In about 22 months I’ll begin my quest to slay the college dragon. My problem is that I’ll have another one to start slaying just 12 months after that. Two in college a year apart. Ouch. It’s gonna be tough but here are some of my plans to pay for college without draining my bank account.

Paying for college

I don’t know if you’ve checked out what a college degree costs these days but it isn’t cheap. Depending on who you ask (and which site you Google), in state college costs average $15,000 per year for tuition, room and board with out of state costs roughly double that amount. I have managed to squirrel away some cash, but since my two oldest children want to go to an out of state school, I have some strategizing to do.

1. Search for scholarships

There are four ways to find scholarships that I know of:

• Online sites such as Scholarship Zone or Fastweb where you enter your information and you’re matched to money that’s available
• Your high school’s guidance counselor
• The college you’re planning to attend
• Networking through friends, co-workers, and community service organizations (Rotary, Kiwanis, etc), or other students

The key to getting a scholarship seems to be – simply ASK … and ask early.

2. Go after grants

The beauty of grants lies in their “gift” nature. Unlike loans, grants don’t have to be repaid. There is the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG) for those capable of demonstrating the financial need for them. I should also consider whether these two new grants might be appropriate: the Academic Competitiveness Grant, which offers up to $1,300 for students who have completed a rigorous high school program; and the National Science and Mathematics Access to Retain Talent, or SMART, grant, which offers up to $4,000 for undergraduates majoring in physical, life or computer sciences, math, technology, engineering or a foreign language “determined critical to national security.”

3. Set up kids with a work study program

When I went to college (back in the dark ages), work study was one of the ways I paid for my tuition and books. Jobs available for work/study can range from assisting in the college’s administration office to working at the recreation center. I worked 10 to 12 hours per week on the Special Collections floor of the University’s library. My job was encapsulating rare maps and I really enjoyed it. We also temporarily stored the hounds tooth sofa and desk from Paul “Bear” Bryant’s office (he had recently passed away). The sofa sat in a corner for years with piles of old newspapers on it. Today it’s roped off and untouchable!

4. Consider a “gap year”

No, I’m not talking about the current craze for the Gap Year where kids head off to Europe on their parent’s dime in order to “find themselves.” No, I’m talking about taking a year off to establish residency in another state while working and building up a savings account to help pay for college. Remember that residents can save half or more versus an out of state student. It takes a lot of discipline to save the money, but I genuinely wish I had taken this approach rather than jumping into college just because it was my next step.

5. Select the right school

We all have our personal preferences, but if you can get a sheepskin from an accredited school that costs half as much, it makes sense to at least explore it, don’t you think? Sure, private Ivy League schools have an almost irresistible appeal, but other options exist that cost much less. If you’re set on an elite private school, remember that many of them offer “tuition discounts” (i.e., financial aid). But generally, you’ll save a big pile of money by choosing a public university in your own state.

6. File for financial aid SOON

Most parents and potential college students already know about the need to file the Free Application for Federal Student Aid, or FAFSA, in order to receive federal grants and other forms of aid. Families should complete this form as soon after Jan. 1 as possible for the upcoming academic year. One thing to consider: 529 savings plans, Coverdell education savings accounts, and prepaid college tuition plans now are considered parents’ assets, not students’ assets. If you accidentally list such assets as your child’s instead of your own, your child’s chances of receiving aid could be greatly diminished.

7. College courses in high school

My oldest daughter will finish her high school math requirements as an eleventh grader and will be eligible to take her first year college level mathematics class during one of her class periods next year. The cost is only $60 per credit hour for a total of $180 and the local college is an accredited university. That’s a no brainer since many colleges charge $300+ per credit hour. We’re definitely taking that route.

8. CLEP – get credit for what you already know

CLEP is a program from the College Board (the same people who put out the SAT test) which allows incoming college students to get credit in 33 different areas by paying $77 to take an exam. CLEP can also allow students to skip general introductory courses and move on to more advanced classes and save money by either graduating on time or actually graduating early. We will also be taking this route.

