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7 Ways to Make College Cheaper and More Affordable

4/28/2016

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make college cheaper and more affordable
Ways to make college cheaper and more affordable are in high demand. College costs have outpaced inflation over the last few decades, meaning purchasing power has been eroded. Students are getting less value for more money and ideas/solutions to make college more affordable are needed now more than ever.

CollegeBoard has a handy chart that displays how much tuition has increased over the years. Tuition at a private nonprofit four-year college was only $10,088 (in 2015 dollars!) in 1975. Today, the same college is more than three times the cost, at $32,405.Because of the exorbitant price increases, the middle class is getting squeezed out of opportunities for a decent education.

READ MORE: Our National Student Debt Crisis: Student Loan Debt Now at $30K

Before you get the idea that I’m some bleeding heart liberal begging for some free handouts, I’m not. I’m neither a Democrat nor a Republican – I’m a businessman. But the reality is that there’s a tremendous incentive to turn students into profit centers. We have created a society that makes it seem as if a young adult is at a tremendous disadvantage without a college degree. Then, we allow the student to take on huge loans just to get an education, and we charge him/her 4-7% to do so.

Average student loan debt hovers around $30,000, which is a huge amount of money for an eighteen year-old to take on, especially without credit history or work history. These are the same people who had to raise their hand just to take a bathroom break a few months earlier!
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Don’t get me wrong, a college degree has the potential to increase your value in the marketplace, but you shouldn’t give the world just to have it. Making college as inexpensive as possible should be your prerogative. Here are a few ways to do it: 
1. Pick the right college.

 The very first thing you should consider is what college suits your needs. You should seriously consider the pros and cons of taking on student loan debt, which, if you take it, will be your biggest burden. Explore all your options, including state schools and online universities. In my opinion, it makes no sense taking on more debt just to cross a state line. If you will have to take on $120,000 more debt to go to an out-of-state school, just stay in your state.  

You shouldn’t necessarily go to an Ivy League college either. There is a well-known 1999 study by Stacy Dale and Alan Kreuger that showed that students who apply to Ivy League Colleges but ultimately don’t attend Ivies do just as well as students who ultimately attend Ivy League schools, income-wise. This makes sense, because most students who apply to Ivies tend to have certain characteristics that are beneficial regardless of where they end up.

When considering colleges, be sure to figure out the total cost of your education. This means you need to include transportation, entertainment, health care, etc. Not just tuition and room/board.

With all that being said, being miserable for four years isn’t worth it. I should know – I absolutely abhorred my college experience. I didn’t learn much, didn’t like the people/professors, and was constantly unhappy. I ended up avoiding nearly $100,000 of student loan debt, but I’m not sure it was worth it. There’s a lot I wish I knew, but didn’t.

Great resource: 1001 Things Every College Student Needs to Know
 
2. Don’t borrow unsubsidized loans if you don’t have to.

The main difference between subsidized and unsubsidized loans is that the federal government pays the interest on subsidized loans while you’re still in school. This means that if you take on unsubsidized loans, the interest starts accruing immediately.

This is another thing I wish I knew when I started school. I was responsible for several hundred dollars of interest before I even got a “real job”. I was prepaying on my loans here and there, but if I had known this, I would’ve paid down the unsubsidized loans. If you already have unsubsidized loans, try to pay them off as quickly as possible.

Great resource: How to Get Free Money for College 
 
3. Apply for scholarships.


I cannot stress this enough. If it weren’t for generous merit scholarships, I would’ve been loaded with way more debt. I worked my tail off senior year of high school to rack up as many scholarships as I could, and it paid off.

Not all scholarships are merit-based, so you don’t have to have the best grades. Some are need-based, talent-based, major-based, location-based, and so on. Take the time to go through scholarship websites, such as Scholarships.com and Fastweb.com to see which ones you qualify for.

If you’re already in college, that’s great news! It means you don’t have any competition, since most people never apply for scholarships once they step onto campus. Just make sure you’re applying to scholarships that award money to college students.

