Borrow smart
After determining your total cost of college (think: books, tuition, housing and food), be sure the amount you borrow is commensurate with your projected salary. “[Student loan debt] is still good debt because it’s an expense that’s going to create value,” Golden says. “The key is to not over-borrow. As with any kind of borrowing, you don’t want to exceed your return on investment.”