Creative Ways to Save on College Costs

From a financial standpoint, there's probably never been a more challenging time than now to be the parent of a college-bound child. With the price tag for four years at an in-state public college often stretching north of $100,000, and double that amount at a private college, families have been forced to cut corners and make compromises to deliver the college education that so many consider to be an essential part of the American dream.

Fortunately, there is no shortage of ideas regarding how to lower the cost of a college education, saving anywhere from a few bucks to tens of thousands of dollars in the process. Morningstar readers on our Personal Finance discussion board were recently asked about their tips for saving on the cost of college and, as usual, they delivered. Excerpts are below, and for the full discussion, click here.

Choice of School a Key Decision
Several readers mentioned working with their son or daughter on a plan that would avoid large amounts of debt while still providing a quality education that puts the child in position for a bright future. RKC1940 was among them.

"Our two daughters got into nearly all the colleges they applied to, on up through Princeton," the poster said. "They wound up attending the flagship campus of our state university. They had merit scholarships, so it cost us virtually nothing, but even if we'd paid full fare the expense would have been a mere fraction of what an Ivy League school would have cost. The money we saved on our daughters' undergraduate schooling allowed us to support the older one through a top-of-the-line medical school and the younger through a premier law school. They're now launched on promising careers that are not driven by an Everest of debt."

Inspectorgadget wrote, "I'm debt-averse, so many years ago I decided that my kids would go to schools that we could afford. If that meant in-state school rather than a nationally ranked school somewhere else, that would be fine--it's well established that the key determinant of success is the talent and the dedication of the student, not the ranking of the school."

Louisniles recalled holding the line on college spending when two of his children said they wanted to attend schools that he thought were too pricey. "As a second-generation American born to Depression Era parents, I was only the second person in our extended family to graduate from college. I attended our local state university (North Dakota State) and received a top-notch education that was a great value for the dollar. The Great Recession was a wake-up call, a call for a return to sanity for our family. I was very happy to relearn the lessons about the value of a dollar that my parents taught me, and to pass them along to my kids."  

But BillInGA had a different take on the subject, arguing that sometimes you do get what you pay for when it comes to higher education.

"Don't be penny wise but pound foolish," he wrote. "My son wanted to attend Purdue for an engineering degree. I wanted him to attend one of our local state schools at a significantly smaller tuition cost. I fortunately was convinced that Purdue was the right choice over the reduced tuition. The strength of the school's engineering program and help from the school landed him two summer internships, which led to a great job offer at graduation. ... The school needs to prepare your son or daughter for real work and not just grant a degree. My son's experience plus my experience with other Purdue grads leads me to believe they know what is needed by industry. Don't let low tuition drive your decision. Rather, make sure the school provides a great education."

Then, there was GaoDawei, who dismissed the idea of going to a traditional four-year college altogether.

"College stopped being a good investment about 20 years ago," he or she said. "If you have money to burn, jump in. The place to go for job education is vocational school. Lots and lots of jobs available using this method, the kind of jobs that cannot be exported out of the country."

AP Courses, PSEO, and MOOCs
RobertK, citing his experience as an administrator at a Big Ten university, offered a variety of tips, including looking for alternative ways to earn college credit. "For some students, taking AP courses in high school or less expensive community college credits for lower division courses--all should transfer--will reduce the tuition paid to the college/university," he said. "Take remedial courses in a community college. Also, increasingly low-cost on-line courses (MOOCs) are sophisticated and good alternatives."

Thomas17 also mentioned the financial benefit of earning college credit while in high school and discussed his son's experience with such a program.

"I live in Minnesota and our K-12 education system has an option for high school juniors and seniors called the Postsecondary Enrollment Options or PSEO," Thomas17 wrote. "The state picked up the tab for my oldest child to go to a private college in Minneapolis during his last two years of high school. When he walked across the stage at age 18 to collect his high school diploma he also had over 60 college credits in his pocket. My son is goal-oriented and driven to succeed and was more than willing to forego his high school prom and all the other trappings of high school in this exchange. Was it worth it? Some days I'm not sure, but he's on track to pick up his undergrad from a very good college at age 20 and his 529 plan has enough money to just about cover a master's degree."

Some readers mentioned the importance of having the student invested in keeping costs down.

