Just thinking about paying for college can keep parents up at night. The good news is there are ways to save for higher education and cut tuition costs.
Just thinking about paying for your child’s college education can be daunting, if not downright scary.
Even if you began saving for college when your child was a baby, it’s challenging for most families to have enough to cover the high cost of tuition. However, there are lots of ways to maximize college savings — and cut tuition costs.
Tuition prices at most colleges are in the tens of thousands per year, even before you add in the significant costs of housing, meals, books, travel expenses, dorm supplies, and other fees.
Luckily, that doesn’t mean your child will be priced out — regardless of your financial situation. In fact, while saving as much as you can to pay those pricey college bills is key, there are many ways to reduce the overall tuition costs.
Tips for Saving for College
“It’s crucial for parents to start saving early,” says Dr. Robin Holmes-Sullivan, president of Lewis & Clark College. “By putting in a little bit over time, you’re going to really be able to build up those resources.”
But if you haven’t started putting aside funds to pay for your child’s education, don’t panic! It’s never too late to start.
One of the best ways to do this is by opening an account with Oregon’s education savings plan, Embark, formerly the Oregon College Savings Plan. Embark lets you grow and use your dedicated college fund tax-free. In addition to college, these funds can be used for a range of other educational opportunities, such as trade school, apprenticeships, or certificate programs. Parents will also be eligible for a refundable tax credit for their yearly contributions.
One helpful strategy is to set aside a regular chunk of money toward your child’s tuition. “As our kids graduated from diapers, we put our diaper money each month into our Embark account, and then as they grew out of day care, we had extra cash to put aside each month,” says parent Jennifer Satalino.
Each Embark account is tailored to your child’s age and post-high school plans. The funds are typically designed so that how the money is invested becomes more conservative as the student approaches enrollment in college. However, you can customize how your child’s funds are allocated among stocks, bonds, and cash investments to suit your preferences. Pro tip: You can also share account information with friends and family who may want to contribute directly to your child’s fund. Another option for building the account is establishing monthly contributions, like money from the BottleDrop program, for example. “We love that we can use the BottleDrop program to automatically contribute to our Embark account,” says parent Eric Thomas. “All we need to do is put bottles into a green bag and take it to the grocery store.”
Ways to Cut Tuition Costs
While the total sticker price of sending a student to college is often exorbitant, most students do not pay full price. Let us repeat that: You are unlikely to need to pay full price.
Typically, scholarships, grants, and other forms of financial aid can knock thousands off your child’s bill. This is usually true regardless of your family’s income, which means even middle to upper-middle-class students likely qualify for significant discounts.
A financial planner or your student’s high school counselor can help you understand how your financial picture lines up with potential financial aid. You can also call the financial aid offices of prospective schools to discuss your potential costs and aid.
How Much Aid Will You Get?
Now that you’ve looked into how to get financial aid, the next big question is: How much will I get? Factors that will influence the actual cost of your child’s education (including tuition and room and board) include their high school grades, extracurriculars, their intended major, the cost and financial aid policies of the schools they apply to, and your family’s finances.
The out-of-pocket costs and how much aid your child receives tend to vary dramatically from college to college. So you will want to review fees and financial aid offers closely when your child makes their final decision. Note that some schools (such as Reed College in Southeast Portland, Harvard University and Princeton University) offer very generous packages to families under certain income thresholds, in some cases waiving tuition altogether.
Don’t Forget FAFSA and Scholarships
Your family’s socioeconomic status may also result in significant financial aid offers. Along with their college applications, they (and you as their parents or guardians) will need to complete the Free Application for Federal Student Aid, more commonly known as FAFSA.
This application will determine how much federal aid your child qualifies for, which may include direct aid that doesn’t need to be repaid, loan offers, and work-study opportunities. Some schools also require you to fill out other financial aid applications along with the FAFSA, such as the College Scholarship Service (CCS) Profile program. Colleges use these applications as part of their own process to determine how much aid they will offer your student.
Additionally, your child can apply for numerous other scholarships either at the specific colleges they apply to or general ones based on various criteria, such as demographics, ethnicity, or for students with specific fields of study, interests or hobbies. It’s worth noting that some scholarships are very niche, so if your child has a unique background, talent, skill or interest, there may be scholarships for that.
For most colleges, your child will be considered for a variety of scholarships and grants during the application review process. Their academic performance alone may qualify them for thousands of dollars in aid, with higher grade point averages usually receiving more generous discounts. This is one reason that it pays off for your child to strive for the best grades possible. If your child plays a sport, they may also earn a scholarship to play in college.
The Perks of Staying In-State
Students from Oregon also qualify for lower rates at in-state colleges and may be offered more generous financial aid. The Oregon Promise Grant makes community college free for students who graduate with a 2.0 GPA or better, with the option to continue their studies at the University of Oregon (U of O) after completing an associate’s degree. The Oregon Opportunity Grant is a need-based grant that can be used at eligible public and private institutions.
Students with a 3.9 GPA or better qualify for free tuition at U of O via the Summit Scholarship. Those with a 3.4 GPA or better who fall below certain family income thresholds can also get free U of O tuition through the Pathway Oregon Program.
Dual Credit Options
You can also reduce your tuition costs by taking advantage of programs that let students start earning college credit (often for very low or no cost) during high school. Note that different colleges have their own criteria for which credits they will accept, with some offering more or less generous credit policies. So, be sure to consider this when pursuing dual credit and when deciding on which college to attend.
Potential options include dual credit programs available at a variety of area high schools, including Portland Public Schools, that allow your student to get credit at Portland Community College for everything from language to business courses. Accumulated credits can be applied to your student’s college of choice, reducing the number of credits they need to complete to graduate, possibly allowing them to finish school early.
Students can also gain valuable credits by taking Advanced Placement (AP) classes and participating in the International Baccalaureate Diploma Programme, which can turn into college course credits if they score high enough on the exams. Another low-cost way to earn college credit during high school is the Baker Early College program offered through the Baker Web Academy.
So when it comes to paying for college, saving up is key, but there are additional ways to save on tuition costs as well.