On the same note, take the time to make the financial aid office your new best friend. Most people forget about scholarships and grants once they’re in college – this is a mistake I made – so visit the financial aid office regularly. You can learn about scholarships, aid, and grants that are waiting to be given away. Plus, the people in the office might know a few donors!
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Great resource: Confessions of a Scholarship Winner
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Play sports? Shoot for an athletic scholarship.
​4. Ask for a student discount on everything.

Keep your student ID on you at all times, and make it a habit to inquire about student discounts. Tons of places from restaurants to movie theaters to book stores have student discounts – you just have to ask!

Great resource: 50+ Places Where Students Can Get a Sweet Student Discount
 
5. Get your textbook cost down.

The typical college student spends $1,200 on textbooks each year. They’re already absurdly expensive, so it’s imperative to know how to get inexpensive or free college textbooks.

I remember reading somewhere that something like 70% of all college students say that they will not purchase one or more required textbooks because the cost is too high. Textbooks stay so pricey partly because new editions are constantly released (more like, “Hey, let’s add two sentences and drive up our profits!”) and because publishers bundle textbooks with useless materials, such as study guides and CDs.

I’m confident that open educational resources, available via the internet, will eventually kill off traditional textbooks. Just like Wikipedia toppled the encyclopedia. Until then, companies like PackBack are now offering pay-as-you-go digital textbooks. Have you ever bought a textbook only to find out that you only use it twice in the semester? Yeah, not cool.
If you do buy your textbooks, be sure to keep them in good condition so you can sell them when you no longer need them, and get multiple bids from different sources. I sold most of my college textbooks, but I still have a few of my “favorites”. Ah, social psychology.

Great resource: Save Money on College Textbooks the Easy Way
 
6. Pay attention to your banking.

Be sure to choose a bank that offers perks for students. Get free checking, don’t pay many fees (if at all), and get all the special treatment they can afford. Because college students don’t typically have a lot of money, it’s important that they’re conscious of fees that can eat away at whatever funds they do have. I recommend looking for an account with:
  • No monthly maintenance fee
  • No minimum balance requirement
  • Free debit card
  • Free ATM usage at your bank
  • Free online banking
  • Free check writing
  • No money transfer fees
If you can hit at least five out of the seven above points, you’ll be golden.

Make sure the bank you choose has ATMs readily available on campus, both for withdrawals AND deposits. You want to avoid getting hit with fees for taking money out of a different bank’s machine. Plus, if you ever have any problems, you want the convenience of knowing your bank is just a quick walk or drive away.

Great resource: College Student Care Package
 
7. Prioritize protecting your investment.

I am a huge proponent of the idea that the biggest investment you’ll ever make is in yourself. Actually finishing college should be your number-one priority. 30% of college students drop out after their first year, and about half of all students don’t make it to graduation. Please don’t sacrifice your ultimate goal just so you can pinch pennies. If you feel that cutting costs will interfere with your ability to get a solid education, err on the side of caution.

Also, don’t sacrifice your sanity. If there are some things that truly make you happy, don’t give them up just to save a few bucks either. For example, if you enjoy going to the gym, don’t cut out your gym membership. Chances are that its actually benefiting you more than the small amount of money you’re giving in exchange.

My best personal example is paying extra to have a single-suite dorm in college. I don’t remember the exact dollar amount, but I ended up shelling out a few extra thousand dollars just to have a dorm room to myself, and boy, was it worth it. I could’ve been a miser and invested all that money into a low-cost index fund, but I probably would’ve a) gone crazy b) dropped out of school or c) failed out of school. Because I made finishing college my number-one priority, I didn’t step over dollars for pennies, and you shouldn’t either.

 At the same time, understand that clichés such as “be yourself” or “try new things” or “college is for experimenting” are total BS. I don’t want to sound like a pessimist, but most of the people you meet in college will simply fade away as the years go on. They’ll settle into their Just-Over-Broke and live a life of quiet desperation. You, on the other hand, should focus on being as awesome as you possibly can be, and it starts with making college more affordable.
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Great resource: Stuff Every College Student Should Know

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How Anyone Can Get Free (or Cheap) Flights by Travel Hacking

4/16/2016

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Airplane - you can get a free or cheap flight by travel hacking through credit cards
Learning how to travel cheap is one of the most rewarding learning experiences because you will be able to see the world and still have money to enjoy yourself.

