Paying for College Without Going Broke, 2017 Edition - Princeton Review, Kalman Chany (2016)
Part II. How to Take Control of the Process
Chapter 5. What the Student Can Do
What the Student Can Do
Until now, most of our discussion has concerned what the parent can do to pay for college. Income and asset strategies, tax strategies, home equity loans—these are subjects that have little relevance for high school students. After all, in many cases, they have no income or assets, pay no taxes, and almost certainly don’t own their own home. Is there anything the student can do to help pay for college?
The most obvious idea would seem to be for the student to get a job. However, under “Student Income and Assets” in Chapter Three we explained that earning more than a certain dollar amount will decrease a student’s aid faster than the earnings can be deposited in the student’s bank account. After $7,000, every dollar a college freshman earns and saves can decrease his aid eligibility by 70 cents in the federal formula. Of course, if his family is not eligible for aid, the student should be out there earning as much as possible; but if his family stands a chance of qualifying for aid, the student’s time would be better spent (at least under the current ridiculous law) by making the most of his educational opportunities.
There are, however, some very tangible ways a student can help pay for college. The first of these may make it sound like we’ve been paid off by high school teachers, but here goes anyway:
Study Like Crazy
It’s the gospel truth. Good grades make a student desirable to the colleges. Yes, this will help you get in, but in these budget-tight times, good grades also translate directly into dollars and cents. As we said in Chapter Two, every tenth of a point a student raises her high school GPA can save her thousands of dollars in student loans she won’t have to pay back later.
Even at the prestigious Ivy League schools, where students are supposedly awarded aid based only on their “need,” applicants with high academic achievement do get preferential packaging—award packages with a higher percentage of grants and a lower percentage of loans.
If a student’s dream is to attend an expensive private college, it isn’t going too far to expect the student to contribute to help make that dream a reality. Parents are about to invest a sizable portion of all the money they have ever been able to save. It seems only fair that the student should be prepared to invest in his own future as well. And the single most productive way a student can invest in his future is by doing as well as possible during high school.
There are some colleges out there who state up front, “If you have a GPA of more than 3.5 and SATs of 1900 or above, we will offer you a full scholarship.” There are other schools (more and more in recent years) that give out large merit-based grants, irrespective of need. These grants are not necessarily just for geniuses. We know of several colleges that award merit-based grants for students with B averages.
Take an SAT Review Course
Nothing can change a student’s fortune faster than a big increase on the SAT. Look at it this way: it takes four years to accumulate your grades from high school. It takes six weeks to take a prep course. A study by FAIRTEST, published in The New York Times, showed that students who took these prep courses had an average improvement of over 100 points.
Every ten points a student can raise his score on the SAT can save his family thousands of dollars by increasing his desirability in the eyes of the FAOs, and hence, increasing the size of the aid packages they offer him. This is too important to leave to chance.
There are many companies that offer test preparation, some affordable and some quite expensive. We, of course, are partial to The Princeton Review course. If there are no preparation courses offered in your area, we suggest you at least buy a book such as The Princeton Review’s 11 Practice Tests for the SAT and PSAT. Books such as these will provide the student with actual SAT practice sections. If money is a consideration, don’t lose heart: The books are available at libraries, and test prep companies often offer financial aid.
Take AP Courses
Many high schools offer advanced placement (AP) courses. By passing an advanced placement test at the end of the year, a student can earn college credits without paying college tuition. Not all schools accept AP credits, but many do, again enabling a student to save his family literally thousands of dollars. Some students are able to skip the entire freshman year in this way, thus cutting the entire cost of their college education by one quarter. Consult with the colleges you are interested in to see if they accept AP credits, and with your high school to see which AP courses are offered, and how to sign up.
Saving Money by Earning Credits on the CLEP Exams
The College Board has developed exams that—like AP tests—allow students who score high enough to earn college credits. These are offered under the College-Level Examination Program, more commonly known by its acronym: CLEP. There are currently 33 different CLEP exams, with at least one of them currently accepted by 2900 colleges and universities. You earn the same number of credits you would earn by taking a course—simply by taking a test. This could potentially save you thousands of dollars in tuition.
