College costs may be skyrocketing, but there’s plenty of help available to minimize these costs. Students received more than $200 billion dollars in financial aid - and federal loans - last year. That’s more than double the amount ten years ago, according to the College Board.
Tuition discounts are rising to record levels. In 2012, more than three-quarters of all students at four-year private colleges received an institutional grant or scholarship of some kind. These students got a discount of about 50% off the tuition list price, according to the National Association of College and University Business Officers.
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You don’t want to leave this “free money” on the table. Here’s how to get your share:
First, is your son or daughter a vegetarian with a message to share? Or, maybe they dream of wearing a prom dress made of duct tape?! There could be a scholarship for them. According to Mark Kantrowitz, an expert on paying for college, a student’s odds of getting a scholarship are 1 in 15. But you won’t know until you apply. According to the College Board, students received a total of $112 billion in grants and scholarships last year, and the average savings? Nearly $7000! Research your options at fastweb.com.
Next, reduce your costs by keeping a level head about your choice of schools, says personal finance expert, Lynnette Khalfani-Cox, of TheMoneyCoach.net. “Many of us, as parents, are beholden to a certain college, and frankly, that might not be the best fit for the child, or for the family, financially.”
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To cut costs, Khalfani-Cox suggests completing some credits at a less-expensive two-year school, and then transferring to your four-year “dream school.” The average tuition rate of a 2-year college costs less than half the rate of a public 4-year college, and only a tenth of a private 4-year college, according to finaid.org. Many schools have formal relationships to make the transfer easier. Check finaid.org for list of partnerships in your state.
How about a tuition-free school, like military academies, or schools like Berea college in Kentucky, which provides students in need with full financial scholarships. Other schools, like Clark College in Washington State, offer tuition waivers that discount or even cover the entire cost of tuition for students who are military veterans, state employees, and seniors older than age 60, for example.
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Even top colleges like Harvard and Princeton have adopted no-loan policies, which meet the needs of lower and moderate income families without saddling students with debt. To date, some 75 schools are following suit, according to finaid.org.
Finally, don’t forget valuable tax breaks like the American Opportunity Credit, which can reduce your costs, dollar for dollar, up to $2500 per student. A Sallie Mae survey showed that less than half of parents and students take advantage of these benefits, even though many more are eligible.
So what’s your strategy for saving on college costs? Find me on twitter, @veragibbons, and use the hashtag, #costofliving.