Customize Your Plan to Save Money on College

Updated: May 25, 2020

Happy student thinking about her bright future.

The cost of college is rising at an unsustainable level. Average tuition at a private four-year college in the United states is $48,000 a year, according to College Board. That’s almost as much as the median American household income of $61,000. Federal student aid is available to students willing to take out low interest loans, but those loans can sometimes take a lifetime to payoff and could result in years of wondering whether it was all worth it.

From an economic perspective, going to college is the biggest bet on yourself you will ever make. You are basically staking that future earnings from the degree you earn will outperform the opportunity cost of 5 years of wages plus $100,000 of tuition paid. This is a massive investment of time and money that needs to be recovered. And the more money and time you spend, the larger that mountain is to climb in the end. Yet 2.5 million students take that bet every year. It is crazy if you stop and think about it. Only a third will graduate in four years, and about half in 6 years. Many students simply go in the direction that the wind takes them, without any plan for taking this investment serious. And the colleges that take their money love them for this. But the smart students have a plan. A plan that minimizes costs but maximizes outcomes.

The best outcome is a degree in hand, in a short time span, from a reputable institution. The worst outcome is taking out a large amount of debt and not having a degree. Always keep that in mind.

Beneath the veneer of the ivory tower is a big business, a trillion-dollar industry in fact, and that bachelor’s degree, is the most prized product being offered. The college system controls that credential. Colleges and universities invented “degrees” as a way to ensure some standardization across the many colleges in the United States. The accreditation system ensures that you will spend both time and money at college, regardless of what you know or what you have learned along the way. It’s overall, not as sinister as I make it seem, but the ability to confer these degrees has become the main justification for their cost. It’s not the high salaries of your professors you are paying for. It’s simply a matter of supply and demand. You need that degree (high demand), and they have set up a powerful barrier to you attaining it (low supply by limiting accreditation options). They want your money, and they will most likely get quite a bit of it.

I wish I could tell you that there are free online courses available, that lead directly to degrees so long as you prove your knowledge through a thorough and fair assessment. However, that does not exist. It may not ever exist. Colleges aren’t giving this stuff away. But there are some options for saving massive amounts of money if you do your research and make a plan for yourself. In this blog, I will show you how to use online resources to create a plan to get what you want out of college, and not take out a second mortgage.

Students taking a CLEP exam

1. Get CLEP Credit

Students in high school take AP courses for many reasons, one of which is to score high enough on the AP exam so that those credits can transfer to colleges. And hey, it’s a great idea that I support, because AP only cost $94 and looks great on applications. But AP is part of that fly trap system that draws students in, but really is there to benefit teachers and schools. Teachers and high schools promote it because it gives them stature and looks good on paper. But there’s another option, and it involves NO TEACHERS at all, and leads to college credit, and that is the CLEP program. CLEP “courses” are optional and free online. You can even skip the course, and just take the $89 test. The credit you will receive is accepted almost everywhere, provided you get a high enough score. It really is that simple. There’s not much catch to it, but before you take the course, it is helpful to know which school you’d like to attend, so as to ensure your credit will transfer. The courses offered by CLEP range across all disciplines and are limited to introductory courses. Generally, only 4 courses, or 12 credits maximum will transfer. But 4 courses is almost an entire semester! That’s thousands of dollars if you plan it right. But check first to see if the school you are planning to attend accepts CLEP credits, which is super easy to do using this College Board website. Next pick the introductory course in your planned major of study, and a few others that you think will count as electives.

Community college students studying together

2. Go to Community College for 2 years

Is this low hanging fruit? Yes! Duh! But I would be completely remiss if I told you not to take your first two years at community college. Ok, this is not for everybody. The high achievers, the academic 1 percenters, please, go to Harvard, Yale and Princeton. But the rest of you need to lower your investment and take this deal. Community colleges are way cheaper than other higher education institutions coming in at a third of the cost at about $4,000 a year. Not only that community colleges usually accept CLEP credits as well. So if you can manage to get 12 CLEP credits, plus 2 years of community college, that’s about $6500 you have spent on tuition so far and you are halfway done.

Now a few caveats here. Community college is not for everyone. It is not a fun college experience. There is very little campus life. But I taught at community college. I also taught at a prestigious state university. At the community college, I observed 2 types of students. One type of student seemed to blow in with the breeze, gave zero effort, and was almost certain to flunk out. Too bad. The second type of student had a plan, aced the course, and knew exactly what they were doing. These students transferred to highly reputable universities and it was no problem. They were as good, or better, than my best students at the state university. Be this student. Get good grades. Transfer those credits to a good college.

Student at a public university

3. Transfer to a public, four-year university

Price and quality are so often linked in American capitalist culture that we almost take it for granted. A Mercedes is better than a Ford in a multitude of ways. Mansions cost more than trailer homes. A fancy restaurant blows away Burger King. You get what you pay for most of the time. This axiom, however, simply does not hold true in the warped and twisted economic world of higher education. In fact, you should be suspicious of expensive degrees more often than not. If it isn’t a name everyone recognizes (Harvard, NYU, Berkeley, Yale) then you probably are overpaying.

If you are not going to an elite university, you should be bargain shopping. Do not get caught up in the sales pitch of a middling high cost university. Find a lower bidder. Generally speaking, few employers would give a damn if you went to Eastern Kentucky University rather than Western Kentucky (I made these up). Seriously. At some point, a bachelor’s degree is simply a bachelor’s degree. There are a few exceptions here. Private, for profit universities such as University of Phoenix or DeVry should be avoided. People assume these are bullshit degrees. That could hurt you in the long run. Another exception is if you are planning on later applying to a Master’s or PhD program. Those programs care a little bit about where you went to school, but it is nothing to be overly concerned about. Saving money is more important.

Here’s what you should do. Transfer from a community college to a public, state university in your home state. Community colleges are basically in the business of doing this, so be sure to set up a plan with an advisor there once you enroll. Tell them you want to go to a state school that is good but has low tuition. They should be able to take it from there.

Here are the facts. In state tuition is almost always cheaper than going out of state. Don’t even look out of state unless you have a compelling reason to leave your state of residence. And go to a public university (usually has the state name in it). Public universities are generally cheaper than private ones because they receive some state funding for their operations. You literally are already paying for this out of your taxes. Not only that, but public state universities have a pristine reputation, all of them, in every single state. Take your CLEP and community college credits and cash them in. Spend the next 2 years finishing your degree at “WHATEVER STATE UNIVERSITY” and people will pay attention to you. Lots of people go to these schools, and yes, if an interviewer sees that you went to their alma mater, you have a leg up on the competition. A job interviewer seeing that is the next best thing to seeing Harvard or Yale on a resume.

So that is my plan, customize it for your own situation. Here are some other ways to lower the cost of attending college.

Computer screen

Free Textbooks Online – If you have the option, there are free textbooks available via openstax.

Get a scholarship – Use this tool to search for scholarships online. Make it a goal to complete as many as possible. Don’t give in to negative thinking that you won’t get a scholarship.

Online Schools – Be careful with online colleges but if you don’t like your options of state schools, this is a viable option. They range in quality and cost. Do your research. Furthermore, be realistic. The greatest problem with online schools is people drop out after spending their hard owned money. This goes against everything in this article. Why do they drop out? Probably because without a supporting social structure many people simply lose interest. Online schools might be difficult depending on your life situation. Will others around you support your online learning by giving you the proper space for your studies? Do you work full time? Have kids? Identify the responsibilities in your life other than school. These could be obstacles, but don’t let it stop you. Find a way, commit to it and do it.

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