9. Junior college

A local junior college may be a cheaper way to knock out a year or two before delving into a university setting. If you consider this route, make certain the junior college courses are verifiably transferable to the four year institution your child hopes to attend. Junior college classes are usually less expensive, though not always. They may allow your student to live at home a few more years and save some cash to go to their selected four year institution.

10. Online

Online education has taken gargantuan leaps ahead since the old correspondence course days. In fact, many accredited four year institutions offer online courses. They aren’t easier, in fact, they’re much harder in many ways. An online student has to master time management and self discipline to succeed. Having been both a traditional student and an online student, my experience was much more difficult as an online student.

• Strayer University
• Devry University
• Kaplan University

Borrow as a last resort

If student loans are unavoidable, opt for subsidized loans when you can. The federal government pays the interest on such loans while you’re in school and during the grace period before repayment begins. For details, turn to the U.S. Department of Education’s Federal Student Aid Information Center, Nellie Mae and SallieMae. You also could consider applying for a loan through Lending Club, a peer to peer lending site.

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All across the land parents are in shock. They’ve just opened the first of many bills for college and the numbers aren’t pretty. Combined with meal plans, housing costs, spending money, books, fees, and tuition college expenses total more than they ever imagined. Even considering all the pre-college expenses they paid, they’re still in shock.

Even though your new student has entered college, there are still some ways to defray some of the costs by applying for financial aid, loans, and even scholarships! Even if your student opted to go for an online degree, financial aid options are still available (getting a degree online is a great way to reduced college costs).

“Sending a kid to college is like buying a new car every year … and never getting to drive it.”  — Anonymous parent

Financial Aid

Most schools award financial aid in the spring, but if your college bound student has already entered school and you’ve experienced some financial setbacks, you might be able to convince the student financial aid office to reconsider your situation. Most aid is awarded based on last year’s tax returns, but schools can consider your current year’s income and assets.

The key to getting the help you need is documentation, documentation, documentation. Have copies of any documents to prove you’ve had a financial setback – medical bills, unemployment paperwork, or paycheck stubs.

Scholarships

Scholarships are awarded in the spring, but many go unclaimed. Take some time and research available scholarships to see which ones your student may qualify for. Take the next step and ask if money is available year round for those in need. Asking is free.

Parent Loan for Undergraduate Students

Also known as a PLUS Loan, this loan is made to the parents. Its repayment schedule can be delayed until the student graduates and currently has a fixed rate of 8.5 percent.

Typically, PLUS Loans do not require a very high credit score, but a bankruptcy or a home foreclosure could derail your application as could defaulted loans or those more than 90 days past due.

BUT, if you are rejected for a PLUS Loan, you are automatically eligible for a higher limit on the most popular student loan, the Stafford Loan.

Stafford Loans or Federal Student Loans

This is the type of student loan I received and the one that helped me finish my degree and later, to help me get an MBA. It’s the most common student loan most students receive.

Stafford loans are available to all full-time students regardless of income or need (certain limits do apply). Right now a Stafford loan’s fixed rate is 6.8 percent and, depending on your classification in college, you can annually borrow $5,500 (freshmen), $6,500 (sophomores), or $7,500 (juniors and seniors).

Private Loans

Private educational loans from financial institutions haven’t completely dried up, but the credit crunch has caused them to severely shrivel. I’ve heard that some credit unions are beginning to loosen the purse strings and are offering very good rates. Try visiting www.studentchoice.org and search for participating credit unions.

Loans MUST be repaid!

Most of you are thinking, “DUH!” but there are more and more people out there that are bemoaning the fact that they have to repay student loans. Failure to do so will damage your credit score and most student loans aren’t eligible to be included in bankruptcy. So plan now to make your payments!

[tags]financial aid, college tuition, tuition, college expenses, scholarships, student loan, PLUS loan[/tags]

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Sallie Mae and Gallup teamed up to determine how families really pay for college and the results were surprising – at least to me. Interviewing 1,404 respondents by telephone from May 1, 2008 through June 1, 2008, the study found that the majority of student’s expenses are absorbed by their parents.

