FOX Business’ Lydia Hu talks to Jessica Daly and her daughter Madison about the rising cost of college as tuition has doubled since 2001 on ‘The Big Money Show.’
For many students and families, the rising cost of higher education feels like an insurmountable challenge. Questions like “Which school is right for me?” or “Does fame carry more weight than technology?” carry their share of the weight, but one question always stands out: “How can I save as much money as possible?”
The numbers show total student loan debt – including private loan debt – in the US could be as high as $40,681, while the average public aid borrower owes $37,853 per person.
Although FAFSA (Free Application for Federal Student Aid) is an important tool for opening grants, loans, and work-study program opportunities that can help reduce some of the costs of higher education, relying only on FAFSA can sometimes lead to astronomical debt, not for all students. they deserve the amount of help they need.
The good news? There are other ways to shave dollars off your education costs. Whether you’re trying to avoid excessive student loan debt or supplement your existing financial aid, these practical, cost-effective options can make higher education more affordable and accessible:
COLLEGE APPLICANTS FACE CONFUSION, CONFUSED BY CHANGING SAT SCORING REQUIREMENTS: REPORT
1. Community College
The entrance to the community college building. (iStock / Stock)
What’s in a name? While attending top universities like Harvard, Stanford, Yale or Columbia may be a dream come true, these schools and others like them can sport a high price tag.
To separate it:
- The College Board reports that the average annual cost of tuition and fees for a 2-year community college for the 2022-2023 school year was $3,440 for in-state students.
- The average annual cost of a four-year public university was $9,410 for in-state students and $23,890 for out-of-state students.
- At a private 4-year university, costs increase to $32,410 per year for tuition and fees.
Even completing two years at a less expensive school and transferring to a more expensive institution can lower your college costs.
“That’s huge for us in California, where you do two years at a junior college and then transfer to, say, UC Santa Barbara, UCLA or Berkeley,” Greg Kaplan, a Golden State-based college admissions strategist, told Fox News Digital. .
Kaplan emphasized that many students start at community colleges and later go on to top universities. This approach allows students to earn a degree — and 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 at Arizona State University for two years with a full-tuition scholarship, then transferred to Northwestern, which is more expensive and more prestigious. So he only had to pay for two years,” he explained.
2. Make your employer your partner
A barista pours hot milk into a cup labeled ‘Steven’ inside a Starbucks Corp cafe. in the Sandton area of Johannesburg, South Africa, on Monday, Jan. 14, 2019. (Waldo Swiegers/Bloomberg via Getty Images/Getty Images)
Some employers will reimburse tuition costs for degree programs that may improve the skill set of their employees on the job. In other words, you save money and your employer gets a skilled, efficient employee. It’s a win-win for both parties.
Tuition reimbursements are typically up to $5,250 per year in accordance with Section 127 of the Internal Revenue Code (IRC), which allows companies to provide that dollar amount with tax-free assistance. This can be written off as a business deduction for the employer and employees get a refund as a tax free benefit.
But some employers may do more than that, even covering the cost of a full-time employee’s degree.
“It’s not just about matching the employer,” said Kaplan. “If you’re a young person, and you’re going to be an entry-level employee, you might want to think about working for a company that can be your partner… a place like Starbucks because they can take online classes at Arizona State, and they’re doing it for their degree.”
Starbucks’ College Achievement Plan (SCAP) offers eligible employees 100% upfront tuition to earn their first bachelor’s degree through Arizona State University’s online programs.
Amazon’s Career Choice Program similarly prepays tuition and fees up to a yearly limit, and Walmart’s Live Better U program gives eligible Walmart employees the opportunity to expand their education on the company’s dime.
3. Parental Benefits for Employees
A person is holding a jar full of savings. (iStock / Stock)
Rather than relying solely on their employer, some college applicants can benefit from their parent’s or guardian’s employee benefits, often through a company scholarship.
Companies such as Chevron, PepsiCo, and Wells Fargo offer scholarships for the children of eligible employees. PepsiCo’s Foundation Family Scholars program, for example, offers a renewable award of up to $5,000 to selected winners who will pursue an eligible educational program with these funds.
After being admitted to the university, it is worth checking the employer’s benefits and applying for a scholarship if the eligibility criteria are met.
This amount, combined with the power of federal and state aid, can significantly reduce the burden of higher education costs.
4. Open a 529 Account
A container with a label and money on the table. The idea of saving money. (iStock / Stock)
While it’s best to open a 529 account when college savings begin when the college applicant is a child, creating an account when you’re older 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 educational expenses. Contributions to this account grow tax-free, and withdrawals are also tax-free if used for qualified educational expenses (eg tuition, utilities, room and board, etc.).
It is different from the basic savings account as the money has the potential to grow instead of sitting down.
“If you can put away a few thousand dollars a year, of course it all helps,” Kaplan said.
However, 529 only extends so far. Kaplan notes that 529 plans alone may not cover a large number of tuition costs, especially at private universities.
“It wasn’t enough to pay for my expensive private university,” he added.
5. Prioritize the SAT/ACT
Close up of a pencil on a page of an SAT college entrance exam preparation book, taken on August 6, 2017, in Melville, New York. (Thomas A. Ferrara/Newsday RM via Getty Images / Getty Images)
Although many colleges have maintained a test-optional policy in the post-pandemic years, 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 to reduce their overall student debt burden.
“For example, if you have a 32 on the ACT or a 1400 on the SAT, that will automatically qualify you for the grand prize. [approximately] $30,000 dollar scholarship to the University of Alabama, Tuscaloosa,” said Kaplan, noting that 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 you don’t have to. Giving it your all can pay for the entire course.”
Although taking long hours of tests seems intimidating to many high school students, putting in hours of practice by taking extra courses, practice tests, and even seeking help from tutors can lead to a very different financial result in the long run.
6. Consider consortium plans
FOX Business Correspondent Lydia Hu has the latest on why fewer students are applying to college on the “Big Money Show.”
One lesser-known way to save on college costs is through state consortium programs, which allow students to attend public universities outside the state at reduced tuition rates. These deals can help families avoid the high price tags often associated with non-resident education.
In states like California, the Western Undergraduate Exchange (WUE) is changing the game. This program allows students to apply to 150+ colleges in the western US – including schools throughout 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 school and the same tuition as in California, so it’s cheaper for me to go to the University of Utah at $11,000 a year than it is. study at any public university within the state of California,” Kaplan explained.
“There are different consortia in the Northeast, the Southeast, the Midwest, and the West, and these are the ways that universities want to divide their students based on geography. I think a lot of people don’t realize that these consortia exist and that they can put a lot of schools in the game, and they can end up being right for you. or your child.”
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