5 ways to reduce college tuition costs

College costs continue to skyrocket, with the average total price of a four-year degree totaling $122,000 in 2020, according to EducationData.org.

With the economy in decline due to the pandemic, it’s not easy for families to come up with the cash needed to cover total college tuition costs. That leads to a separate set of problems, as college students take on tens of thousands of dollars (or more) in student loan debt to pay ever-rising tuition costs.

Often, it takes years to pay student loan debt. According to the U.S. Department of Education, it can take 20 years to completely pay off college loans between $20,000 and $40,000 in federal student loans. To determine which student loan best meets their needs, borrowers should visit Credible to compare rates, lenders and other options.

Curbing College Tuition Costs

Job one for any college student looking to cut his or her tuition burden is to get disciplined, get creative, and get going on action steps that reduce college tuition costs.

To get that process rolling, leverage these five tuition-cutting tips and start saving on college costs right away:

Leverage merit scholarships

Merit scholarships are the number one tool that students can use to reduce their tuition costs. According to Unigo, there are over 1,000,000 merit scholarships offered in the U.S. worth over $5 billion.

“The hard work that high school students put in to earn a high GPA and test scores can pay off handsomely with merit scholarships,” said Shaan Patel, college admissions expert at Prep Expert, a leading SAT/ACT prep company. “A study by the U.S. Department of Education found that on average, high-merit students at selective schools have 58 percent of their tuition paid for by merit-based financial aid.”

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Comparatively, need-based financial aid isn’t enough for most students. “For example, the Federal Pell Grant covered just 29 percent of the average costs of tuition, fees, room, and board in 2017," Patel said.

Direct financial aid that doesn’t need to be repaid

“Look into grants and broader scholarships,” said Robert Farrington, founder of the web site TheCollegeInvestor.com. “These are considered 'gift-aid' and do not need to be paid back. They can be received either from colleges, the government, or private entities.

“They require an application and some require short essays or projects,” he added.

Take “challenge” exams

A simple way to save thousands on the cost of earning a college degree (and possibly graduate a year early) is to take and pass challenge exams for college credit.

“Although there are several types of these exams, the College Level Exam Program (CLEP) is most popular,” said Cyrus Vanover, founder of the Frugal Budgeter and author of the book, “Earn a Debt-Free College Degree.”

The College Level Exam Program, and all of its exams, are offered at test sites across the nation, Vanover said. “They are multiple-choice and are currently available in over 30 subjects,” he said. “Study guides are available to get you up to speed on a subject if you're a little rusty.”

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The tests currently cost under $100 for a three-credit exam, which is worth the money given the fact students can earn 30 college credits (one-fourth of a bachelor's degree) for about $1,000, Vanover said. “Many colleges and universities accept CLEP challenge exams, although they usually don't advertise it. Check with a student advisor at your school for more information.”

Live in a fraternity or sorority

Emily Wright, a marketing director at ONNOT-Shirt company in Boulder, Col., said her daughter is saving cash by living in a sorority at Colorado State University.

“She was able to save several hundred dollars a month by living in the Kappa Delta house her sophomore through senior years,” Wright said. “Everything is included - food, housing, utilities, library access - for roughly half of home or apartment rent in the area goes for, and about 2/3 of what on-campus housing and dining plans cost. Plus, she doesn't have to worry about finding a new place to live every year.”

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Most colleges offer direct access to fraternities and sororities on campus. Ask your college admissions office for more details.

Attend community college first

Attend a community college for two years and transfer to a four-year college and claim a degree.

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“The diploma is the same in the end but it can save a student thousands of dollars,” said Cecile Hult, a private wealth advisor at Argent Bridge Advisors in Vienna, Va. “As an added bonus, students can stay home, save money on room and board, and remain in a nurturing family environment. Not everyone is ready to leave home and be independent to study at 18 years-old.”