10 Ways To Reduce College Costs And Avoid Debt That Can Take Years To Pay Off

College costs are on the rise and show no signs of slowing their climb

. According to the College Board's "Trends in College Pricing" the average annual cost for in-state tuition ranges from $17,336 for public institutions to a whopping $35,374 for private universities. Adding insult to injury, college expenses are typically paid with after-tax dollars, which means that if you're in the 28 percent tax bracket, you need to make $24,075 to pay a public institution's $17,336 tuition.

With numbers like these, many parents are on the verge of panic about college. They've watched their education savings vanish in our nation's battered economy and, as scholarships and grants dwindle, they find themselves struggling to figure out a way to pay for college. In this pressure-filled environment, most families end up taking on unhealthy levels of debt - debt that can take years to pay off.

Despite the bad news, the good news is that families can still play the college financial aid game and win if they employ some smart strategies.

10 Ways Parents Can Cut College Costs Now For Their Senior High School Student

1. Apply early in your senior year which means apply now! Colleges go under extreme amounts of pressure to meet early deadlines for enrollment goals. To help meet their goals, some institutions will award merit scholarships to students who apply early in their senior year. This is one of the easiest ways to reduce the cost your family pays out of pocket for college. So get busy filling out college applications now.

2. Be proactive on your appeal strategy. Keep in mind that once you receive your award letter most of the financial aid has been assigned. Therefore, it may make sense to notify your financial aid office of special circumstances that you feel warrant consideration. Do this immediately after you have filed your financial aid applications and prior to receiving award letters. Make sure that your appeal is based upon real circumstances such as a loss of job, disability and inflated income due to bonus that will not be received this year.

3. Have your child enroll for a 2-year program first and then have them transfer to his or her desired school. This will help you reduce your college costs, but you must make sure that your child's credits are transferable. Additionally, be aware that some schools limit financial aid packages to transfer students. Planning is the key!

4. Understand that most university placement exams don't lead to college credits. In other words, a placement examination merely transfers a student out of a particular class. The original graduation credit requirements still apply and, thus, so do the associated costs. On the other hand, incorporating successful AP or AP alternative testing, reduces graduation credits and college costs. So be sure and check with your considered universities as to their acceptance of these credits and devise a plan that can help you improve your college financial experience.

5. Don't fall into the "there is only one right college for my child" trap! This costly mindset means that you limit yourself to that particular university's financial aid resources and you completely eliminate the use of competing award letters. A good college exploration process will produce many "right colleges" to consider, which can lead to big college cost savings.

6. If you are applying for financial aid to an institution that uses the FAFSA application, keep in mind that the methodology used in computing your EFC takes into account the age of the oldest parent. As the eldest parent matures, your EFC should decrease. Therefore, if the eldest parent has a birthday in January of the year in which FAFSA application is submitted, you may want to consider signing the financial aid application on the day of or after your birthday. This may reduce your EFC and could lead to a reduction in your total costs. And, make sure you get your financial aid applications in correctly and by the schools priority deadline, if not sooner.

7. Understanding how each prospective institution packages their financial aid is an essential part of receiving the "best" financial aid package. Many universities are required to include a minimum amount of self-help aid before any grant or gifted (free) money is awarded. Self-help aid includes interest-subsidized or unsubsidized loans and work-study programs that must be repaid through financial obligation or service to the school or state. So, what's the best strategy for big savings? Applying to schools that historically award a higher percentage of grants or gifted money and a lower "self-help level" can stretch your educational dollars.

8. Apply to schools that are "looking" for your student. Post-secondary institutions attempt to meet enrollment goals by giving better financial aid packages to students that they feel offer the "best fit" for their school. Understanding what your selected institutions are looking for and matching your needs to theirs, can improve your chances of receiving a generous package. A good starting point would be to go to the schools website, enter the phrase "Freshman Class Profile" into the search box. Click the search button and let the Internet do its magic. And if your child is a good "match," never underestimate the power of a few phone calls. Establishing relationships with the admissions, financial aid, academic personnel and area alumni representative prior to formal application can go a long way in reducing out of pocket expenses.

9. Understand the demographics of the Freshman Class Profile. If your daughter wants to major in an area that is typically dominated by males and she is in the top 20-25% of the incoming freshman class, the college could be more willing to reach out to her with an award package that consists of more institutional money vs. an award package loaded up with loans.

10. Get a handle on the geographic regions that the majority of the incoming freshman class is from. You can to use this to your economic advantage. Let's say your daughter is from a small city in the west like Estes Park, CO. She has her heart set on pursuing a male dominated major, like engineering, at a school located in the New York area. Chances are that school can get as many students from the New York area as they want, but they may not be able to get that many from Estes Park, CO. Your daughter may be able to add some much needed "diversity" to the student population and the college may be willing to pay for that diversity.

Failing to follow the tips in this article and in my newsletter at reducemycollegecosts.com will unnecessarily cause you to pay full price for your child's education. But if you take this peek into the future of college costs and combine it with the ideas mentioned above, you may be well on your way to saving thousands of dollars in college expenses.

by: Marc R Hill

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