How to save on college costs

Seven Tips that could save you $50,000 or more

Last week we failed to meet Rick Perry’s challenge to design a $10,000 college degree, so this week, my back-up plan is to give some insider secrets on saving costs on college. These are the tips college professors sometimes tell their friends and parents.  I’ve given these tips often in the last 16 years of teaching. (Just for the record, the sticker price for an average Bachelor’s degree at a Christian college is about $120,000—about $30,000 a year, though the vast majority of students pay far less than this sticker price.) Here’s what we insiders often tell our friends and parents about saving $50,000 or more on college costs.

1. Get a college job yourself.
The biggest way to save on college costs is when dad or mom (or husband/wife) gets a job at the college. Most colleges offer steep discounts (some totally free tuition—an $80,000 discount!) to faculty and other employees as part of the salary package. Colleges figure they can get better qualified people and pay them less by offering this benefit.  But don’t take it for granted. Check several years before your child is a senior (with the college’s HR office) to see what the policy is. Some colleges limit this benefit to certain positions and others phase it in over several years. However, if you can land a job fulfilling your calling and training, and you’re willing to move, this is the greatest way to save money on your children’s college costs.

2. Teach your student to get A’s.
The next best way is grades.  The college aid system is rigged. But it isn’t rigged like most people think (in favor of the poor). It is rigged in favor of the smart. Starting in elementary school, spend an hour a day helping your kids earn A’s in school. Get them into the habit of expecting A’s and working for them. Then by high school when you can’t do as much, they’ll be in the habit. When such a student takes the SAT or ACT they will likely excel too. (If they don’t, help them retake the test.)  Colleges give out millions of dollars in aid and lots if it goes to smart students. (The college where I teach doles out nine million dollars every year!)  A lot of that money goes to smart students—called an “academic scholarship” which is usually based on high school grades and/or SAT/ACT score. For instance, at my college a student with a 3.9 GPA in high school and a SAT/ACT score of 1280/20 can get up to $8000 a year—a $32,000 discount off the sticker price and that’s just the academic scholarship; there are others too. But even if your kid isn’t a 3.9 there are lesser scholarships for less stellar grades and scores.  The extra hour a day you invest with your child starting in fourth grade might be the most highly paid hour of your family income! High grades equals good scholarships.

3. Bank college credit while still in high school.
Besides high school “advanced placement” courses, most colleges also offer credits-in-escrow programs. This means a student still in high school can take a college course in the summer, or online and the credits for that course are waiting for them when they enter college.  Teens might whine about giving up their time for this, but when parents do the raw math they simply insist.  A course like this might cost a couple hundred dollars, an 80% or more discount compared to a full blown college course. Sometimes these courses cost nothing at all—saving thousands per course. This tip alone can save your family $5,000-$10,000 or even as much as the cost of an entire semester.

4. CLEP courses.
The College-Level Examination Program offered by the College Board folk is a way to earn college credit by simply taking a test, usually for a “general education” requirement. If your student already knows a subject why should they have to take another course on it? (I could answer that, but this column is about money, not learning.) The CLEP test costs about $100 and a score of usually 51% will earn your student three hours college credit. It might cost another $100 to transfer the credit to the college’s books, but for maybe $200 the student get three hours credit, 80% or more discount on the regular cost. If your student earned an A in high school algebra they probably can get 51% on the college algebra test. I know clever students who CLEPed 30 hours of credit—all their electives and some Gen Ed and saved $30,000 (one full year of college) by simply taking tests.  Ironically the smarter students CLEP more (see #1 above) so “the rich get richer” when it comes to smart students. (Average students, lazy students and poor students always pay the most for college.) There is one hitch however. While you can CLEP for electives, only certain CLEP tests count for certain required General Education courses. Get the sheet from your college while your student is still in high school so you know which CLEP test counts for which required college course.