I’ve always been interested in learning about and teaching budget travel techniques because I understand that flying around the world is cost-prohibitive for most people. I just did a quick search on flight prices: a round trip ticket from Los Angeles to Paris is about $2,000. A weekend flight from Philadelphia to Las Vegas is currently $250. Not bad, but we can do better.

Enter: travel hacking.

What is Travel Hacking?

Travel hacking is the art and science of getting free or deeply discounted flights. One of the best ways to do this is through credit card rewards programs. Because frequent flyer miles and points are the lifeblood of travel hacking, being able to earn and redeem miles is essential. Every major airline offers a credit card that usually comes with a few perks. Some offer bonus miles for new members, free checked bags, priority boarding, etc.

Using credit card sign-up bonuses and loyalty programs can help you significantly reduce your travel costs. While you might to pay some small fees when you redeem your points, your rewards will greatly outweigh any fees you may incur.
Before you get scared away, let me reassure you that this is completely legal. It’s not a scam, and although “hacking” makes people think otherwise, it’s completely legitimate. Businesses found out long ago that loyalty programs lead to big profits. Credit card companies won’t have any issue partnering with airlines and offering juicy rewards to get you to sign up for their juicy high-interest credit cards. There’s no need to sugarcoat things: credit card companies are hoping to turn you into an interest-paying profit center.

The best way to get started with travel hacking is through the huge sign-up bonuses that some credit cards offer. Several credit cards offer bonuses after you meet a certain requirement, usually a single purchase or a minimum spending threshold within a certain time frame. Don’t ever sign up for a credit card unless you’re being rewarded for it.

As an example, the Chase Sapphire Preferred card has one of the best sign-up bonuses on the market today. You can earn 50,000 bonus points once you spend $4,000 in purchases in the first three months from your account opening. This amount of points equals over $550 in travel.

A lot of people are scared to death of credit cards for all the wrong reasons. “Won’t that hurt your credit?” “Credit cards are evil!” “I won’t ever get a credit card – they’re a form of witchcraft that forces people to spend more money!” or whatever people are saying these days. The truth is that travel credit cards do come with higher interest rates and penalties, but the cards themselves are neither inherently good nor bad. They are only evil if you spend more money than you have, so if you are a responsible adult, you should have no problem. Besides, credit cards have unparalleled fraud protection, consumer protection and perks that debit cards and cash just can’t match.
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Here's an example of a sign-up bonus.
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“Doesn’t it hurt your credit?”


Every time you apply for more credit, your credit score should drop in the short-term. Don’t fret! Your credit score is largely determined by your payment history and credit utilization ratio. As long as you’re making your payments on time and not using more than 20-30% of your available credit limit, your credit score should improve over time.

Note: Please don’t miss a payment. A single late payment (yes, just one!) can shave 100 points from your credit score.

People worry that applying for a new credit card will hurt their credit, and this fear isn’t completely unfounded, but it’s a small worry. 15% of your credit score is based on the length of your credit history. The longer your credit cards are open, the higher your score will become. When you open a new card, it brings down your average, but don’t worry. Another 10% of your credit score is based on new credit, meaning every time you apply for a new card, there is a “hard pull” on your credit. If you have too many of these hard pulls, your score will get dinged.

Travel hacking should actually improve your credit score because you should be lowering your credit utilization ratio. Suppose you currently have $2,000 of available credit, and you’ve used $1,000. Your credit utilization ratio is 50%. If you open a credit card and get a credit limit of $2,000, you will have taken your ratio from 50% to 25%.

Annual Fees

One of the arguments I’ve heard against travel hacking are the annual fees that come with the credit cards. Most annual fees are between $50 and $100 per year. Fee-based cards tend to have better incentives, more rewards, and exclusive access to special services and offers. In my experience, if you travel often, you will save money than what you spend on fees.

