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Best Strategies for Saving Money on a College Degree


Everyone wants to get the best education possible, but is saving money on a college degree really possible? Of course it is! As with most purchases, there’s a low end of the price range for a college degree and a high end. Don’t make the mistake of assuming you have to sign your whole life away to student loans. These are the best strategies for saving money on a college degree. 

Average Cost of a College Degree

Getting a college degree is often expensive, it’s true. And remember that if you pursue a four-year degree, you usually incur many more expenses than tuition alone. The cost of college has doubled in the past two decades.  

Categories of College Expenses

  • Tuition and fees
  • Room and board (housing and meals)
  • Textbooks and other supplies
  • Additional housing or transportation expenses (utilities, entertainment, etc.)
  • Cost of lost income potential during college
  • Cost of borrowing (interest on student loans)

The average cost for a student living on campus at a 4-year institution is $21,216 annually, which comes out to $84,864 over the full four years. 

$84K by itself is a pretty significant sum, but it gets worse. Taking into account other factors such as interest on loans and lost wages over the years of college, a bachelor’s degree can cost $400,793!


Since $400K and even $84K are hefty amounts to spend at age 18, it makes sense to figure out ways of saving money on a college degree! 

Fortunately, you (or your college-aged student, if you’re a parent or know someone headed for college), it’s not too late. Selling your soul isn’t a requirement for getting a college degree. 

As scary as the numbers may look, there are actually a lot of (fairly easy) strategies you can use to save on getting your college education. It takes some planning and commitment, but reducing the total you need to spend on college is absolutely worth the effort.

Look for Opportunities in High School For Saving Money on College

A person’s journey to a college degree begins long before they turn 18. A savvy student will be looking into every opportunity available during high school and taking advantage of money-saving tips. 

Be a Great Student

First of all, being a fantastic student can help prepare you for college. It shows you’re committed to your education and will likely continue to be committed in college. Working hard and getting excellent grades can help a student be more likely to earn scholarships that help pay for higher education. 

Dual-credit programs

Many high schools offer dual-credit programs that let students take college courses while still in high school. These classes may be offered at a nearby community college or even on their own high school campus. 

You need to look into whether your dual credit will transfer to the college of your choice. Also, think about whether you plan to attend a school that’s difficult to get into. Admissions counselors may be more impressed by AP test scores than by dual credit completion.

CLEP testing

A growing number of colleges accept CLEP test results in order to award college credit to high school students. Taking a CLEP test to prove your competency in a subject area is a great way to reduce the number of courses you need to take in college. 

There are CLEP exams in areas such as Composition and Literature, World Languages, History and Social Sciences, Science and Mathematics, and Business. A student will generally need to study and prepare a bit to do well, but if they take a CLEP test just after a corresponding high school course, it can be pretty easy to pass. 

CLEP tests cost a small fraction of what a typical college course would cost. You have to check with your chosen college or institution to make sure they accept CLEP results, but by planning carefully, you could save yourself a lot of time and money by testing out of multiple classes before even setting foot on a college campus. 

AP Tests

You’re probably already aware of Advanced Placement (AP) courses and tests. It can depend on school size, but most high schools offer at least a few AP courses. Much like a CLEP test, getting a passing score on an AP exam can help a student bypass a more-expensive college course. Again, this saves time and money. 

AP tests tend to be much more challenging to achieve a passing score than a CLEP test, so be aware of that. 

Any student planning to attend college should be thinking about ways to test out of certain college requirements in advance. These tests and dual-credit programs are amazing, and not enough people take advantage of them. Just keep in mind that by testing out of several classes, you might be able to graduate a semester or a year early! That all means more money in your pocket by the time you’ve earned your degree. 

Work Through School

One of the best strategies for saving money on a college degree is so ridiculously simple. Work! 

Yep, by just working throughout high school and college, a student can save huge amounts of money. Sometimes people forget this option because it’s so ingrained in us that we’re in a student loan “crisis” and we assume everyone must take out $100K in loans in order to succeed. 

Good old-fashioned work is an underestimated strategy. I know I certainly didn’t work as much as I should have while I was in school. I had a part-time job here and there, and I worked over the summer, but I could have cut back on the loans I took out by working more. 

Any high-school student should be working part-time to begin saving for their college education. Yes, at that point you’re often trying to pay for your first car and the prom, but college shouldn’t be ignored in your working and saving plans. 

In college, your working opportunities will increase as well. Take the time to look for the best income opportunities. Instead of taking the first minimum-wage job you can get, try to think creatively and find work that pays better.  

College students can even flex their entrepreneurial muscles and start their own business. Don’t be limited in your beliefs of what you can accomplish while a student. 

You might be thinking, but how can a college student focus on their studies and hold a job? Well, we often allow our tasks to fill whatever amount of time we give it. So if you’re working 20 or more hours a week at your job, you’ll need to budget your studying time really carefully. 

Working will decrease time for fun (but that’s another money-saving benefit)! Instead of spending money on partying and entertainment, you’ll be spending time making money. All of what you earn can help you cash-flow your college education, reducing the total amount of student loans you take out. 

Apply for Scholarships and Grants

The best way to earn a lot of scholarship and grant money? Be an amazing student and then apply for as many scholarships as you can. 

While not everyone will be able to completely fund their college education through scholarships, there’s a lot more money out there than you think. Whether you’re a parent or a student, do meticulous research and find out about tons of obscure scholarships that can help you in saving money on college. 