Average percentage of total cost of attendance paid for each source

• 36 percent of expenses were paid by parental savings or income
• 25 percent of expenses were paid by grants or scholarships
• 14 percent of expenses were paid by student borrowing
• 10 percent of expenses were paid out of student savings or income
• 9 percent of expenses were paid by parental borrowing
• 6 percent of expenses were paid by friends or relatives

Remember, this is how the average family paid the total bill. Those number change drastically depending on parental income. As parental income decreased, the amount of grants and scholarships rose. If you’re like the average American, you’ll use a similar combination of these options.

That means that 71 percent of college expenses were paid without borrowing and that’s great, but 5 percent of students paid their college expenses with a credit card (ugh). Buried down in the report was an interesting little nugget: Families who BORROWED, spent more money than those who didn’t, exceeding the non-borrowers by 33 percent!

This finding would seem to support the oft cited axiom that borrowed money is more easily spent than non-borrowed money.

What are your plans to pay for college? Will you borrow? Is it worth it? Have you made plans to finish your education?

The full PDF version of the report is available.

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Getting a student ready to go to college will surprise you financially. While most families focus on saving for tuition, room and board, textbooks, and other actual college related expenses, the pre-college time period also involves expenses that can quickly add up to thousands of dollars and there aren’t scholarships to pay these costs! What costs?

Standardized test fees. Nearly all colleges require incoming freshmen to take at least one standardized test, such as the SAT, ACT, or various AP exams. Costing $15 to 85 to take each test (retakes cost the full amount) the costs can add up quickly. Some students will take a test four times or more in the hopes of getting a better score. Students with demonstrated financial need can qualify for fee waivers or reductions. For more on SAT, and AP fees, see www.collegeboard.com. For more on ACT fees, see www.actstudent.org.

Test prep courses and materials. Back when I took the ACT, I woke up one Saturday and went to the testing site and took it. No prep, no study, no tutors. However, most students today prepare to take standardized tests by using some form of test prep, which ranges from books ($20 to 50 each) to private tutoring ($50 to 100 per hour and up) to taking an entire test prep course ($500 to 3,000 and up).

Application fees. Virtually all colleges charge a nonrefundable application fee of $50–250. Even the 150 schools that use the Common Application (a standardized application form) still require that you pay an application fee for each separate school applied to. Not all schools charge application fees, and again, some students with demonstrated financial need can qualify for fee waivers. For a list of schools that accept fee waivers, or that don’t charge fees, search for “fee waivers” on www.collegeboard.com.

Campus visits. Ah, the college visit. Students generally visit each college or university to which they plan to apply in order to “get a feel” for the school. These visits, which usually take place during the junior or senior year of high school, might include hotel, food, and gas or airfare expenses (though the actual campus tours that colleges conduct usually are free). Don’t forget the obligatory trip to the campus bookstore to buy a t-shirt. Expect to spend at least a few hundred dollars per campus visit.

Tuition deposits. I never had to pay a tuition deposit but they’re becoming more common. You can expect to pay a fee of $100 to 2,000 or more to guarantee your student’s spot at any college which which accepts him or her. In the best-case scenario, the student will be admitted to at least one school and will choose one to attend and, you’ll pay just one deposit with the school crediting the amount you pay against tuition once the student enrolls. In the worst-case scenario, your student will be accepted to some schools but remain on the waiting list at others. In that case, you may end up having to pay several nonrefundable tuition deposits at once, only one of which will be credited against your student’s actual tuition.

Moving. Most parents manage to move their kids to college by packing up the car and driving to the school. In this case, expect to spend money on gas, food, and maybe an overnight stay. If air travel is involved, though, you’ll have to pay for plane tickets and shipping costs, which may add several thousand dollars, depending on the distance, number of travelers, etc.

Personal expenses. This category includes all the expenses you’ll face to get your child set up at college such as furniture, clothes, a computer, bed linens, and more. Though you’ll likely be able to bring some of these items from home, you should still expect to spend at least another $500 to 1,000 on personal expenses before college starts.

The final tally will vary considerably based on the number of schools to which your child applies, the distance from your home to the school, what items he or she can take from home, and so on. Altogether, though, you can expect to spend roughly $1,000 to 5,000 on pre-college costs alone. And that’s before he or she has even taken one class!

Shocking isn’t it?

Note: Only Coverdell Education Savings Accounts—not 529 plans—can be used to pay for pre-college costs.

