6 Ways to Save on College by Going Against the Herd

Buying a college education is a lot like buying a car. If only one model and color will make you happy, you have no bargaining power. If you are willing to consider any vehicle that can take you where you want to go, there are many opportunities to save money.

The average 2015 college graduate with student loan debt owes slightly north of $35,000, and 71% of new grads have student loans, according to a recent article in The Wall Street Journal.

Most often, students with big debt went to high-priced private schools or out-of-state public universities. Is brand-name prestige worth it?

It probably isn’t if you have to take on a lot of debt to get that fancy name on your diploma. Instead of being seduced by the school’s image, look at education like any other big purchase.

Buying a college education is a lot like buying a car. If only one model and color will make you happy, you have no bargaining power. If you are willing to consider any vehicle that can take you where you want to go, there are many opportunities to save money. You’ll get the best long-term value for your education dollar if you consider your options with an independent attitude and an open mind.

Here are some ways students can keep college costs down and minimize debt.

1. Make schools compete. Admissions officers are obsessed with college rankings. Schools will offer generous discounts to students they want to attract—and it’s got nothing to do with financial need. The vast majority of colleges compete on price to attract stronger students. Apply to colleges that will covet you and be prepared to take advantage of a good offer.

2. Skip early decision. Early decision programs, which require applicants to commit to a school before receiving competing offers, benefit college admissions offices, not students. Early decision may help you get into a school that you insist on attending. But you give up your right to comparison-shop for the best financial deal. Some college out there is going to want you—and when you get there, it will become your school, and you will probably love it.

3. Use advanced placement credits and graduate early, if possible. The less time you spend at a school, the less you pay—and the sooner you start working. Take advantage of advanced placement and similar college-level classes while in high school and consider which colleges will give you the most credit for those classes. Don’t pay for more college than you need.

4. Be prepared to transfer strategically. You get the same degree from Designer U. whether you spend 2 years or 4 on its campus. If money is tight, and if you can start someplace less expensive, give this option serious consideration. For instance, students who get excellent grades at a community college can readily transfer to a 4-year school. Also, if your first school proves to be stingy with AP credits, a transfer might be your best bet.

5. Combine graduate and undergraduate education. The sooner you get through school and start your working life, the better off you are likely to be. If you have a strong career direction that requires graduate school, look for a program that will get you all the education you need as quickly as possible.

6. Live at home and work while you study. This is the old-fashioned way to go to college. Study when and where you can, work when you must, and live where it’s most economical. Do you really want to borrow money to pay for a dorm meal plan, when Mom and Dad have a perfectly good kitchen and a fully stocked fridge?

You can also get a part-time job, on or off campus, to cover a lot of your costs while you are still in school. Unpaid summer internships have become a gimmick that disadvantages students, but you don’t have to follow the herd. Student summer jobs range from waiting tables and mowing lawns to more exotic options, such as parachuting into forest fires as a smokejumper. Summer jobs are not always easy to get, but they are out there.

If you don’t know what you want to do with your life, consider deferring college for a year or 2 while you get some work experience and save up money.

There is nothing wrong with expensive prestigious colleges, freshman dorms, or student loans. They all have their place, and if your family can comfortably afford these things, fine. But you should treat college as exactly what it is: one of the most expensive purchases you are likely ever to make. Sometimes the best decision is to forego the brand-name college and start life without a big debt.

Larry Elkin is president of Palisades Hudson Financial Group. He holds the CPA and Certified Financial Planner (CFP®) designations and is based in the firm’s Scarsdale, NY, office.

Palisades Hudson (www.palisadeshudson.com) is a fee-only financial planning firm and investment adviser based in Scarsdale, N.Y., with $1.3 billion under management. It offers investment management, estate planning, insurance consulting, retirement planning, cross-border planning, business valuation and appraisal, family-office and business management, tax preparation and executive financial planning. Branch offices are in Atlanta, Fort Lauderdale, Fla. and Portland, Oregon.

The firm’s recent book, Looking Ahead: Life, Family, Wealth and Business After 55, is a paperback and Kindle e-book available on Amazon at http://tinyurl.com/ocro2dx and at Barnes & Noble at http://tinyurl.com/m9ca3qk. Read Palisades Hudson’s daily column on personal finance, economics and other topics at http://palisadeshudson.com/current-commentary. Twitter: @palisadeshudson.