Tackling College Costs

Does the prospect of paying college tuition for your kids make you panic? While college can be a major expense, there are ways to minimize the cost.

The California Society of CPAs offers these great tips that can help your student (and family) have a good college experience without spending a fortune. 

Start at a Community College

Is your student hoping to graduate with a diploma from a prestigious, but very expensive, college? That goal may be more achievable if the student starts out at a community college and then transfers to his or her top-choice after earning an associate’s degree.

Community colleges are generally very affordable, which can help you stretch your education budget and perhaps make it easier to pay for the last two years at a costlier school. To ensure this plan works, confirm that the college your student will transfer to will grant full credit for the courses he or she takes at the community college.

Your student should also be sure to take all the right prerequisites for the classes necessary for his or her intended major and any other graduation requirements. 

Accelerate the Process

There’s no rule that says college has to last four years. Your student can aim to finish in less than that. It’s often possible to get a jump on graduation simply by taking college credit courses in high school.  This can cut down on tuition, as well as additional living, transportation and other associated expenses.

Graduating sooner also means your student can begin earning an income sooner.

Stay in State

Going to a public university in your home state is typically much less expensive than going to a private or out-of-state public university. If the in-state public college isn’t your student’s dream school, remind him or her of the value of graduating with no (or lower) student loans and the impact it can have on a post-college budget. It may help make the in-state school more appealing. 

Anticipate Possible Tuition Hikes

In-state tuition and fees at public four-year institutions rose 3.2 percent per year beyond inflation during the last decade, and 2.4 percent at private nonprofit four-year institutions, according to the College Board. That means you should factor in the possibility that the tuition you pay during your first year may rise steadily each year.

Research the recent history of tuition increases at your top choices and determine whether you’ll be able to afford the highest rate you may have to pay once your student gets to senior year.

If your student is already in school and faced with a tuition hike, find out whether the higher cost qualifies your family for more financial aid. Summer or campus jobs are other ways to cover a spike in tuition. 

Manage Student Loan Money Wisely

Some students may be tempted to borrow the maximum amount of money possible but student loans should only be used for needs, not wants. Your student shouldn’t borrow money and then spend it on weekend entertainment and spring break trips.

If your student does borrow more than they need, have them save that money and borrow less the next year. This will help reduce the amount of their outstanding loan balance, so there’s less debt hanging over their head after graduation. Remind them that the smaller their loan balance, the less interest they’ll have to pay over time.

Your CPA Can Help

These are just a few of the options that your CPA can help you examine as part of your college planning. Turn to your local CPA with your questions about paying for college or any other financial concern. Visit Find a CPA to find one near you. For more tips on tackling college costs, visit 360 Degrees of Financial Literacy.

Copyright 2018 American Institute of Certified Public Accountants.

The Money Management columns are a joint effort of the AICPA and the California Society of CPAs as part of the profession’s nationwide 360 Degrees of Financial Literacy program. Listen to podcasts with more financial tips.