One of a high-school senior’s part-time jobs should be researching and applying for scholarship funds. It takes time to do these right. Hard work and applying for every scholarship you’re eligible for can shave thousands of dollars off the cost of a college degree. 

Parents: Start a 529 College Savings Plan

If you’re a parent of a young child, a great step helping them in saving on a college degree is setting up a 529 plan. 529 plans are tax-advantaged savings accounts that you can stash money in for educational expenses.

Even someone who isn’t a parent can start a 529 account for someone they love. Money deposited in this type of account grows tax-deferred, and withdrawals for qualified educational expenses are tax-free. You contribute money to the account which is then invested in various mutual funds.

A 529 savings plan can give a kid a solid start on their college fund. Most 529 funds can be used not only for college costs, but K-12 schooling expenses as well. Rules and contribution limits may depend on the state you’re in, so be sure to do the research to find out what your state offers.

Prepaid tuition plans are a similar option, but beware of restrictions on these. Only certain states provide these, and they may restrict which schools a student may attend. But for many people a prepaid plan makes sense as it can help them lock in current prices.

Students: Know Why You’re Going to College

You should not be going to college if you don’t know why you’re doing so. And no, “because everyone else is doing it” is not a good reason. So every upcoming college student needs to get clear on what the purpose of a college degree is.

A college degree isn’t a requirement for every career. So if you (or your student) plans to pursue a career that only requires two years of college or a brief training program, don’t waste money on a fancy college program.

No longer is it acceptable to go to college merely “to find yourself.” That’s fine if you’re loaded and have money to burn, but quite frankly, most of us aren’t in that category. So even if not entirely sure of the career path you want, have a clear sense of direction. Learning what you need to in order to qualify for a job that pays well is a great goal for a college student.

Maybe getting the first two years or associate’s degree out of the way as inexpensively as possible, and once that time is up, you’ll have a better idea of what degree to pursue. 

For those who know the career they want, checking BLS (Bureau of Labor Statistics) info on that career can be helpful. Learn the average starting salary and career outlook, plus how much education is required.

 If you’re interested in a career that only requires a two-year degree or certification program, then get that done and get started earning money right away. There’s no shame in not having a four-year degree. Heck, tons of trades pay good salaries, which means you start earning sooner than your 4-year-degree friends AND don’t have to take out as much in student loans. 

Take Student Loans Seriously

Read the fine print

When you decide to apply for the FAFSA (Free Application for Student Aid), know that this is not free money. This is an application to borrow money from the government. 

Any educational loans that a parent or student takes out must be paid back, with interest. Read the documents carefully before signing anything. Know the terms of the loan. 

What is the maximum amount you can borrow? Can you pay it back early, or are there penalties? What is the interest rate on the loan, and can that rate go up over time? 

It’s crucial to know your loans backwards and forwards. Understand exactly how much you are borrowing, when you’ll need to begin paying it back, and how much you’ll pay in interest.

Pay student loans back promptly

I can’t stress this point enough: pay back your student loans as quickly as you can. Yes, student loans are usually considered “good” debt. And for many students, they are the only way to obtain a college degree. But you do not want to be saddled with your student debt twenty or more years from the time you graduate. 

Let’s hope predatory lending practices become a thing of the past and for-profit colleges disappear completely. But for now, be sure that if you take out any student loans, you make a repayment plan ASAP. 

You’ll have a grace period of nine months or so after graduation before you have to begin repaying your loans. And sometimes there are strange changes to the rules, such as the CARES Act pausing student loan interest due to the COVID-19 pandemic. But in general, you need to pay back your loans promptly. 

Every year you have to make student loan payments means less money going towards your other goals: buying  a house, starting a business, moving abroad. Living on the cheap for a few years after college can accelerate your debt payoff and lead you to freedom much sooner.

Go online and find a student loan repayment calculator. You’ll need to input the total amount you owe, the interest rate, and then you can play with amounts to see how much you’d pay in interest depending on how fast you pay them off. It’s really motivating to see how much less interest you’d pay by hitting the loans hard for 5 years versus dragging out payments for 20 years. 

Beware of student loan “forgiveness”

If the administration ends up approving some form of student loan forgiveness and you’re eligible for it, by all means, take it. But beware of some of the risks and caveats. 

The Public Service Loan Forgiveness (PSLF) program has become a cautionary tale. A staggering 99% of those who applied for PSLF have been rejected. This may be due to incomplete paperwork, having the wrong type of loans, or some other kind of misinformation. Plainly speaking, the whole thing has been a mess. 

So if you are expecting your loans to be forgiven, just be cautious and remember that it isn’t a solution for everyone. And whatever program you are counting on, triple-check that you’re following all the necessary protocols to be eligible for forgiveness. 

College Doesn’t Have to Be a Financial Crisis

Please don’t believe that college has to be a devastating blow to your finances, whether you’re a parent or a student.
Saving money on a college degree is absolutely possible, if you examine the strategies available to you and take action.

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Personal Finance Writer
Kate Underwood is a personal finance writer who frequently annoys her friends and family with finance recommendations. She graduated from Wheaton College with a teaching degree. She pivoted a few years ago, leaving a longtime teaching career to pursue freelance writing, and has loved every minute of it! She’s a mom of two and in her free time enjoys all things related to nature, hiking, and The Office.

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