College planning: Strategies to stretch college dollars to the max
By Brett Anderson
St. Croix Advisors
In a previous blog, we explored the three main ways to pay for college. Now that you know how to pay for college, let’s talk about how to stretch your college dollars to the max.
- The three year option: With the cost of college skyrocketing, it only makes sense to minimize the damage. If your student is already set on a program or major, seek out college options that allow him or her to finish the program in three years. This can shave off 25 percent or more overall from your total college bill. At the very least, encourage your student to take their generals up front, so they get a better idea of what they want to pursue to avoid lengthy — not to mention costly — additions in curriculum for switched majors and indecision.
- Pre-payment: Many colleges offer the option for tuition pre-payment at current rates. If your child is just starting college, you may have the option to pay in full and up front through their senior year.
- Take the tax breaks: From deducting college loan interest to claiming tax credits, there may be a tax break out there for your family. Dependent on situation and income, of course, it pays to consult your tax preparer to determine how you can best take advantage of what’s out there.
- Living expenses: If your student will be living away from home to attend college, there are many more options than just the dorms and standard "all-you-can-eat" meal plans. Look for co-op housing that allows students to work for just a handful of hours a week in exchange for a low-cost housing option and some meals. Additionally, living off-campus, in a dorm with fewer amenities, and even in a sorority or fraternity can lower living expenses significantly.
- Negotiate: Don’t just settle for the financial award you were allotted and don’t just quickly say yes to the first college that accepts your student. Use those situations to negotiate for a more favorable situation, especially if your student is a top performer.
- Shop around: When it comes to loans, you are not required to choose the loans (generally the Stafford and PLUS loans) that the school packages with their awards. Many times, depending on credit score of course, you can get better rates if you shop around. Remember, the flexible bonuses that are part of the federal loans are only worthwhile (in exchange for their respective interest rates) if they’re applicable to you and your family.