We’re conditioned to accept the high cost of a college education as the price to be paid for the economic future we want for ourselves and for our children. But, more than a trillion dollars in student loan debt later, it’s time to rethink the fundamental value proposition of a four-year college education.
Start by considering the point of entry.
Have you driven by a community college lately? If so, you’ve probably noticed how the parking lots are overflowing. That’s because more and more students are commencing their higher educational pursuits locally at schools that charge tuition rates that are on average, less than half that of their four-year counterparts. The key is to ensure that the credits you earn are fully transferable to the four-year school from which you want to attain your baccalaureate degree.
And, when it comes to choosing that four-year school, be sure take a look at the government’s College Affordability and Transparency Center site, which not only provides tuition and fee summaries for the nation’s schools, it also tracks institutional inflation rates. This is really important to know because you’re signing up for two, three or four years, not just one.
Next, consider the extent to which you can test-out of certain core-course requirements. For example, the same fine folks who brought you the SAT exams also offer College Level Examination Program (CLEP) tests. There are 33 subject examinations with results that are accepted by more than 2,900 colleges nationwide. And yet, few students are aware of a time and money-saving option that’s been around for more than 40 years. I know because I was one of the first to take these exams! The 12 credits I earned made a meaningful financial difference as I put myself through school.
In addition to the CLEPs, there are also AP tests, SAT subject examinations and a myriad of online courses that can be used to prepare for the course-waiver tests your school may offer.
Also overlooked is the preponderance of needs- and merit-based scholarships and grants. A few semesters ago, one of my students told me about a successful strategy he employed while he was in high school. He targeted every small-dollar scholarship and grant he was able to identify. Sure, it involved lots of letter writing and follow up, but he also knew that his peers were elephant hunting. As such, he encountered less competition for the more than $3,000-worth of awards he was able to garner in the process. I recommend exploring College Scholarships.org and FastWeb in this regard.
My next recommendation is to take a cost-per-credit approach to your semester planning. Many schools price their tuition by differentiating between full- and part-time students. For example, at my university, a full-time student is one who takes 12 to 18 credits per semester, for which he or she is charged a flat-rate. Therefore, on a cost-per-credit basis, a student taking 12 credits is paying 50 percent more than one who is taking 18. As such, I recommend at least one “heavy” semester per year. Doing so, can shave another 9 credits-worth of time and cost. So can taking intersession courses at less expensive colleges near home. Most schools will permit the transfer of a limited number of credits taken off-campus (my university limits that to 6 credits).
And finally, focus on the incidentals—housing, meals and supplies. While many schools mandate on-campus living for freshmen and sometimes, for sophomores as well, off-campus living can be a less expensive alternative. Just be sure to think-through the mechanics. For example, four or six students sharing a two or three-bedroom apartment sounds like a blast until it comes time to pay the rent, utilities and cable/internet bills. You’ll want to ensure that the money’s in the bank ahead of time, especially because mom or dad will likely be asked to co-sign the lease.
As for the meals, when on-campus eating is mandated, I recommend going for the least costly plan to be supplemented by the food you can prepare at home. After all, isn’t this why God invented the mini-fridge? And, as far as textbooks are concerned, explore the option of forming study groups with shared texts. Given the high cost of these books and the fact they seem to be revised every other year, I permit my students to do that.
While I truly believe in the value of higher education, I also believe in the higher value of education that doesn’t cause you to go broke in the process.
Mitch is the author of College Happens: A Practical Handbook for Parents and Students, Life Happens: A Practical Guide to Personal Finance from College to Career-2nd Edition, Life Happens: A Practical Course on Personal Finance from College to Career and the forthcoming Business Happens: A Practical Guide to Entrepreneurial Finance for Small Businesses and Professional Practices, to be published Summer 2013. © 2013 M.D. Weiss LLC. All rights reserved.
This blog was provided by Mitchell D. Weiss an experienced financial services industry executive and entrepreneur, adjunct professor of finance at the University of Hartford, a member of the board of the university’s Barney School of Business and co-founder of its Center for Personal Financial Responsibility, who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on May 11th, 2013. Listen to this broadcast on YouTube here.
Photo Credit: stevendepolo