Needless to say, this is a great option to explore, but you need to do your homework first. Some colleges don’t award credits for CLEP exams at all, while others have fine print. It is up to the individual college to determine which exams can be taken, the minimum score you need in order to get credit, and the total number of credits the school is willing to give students for CLEP exams. Bear in mind that the minimum score needed on one test might be different than the minimum score on another test. And some colleges might not give you credit, but will use the test results to allow you to place out of entry-level courses or to fulfill core distribution requirements. Each test costs $80, and there are prep books and interactive tutoring websites available. For more information, visit clep.collegeboard.org
Condense Your College Education
You have to be a little crazy to try this, but for motivated students it is sometimes possible to complete a four-year education in three years. The family may not realize big savings on the tuition itself (since some schools charge by the credit) but there will be savings on room and board, and the student will be able to get out into the workforce that much sooner.
A more reasonable goal might be to reduce time in college by half a year. By attending summer school (which is often less expensive than the regular terms) a student can reduce her time on campus by one full semester.
Even at half a year, this strategy may take its toll on the student. Academics are only one part of the college experience, and by accelerating the process, a student may lose out on some of the opportunities and friendships that make the college years meaningful.
Many schools allow students to defer admission for a year. If the family is financially strapped, a student could use this year to earn money. You should always remember that at least under current law, student earnings above a certain dollar amount will reduce aid eligibility—thus for many students, this strategy could backfire. However, if the college the student really wishes to attend decides the family is not eligible for aid, and the family cannot shoulder the entire cost of college, this might be the only way the student could make up the difference. Be extremely careful in making a decision like this. If there is no reasonable plan for how you can meet the entire four years’ worth of college bills, it may not make sense to begin the first year.
Go to School Part-Time
Some schools allow students to attend college part-time so that they can earn money while they are in school. Points to be aware of:
✵ Student loans become due as early as six months after the student stops taking classes or goes below half-time status. If the student takes too much time off between classes, she may have to start paying off the loans, even though she’s still in school.
✵ The financial aid available for part-time students is much reduced. Particularly if the student is attending less than half-time, there will be little chance of substantial aid.
✵ Any money the student earns is going to be assessed by the colleges at a very high rate, thus reducing aid eligibility. You should consider carefully whether a job will actually help pay for college. It will depend on whether your family was judged eligible for aid, and what kind of package you have been offered. If you were not eligible, or if the aid package left you with a substantial piece of “unmet need,” then part-time study may make sense. However, before you take that course of action, ask the FAO what would happen if the student earned, say, $15,000 after taxes this year. Would the student’s aid package remain the same, or would the extra income simply reduce the aid package by $4,000 or more?
Transfer in Later: Option 1
If a family is on a very tight budget, a good way to finance a four-year college education is to start with a two-year college education. Two-year public community colleges or junior colleges, where the average in-state tuition for 2015-2016 according to the College Board was just $3,435, represent an outstanding way to save money. A student with a good academic record at a community college (perhaps earned while still living at home) can then transfer to a slightly more expensive state college for two more years to earn a BA. The total cost would be only a fraction of the cost of a private college, and still thousands of dollars less than that of a four-year program at the state college.
Transfer in Later: Option 2
If a student really has her heart set on a particular private college but the family cannot afford the costs of four years’ tuition, there is another option: The student could go to a public college for the first two years and then transfer into the private school. The student will get the private college degree at a much more affordable price. Obviously, the student would have to get accepted by the private school as a transfer student, and this can be quite difficult. Outstanding grades are a given. We will go into this strategy in more detail in Chapter Seven, “Innovative Payment Options.”
Transfer in Later: Option 3 Inexpensive College, Pricy Graduate School
Extending the previous strategy, a student could attend an in-state public university during all four of the undergraduate years, and then go to a top-of-the-line private graduate school. The undergraduate savings would be huge, but again, whether the student attends a private or a public undergraduate college, a compelling academic record is always very important to ensure acceptance.
The Senior Year
The family will complete its last standardized need analysis form in the spring of the student’s junior year of college. Once that form has been filed, there are no longer any financial aid considerations to worry about. During the summer between junior and senior year, students who want to help out with the last year’s tuition can earn unlimited amounts of money without hurting their eligibility for financial aid.
Of course, if the student goes straight on to graduate school, then the senior year of college becomes the first base income year for graduate school, and the process begins again.