Containing the Cost of College

Last week, we wrote about how you can now use some of the assets in a 529 plan to help paydown some of the student loan debt that a child may have accumulated. This week, we offer a couple of other ideas for how you and your child can try to contain the overall cost of college.

One growing trend we have witnessed over this past decade to help reduce college costs is testing out of college level courses. How does it work? Something known as challenge testing is an option to test out of entry-level college courses if you already know the material. 

Here are a couple of options: 

• Enrolling in Advanced Placement programs while you are still in high school. This allows you to “test out” of entry-level college classes. You could complete your first year of college this way, saving thousands of dollars. 
• Many well-known colleges like MIT, Carnegie Mellon, and Stanford offer free online courses. Upon completion, you may consider taking what is called The College-Level Examination Program (CLEP). Students from all ages and backgrounds can use CLEP to test out of intro-level classes to earn college credits. This can be a cost-effective way to knock out courses in life and physical sciences, history, humanities, math and English, as well as foreign languages. 

Before pursuing these options, you want to make sure you check with your intended college so as to verify that institution’s transferability criteria.

Additionally, here some other useful options on how reduce overall costs: 

• Apply for aid.
• Enroll online.
• Choose an in-state school.
• Apply for grants.
• Consider working while attending school.
• Negotiate aid package with the college.
• Take maximum credits per semester.
• Enroll in a work-study program.
• Cook at home. 
• Live at home.
• Become a Resident Advisor (RA). 

It is never too soon to start planning for your child’s future financial needs. We appreciate how intimidating it can be, especially in a culture that is constantly competing for every dollar and cent we earn. Like the popular proverb says, “The best time to plant a tree was 20 years ago. The second-best time is now.”

This information is intended to be educational.   Hicks & Associates Wealth Management does not provide tax or legal advice. You should consult with a qualified tax, legal or financial professional before making any decisions.

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