5. Take summer classes.
Starting the summer after high school begin taking courses and do it in the college summers too. You can take summer courses at your own college, at a nearby junior college or online. This is a giant money-saver but you have to work to make it happen. If a student pays attention and takes classes in the summer they can save thousands more. Even online courses from their own college can be half price in the summers.  It is like clipping coupons—a little work can save a bundle. However, do the work. Find out from your college’s records office or Registrar what courses would count as a course required at that college. All courses are not equivalent. Most any course from an accredited school might count as an elective, but your college might not accept a community college’s “British history” course to meet their own requirement for “American history.”  Check first. Of course summer school trades-off the enriching experience of a summer internship or hitchhiking through Europe, but this column is not about enriching experiences; it is about saving money. Of course if you can afford the full price of college hitchhike through Europe next summer for sure!

6. Apply for other scholarships.
The cruise ship ethos at most college campuses works against doing most of the above. Taking a CLEP test means studying for several hours, signing up for the test, and setting apart the time to leave the coffee shop to take the test. Most students say they are just too busy to do this. So they float down the river of nonchalance and casually sign up for more debt each year. If you want to do your student a big favor, get more involved in their decisions on these things and hold them accountable for doing it. For example, every year the School of Theology at the college where I teach awards several hundred thousand dollars worth of scholarships.  Many of these scholarships are for specific kinds of students like “a student majoring in pastoral ministry who is from north Michigan” or a “woman headed to seminary after graduation.” There is no way we could remember all these details for 400 students so we ask them. We send an email asking them to take 10 minutes to fill out a simple survey giving details about themselves so we can match up the hundreds of thousands of dollars to the deserving students. Guess what.  More than a hundred of our students never fill out the forms and get nothing. There are all kinds of other scholarships that take a bit of work to get, especially for students preparing for ministry or missionary work. For instance my school has stunningly generous scholarships for Wesleyan Juniors and Seniors headed for ordination—yet some students never get around to signing up with their district as a ministerial student and miss out on these scholarships. Parents who care about the debt load for their children can’t let thousands of dollars get lost just because their son or daughter feels they are too busy. In general, students need a coach to prod them through this process, and a parent is a good coach.

7. Be nimble for the coming changes
All of the above advice is current—it can save you $50,000 or more right now on a college degree. But it will get better in the future—if you keep your eyes open. Education is facing major changes in the future that will benefit families financially. For instance, the federal government went to bat last week for parents by forcing all colleges (by 10/29/2011) to provide a “net price calculator” on their web sites. Most schools have complied, though it may take 23 clicks to get there. And to boot, the government now posts costs, aid and averages for each college at http://nces.ed.gov/COLLEGENAVIGATOR/ . Just type in the name of the college and you can find all kinds of information on colleges including what they give in scholarships and the average scholarships and loans per student.  But even bigger changes are in the wind. If you are nimble and stay aware your student could save thousands more.  For instance, in the not-too-distant future many colleges will offer their first two years of “General Education” online—often at a tuition discount of half or more. In the future your son or daughter might move to the actual college campus with two years of “Gen Ed” already under their belt. They’ll have only two more years to go—their upper level or “major” courses. This is a loss of the campus environment that is so important for Christian colleges especially, so it will mean that local churches will have to step with more for 18-20 year olds. But there’s an even bigger change coming than this: an expected Master’s degree.  College is the new high school—the minimum requirement to get a basic job.  A Master’s degree is the new college—the minimum expectation for entering a profession. You may refuse to believe this if you want, but you’ll do so at your own risk, (or more properly your children’s risk.)  But here’s the good news: Using the above advice many students will have a Bachelor’s and a Master’s degree in just four years. Better yet, in some institutions a Master’s tuition is only half the undergrad tuition (again, no amenities). Once the “online gen ed revolution” happens, your student will move to college as a Junior, stay there only three years and they’ll walk away with a Master’s degree that costs them about half as much as a four-year-on-campus Bachelor’s degree costs now. 

Your excellent feedback last week triggered these thoughts. So, this is what I’m thinking about this week. Got anything to add? Parents of middle schoolers are freaking out about college costs. But it isn’t as bad as they imagine. It just takes some coupon-clipping kind of work to save $50,000 or more on the cost of college.

That’s what I’ll be thinking about this week.

So, what do you think?

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Keith Drury November 8, 2011
www.TuesdayColumn