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The way I define assets has changed. I formerly thought of an asset as something that held value – a vehicle, a home, a piece of equipment, furniture, or a piece of real estate. My definition of an asset has changed to “anything that produces a stream of income, particularly if it produces income that outpaces the rate of inflation.” Under that definition, very few items cut the mustard. A paying job is the one thing that always qualifies as an asset, especially in a recessionary environment. But a “job” isn’t tangible – YOU are the asset, and increasing your value at work is the surest way to secure your future.

Learning strategies, techniques, and tactics to increase your value in your boss’s eyes is something that we all should be undertaking. In all reality, losing your job at this point would be disastrous for the average person, since few employers are interested in growing their staff or increasing their payroll. Increasing your value should be high on the priority list!

How to make yourself more valuable

1. Learn a new language. There’s a very good chance your company is international or is affected by international events, or deals in some way with international customers, suppliers or vendors. If you’re the only person at your company fluent in Mandarin Chinese and you frequently purchase goods from China, your value just skyrocketed. If your company frequently sells to Latinos, learning to speak Spanish, when highlighted against the backdrop of your experience with the company, will make you stand out from your peers.

2. Further your education. Advancing your career by getting more education is how countless thousands have already made themselves more valuable at work. The fact is, by brushing up on skills valued by your employer, you automatically increase your own value. There are endless possibilities to further your education with schools such as Colorado Tech that all offer online programs. You can advance your career while still working WITHIN your career.

3. Enhance your critical skills. Could there be a more important skill than time management? When you learn to plan your weeks and organize your days based on your highest priorities, you’ll discover the peace of mind that comes from having a clear goal and a path to reach that goal. You’ll enjoy the well-being that results from a life in order. Your personal organization skills are obvious to most people in your company and using tools such as those offered by Franklin Covey, will help you be more organized and look it.

4. Broaden your contacts. Make sure you’re a recognized presence within your company. If you’re a nobody to everybody, then no one will miss you and you’re more likely to be on the next list of lay offs. Set up networking contacts in as many levels of your company as possible, from the entry level newbie to the administrative folks all the way up to the executives. When the boss is forced to make a decision about you or your position, your colleagues will have you in mind not only as someone that’s pleasant to have around, but will also be more likely to speak up about your positive contributions within the organization.

5. Network outside of your company. Your boss probably knows people in your industry outside your company, so should you. Network with other people inside your industry as well as with those in other industries. Being well connected means you call on others to help you bring more ideas and innovation to your own firm. After all, those are the only things that truly separate one firm from another. Join the Lion’s Club, Rotary, or some other local civic organization and get involved. Ask to speak to the group about your company and it’s accomplishments. Become the “face” of your company and your value will increase rapidly.

6. Cultivate your work ethic. Designate at least one day per week to come in earlier than everyone else and one night per week to work later than everyone else. Write it in your calendar and stick to it, but make certain you’re using self discipline to get something accomplished during that time (a smokin’ game of solitaire doesn’t count). If you can manage to impress your boss with your proactive attitude, you’ll be much less likely to figure in the next round of pink slips. A good attitude and a strong work ethic do more than just preserve your role within whatever capacity you’re currently working – if your position is no longer necessary, you might be asked to stay on in a different capacity simply because you’ve proven to be an asset who produces desired results.

7. Make sure your boss is never blind-sided. Nothing can ruin your day like getting hit with a massive problem from out of the blue. If you have the slightest inkling about something negative on the horizon, make sure your boss knows about it. Never allow him or her to get waylaid, especially by his or her boss. Office politics is all about saving face and if you can help your boss avoid embarrassment or negative surprises, you’re a much more valuable employee.

8. Be the employee you would like to hire. Doesn’t this one sum it all up? Put yourself in your boss’s shoes and ask what qualities you would like in an employee. Then do your best to emulate those qualities in your work life.

Today, a job is a lifeline and it’s vitally important to move between careers on your own terms rather than have those terms forced upon you because you weren’t deemed as valuable as the person in the next cubicle. By taking steps to increase your value at work, you’ll be better able to keep your career on track and you’ll probably enjoy it more as well.

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