"We had a deal with our son that he had to pay one-third of the total cost," said Hohum47. "He took this pretty seriously as it was earned working at  Wal-Mart (WMT). In his senior year he had a class where the professor didn't show up for the first day of class. Our son was upset, went to his advisor, told her what happened, and asked to be put in another section. A few days later our son ran into the professor and was asked why he had been upset. [My son's] response was 'I'm paying for this. I want my money's worth.' The best way to cut costs is for the student to have some skin in the game."

RobertK suggested that students take advantage of on-campus jobs, adding, "Big research universities often have undergraduate research opportunities that pay reasonably well and afford opportunities to work with a faculty member on his or her research. In addition to pay, it is a great opportunity to learn, and a leg up on graduate school admission."

For dadler, saving money on college means putting some spending decisions in the student's hands.

"Place the total responsibility and costs for books on the student," dadler suggested. "They save their own money buying used books on campus, AbeBooks,  Amazon.com (AMZN), and other online sites for used books or even renting books. They also then realize reselling or trading books earns back cash or saves them cash. If they buy new it is their decision as they are paying."

Of course, one of the best ways to save on college costs is to find free money--namely scholarships and grants.

"Apply to as many scholarships as possible," advised SeanDWB. "Don't be discouraged if you don't find many that apply to you. There are tons out there. Even one scholarship is money you don't have to spend."

Another option is working with the school to get the best financial aid award possible, said puravida.

"Many people do not realize that financial aid awards can be negotiated," he or she wrote. "My son got into five schools. Our expected family contribution varied by school from $56,000 to $30,000. I spent hours on the phone with the financial aid offices, finding mistaken assumptions in their calculations, providing them with additional information, playing one school off the other, and so on. He ended up at Williams College--listed by Forbes as the best school in the country--after negotiating the financial aid award [to improve it] by $16,000."

A handful of readers mentioned ROTC (Reserve Officers' Training Corps) as a great way to lower college costs, though it does require a commitment to join a branch of the military in active duty after graduation.  

"It's hard to beat an ROTC scholarship," wrote Chang. "I was on a Navy ROTC scholarship at Cornell from 1980-84. They footed quite a large bill, though I assume the costs have probably gone up a lot since then. And serving five years in the Navy was one of the best experiences of my life."

Off the Beaten Path
Some readers offered up less well-known approaches to saving money on college. For example, willeen suggested, "Have your daughters apply to engineering schools, if so inclined, to get merit scholarships. Many schools will give merit money to women as part of trying to get them into engineering. They can always transfer out if they do not like it, but it is hard to transfer into engineering."

"The thing that made the biggest difference for us was that we bought a condo for my son and later my daughter to live in while at Baylor," wrote Rogersbank. "This strategy is not for everyone, but the roommates and small tax advantages effectively meant a zero housing cost. That is without the small gain on sale later. If you use this strategy, get big buy-in from your student.  I told my kids that they got the 'profit' from the house, but they had to take responsibility for all that comes with ownership. After we bought it, I told my son that the selling agent thought that it needed new carpet and paint and that was his responsibility. I mistook his hesitancy as 'work avoidance.' When I asked my son why he was concerned, he asked if I would deduct the carpet and paint from the 'profit.'  I said I would and he told me the carpet was fine and that he would paint! Home run. The roommate paid enough to cash flow the mortgage and expenses and my son got a life lesson that no college class could teach."

But for a truly unusual way to save money on college costs, norbertc's suggestion was tough to beat.

"Consider studying in Germany or France," he wrote. "My daughter attends a French engineering school. The annual tuition runs about 850 euros [or about $1,100] per year. However, competition for spots at the top grandes écoles [elite professional schools] is beyond fierce. Students first do two or three years of prep school and then sit for the concours, a rigorous series of written exams followed by oral exams for those who place well in the written part. About a quarter of the students are from foreign countries. Students are required to live on-campus during the first two years. Room and board is about 200-300 euros [$260-$390] per month. Tuition at the top German technische Hochschulen is comparable at about 500 euros [$650] per semester."

Of course, attending college overseas means adding on some significant travel costs--not only for the student him or herself but for any family visits. But even if norbertc's suggestion isn't for everyone, it's a good reminder that creativity always comes in handy when looking for ways to save on the high cost of college. 

Comments have been edited for brevity and clarity.