6 game-changing ways to save money on a college education

For many students and families, the rising cost of higher education feels like an insurmountable challenge. Questions like "Which school is the right fit for me?" or "Does prestige carry more weight than expertise?" carry their share of weight, but one question consistently stands out: "How can I save as much money as possible?"

Numbers show the total average student loan debt – including private loan debt – in the U.S. may be as high as $40,681, with the average federal aid borrower owing a whopping $37,853 per person.

While FAFSA (Free Application for Federal Student Aid) is a key tool for unlocking grants, loans, and work-study program opportunities that may help mitigate some higher education expenses, relying solely on FAFSA can sometimes lead to astronomical debt, and not all students qualify for the amount of aid they need.

The good news? There are other ways to shave dollars off your education expenses. Whether you're trying to avoid excessive student loans or supplement your existing financial aid, these practical, cost-effective options can make higher education more accessible and affordable:

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1. Community College

What's in a name? While attending top-tier universities like Harvard, Stanford, Yale or Columbia might be the dream, these schools and others like them can sport a hefty price tag. 

To break it down:

• The College Board reports that the average annual cost of tuition and fees for a public 2-year college for the 2022-2023 school year was $3,440 for in-district students.
• The average annual cost for a public 4-year university was $9,410 for in-state students and $23,890 for out-of-state students.
• For a private 4-year university, the cost expanded to $32,410 per year in tuition and fees.

Even completing just two years at a less expensive school and transferring to a more expensive institution can shave some off your overall college expenses.

"That's really big for us in California, where you do two years at a junior college and transfer to, say, UC Santa Barbara, UCLA or Berkeley," Greg Kaplan, a college admissions strategist based in the Golden State, told Fox News Digital. 

Kaplan highlighted that many students start at community colleges and later transfer to more prestigious flagship universities. This path allows students to earn a degree – and the institutional recognition – from a top university but at a fraction of the cost of attending all four years at that dream college.

"We worked with a student who started off at Arizona State University for two years on a full-tuition scholarship, and he transferred Northwestern, which is extremely expensive, very prestigious. So he only had to pay for two years," he explained.

2. Make your employer your partner

Some employers will reimburse tuition expenses for degree programs that could potentially enhance their employees' on-the-job skillset. In other words, you save money and your employer gains a more talented, well-rounded employee. It's a win-win for both parties.

Tuition reimbursements are oftentimes capped at $5,250 per year in accordance with Section 127 of the Internal Revenue Code (IRC), which enables companies to provide that dollar amount in tax-free assistance. This can be written off as a business deduction for the employer and employees receive the reimbursement as a tax-free benefit.

But some employers can do much more than that, even covering the cost of an employee's bachelor's degree in full.

"It's not just employer matching," Kaplan said. "If you're a young person, and you're going to be an entry-level worker, you might want to think about working for a company that could be your partner… I have talked to people who specifically go to work at a place like Starbucks because they can take online Arizona State classes, and they do it to get their degrees."

Starbucks' College Achievement Plan (SCAP) offers eligible employees 100% upfront tuition coverage for a first-time bachelor's degree through Arizona State University's online programs. 

Amazon's Career Choice Program similarly pre-pays tuition and fees up to an annual limit, and Walmart's Live Better U program offers eligible Walmart employees the opportunity to expand their education on the company's dime. 

3. Parents' Employee Benefits

Rather than relying solely on their employer, some college applicants can benefit from their parent or guardian's employee benefits, most commonly through company scholarships.

Companies like Chevron, PepsiCo, and Wells Fargo offer scholarship opportunities reserved for children of eligible employees. PepsiCo's Foundation Family Scholars program, for instance, offers a renewable reward of up to $5,000 for selected winners who will pursue an eligible education program with the funds.

After being accepted by a university, it's worth exploring employer benefits and applying for scholarships if the eligibility criteria are met.

This amount, combined with the potential for federal and state aid, can significantly reduce the cost burden of higher education.

4. Open a 529 Account

While it's best to open a 529 account when college savings begin while the college applicant is a child, creating an account in adulthood and adding small amounts can add up over time.

What is a 529 plan? A 529 account is a tax-advantaged savings account designed specifically for education expenses. Contributions to this account grow tax-free, and withdrawals are also tax-free if used for qualified educational expenses (e.g. tuition, supplies, room and board, etc.).

It's different from a basic savings account since the money has the potential to grow instead of sitting still. 

"If you could put away a few thousand dollars a year, of course everything helps," Kaplan said.

However, a 529 only extends so far. Kaplan notes that 529 plans alone may not cover a large chunk of tuition costs, especially at private universities.

"It wasn't enough to pay for my overpriced private university," he added.

5. Prioritize the SAT/ACT

While many colleges have retained a test-optional policy in the post-pandemic age, high SAT or ACT scores can give students an edge when it comes to merit-based scholarships. Scoring well on standardized tests can help students unlock thousands of dollars in automatic aid, helping ease the burden of their overall tuition bill.

"For example, if you got a 32 on the ACT or a 1400 on the SAT, that is going to automatically qualify you for a massive [approximately] $30,000 dollar scholarship at the University of Alabama, Tuscaloosa," Kaplan said, noting other colleges and universities award similar amounts.

"These scholarships are automatic based on test scores and grades, so studying for the SAT or ACT, even if it's not required. Giving it your all could potentially pay for all tuition." 

While taking the multi-hour exams seems daunting to many high schoolers, putting in hours of practice through additional coursework, practice exams, and even seeking help from tutors could lead to a drastically different financial outcome in the long run.

6. Consider consortium programs

One lesser-known way to save on college costs is by taking advantage of state consortium programs, which allow students to attend out-of-state public universities at reduced tuition rates. These agreements can help families avoid the hefty price tags often associated with non-resident tuition. 

In states like California, the Western Undergraduate Exchange (WUE) is a game-changer. This program lets students apply to 150+ colleges across the western U.S. – including schools across Montana, Hawaii, Wyoming, Arizona, California and Nevada – while paying reduced tuition rates.

"If I have a 3.3 GPA, I can go to the University of Utah for in-state tuition plus a small surcharge as a California resident, so it is cheaper for me to go to the University of Utah at $11,000 a year than it is to go to any public university inside the state of California," Kaplan explained.

"There are different consortia in the Northeast, in the Southeast and in the Midwest and in the West, and these are ways that these universities are seeking to diversify their students based on geography. I think a lot of people don't realize that these consortiums exist and that they can put a lot more schools in play, and it may end up being the right fit for you or your child."

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