However, if you really can’t stand a credit card’s annual fee, just ask the company to waive it. Most fee-based cards waive the first year’s fee anyway. After that, you can either cancel the card (which I don’t recommend) or move to a no-fee card (which I do recommend). You can call the credit card and ask them about cancelling the card or moving to one with no fee. When you tell them that the annual fee is too high, there’s a good chance they will waive the fee for another year.

The Southwest Rapid Rewards card, one of my favorites, didn’t waive their $99 annual fee for me, but it wasn’t a big deal. I got 50,000 bonus points from meeting their spending requirement, meaning I “purchased” a round-trip flight in the continental United States for $99 and still had points left over. Not bad!

The Reconsideration Line

The best travel hackers are able to go through several credit cards, keep track of their spending/timeframes, and rack up massive amounts of points. However, when you apply for multiple credit cards, chances are you will get declined or get an automatic “pending” message from one of them. When you get stuck in the “pending” limbo, reconsideration lines are your best friend.

When a credit card company’s computer algorithm can’t spit out a simple yes or no, a live human being (a credit analyst) will go over the application. If you call the reconsideration line, you’ll find that it is also staffed with live human beings, who can patiently and friendly review your application with you. They can let you know why it was flagged for review, and explain any issues. While they can’t always get you on the fast-track to acceptance, they can give you specific reasons why you might be declined, helping you in the future. Remember, credit card companies want you to get approved, so call and plead your case. It’s your best chance to humanize, rationalize, and justify your credit application.

Here are some credit card reconsideration line phone numbers: 

American Express: 877-399-3083
Bank of America: 866-458-8805  
Barclay’s Credit Card: 888-232-0780  
Capital One: 800-625-7866  
Citibank: 800-695-5171

I personally have used the reconsideration line with great success. I applied for a business credit card and got an automatic “pending”. I immediately called the credit card company, spoke with a live human being and got my credit card approved immediately.

The reconsideration line is a powerful tool, so here are a few tips to use it wisely:

Be nice! Have you ever been asked for money? What if, after you initially refused, the person asking started yelling at you? Would that make you want to lend the money? Yelling at the phone rep during the reconsideration call will get you absolutely nowhere.

Be prepared. Before you call, you should have a copy of your credit report and know your credit score. You should also know about all the credit cards you currently have open. You should also be prepared to emphasize the reason(s) why you want a new credit card. Some reasons include:
  • I want a card with no annual fee.
  • I want a card with no foreign exchange fees.
  • I moved and Airline X doesn’t fly to my new city.
  • I’ve heard great things about this card from family/friends and want to start a relationship.
  • I’m enticed by the rewards program and want to take advantage.
  • This card has great reviews online and I want to experience it for myself.

Leverage your existing relationship, if you have one. Remember how credit card companies want to make money? Well, they’re more likely to approve your application on the reconsideration call if the rep knows you are a loyal and profitable customer. If you have another card with the same company, speak up! Be sure to mention it if you’ve never missed a payment or been late.

One of the best reconsideration lines I’ve ever heard is to lead the call by letting the phone rep know that you’re happy with your existing relationship and that you want to know if you can get approved for a new card by reducing the high amount of credit on your existing credit cards. You want to frame your denial in a positive light, letting him/her know that you were denied because you reached the credit limit the company will assign you, not because of any late payments or credit mismanagement.

Earning Points

Once you use your card to get the sign-up bonus, you can continue to earn points by using your card. If you want to get extra savvy, you can have different credit cards for different purposes – one for groceries (I get 6% back on mine), one for miles, one for hotel rewards, and one for gas stations. This way you’re always getting the maximum amount of cash back on your purchases.

Shopping portals
One of my favorite ways to earn points quickly is by using the shopping portal through your credit card’s website. It’s one of the fastest ways to rack up the points because all you have to do is click a link and start shopping. Make sure you only spend money you were going to spend anyway. There’s no point in spending extra money to get something that is only worth 1-10 cents on the dollar.

These shopping portals are so valuable because they typically offer three, four, or even five times the points you’d get from a regular purchase. To find them, just log on to your credit card account. Then, look for the portal – somewhere on the page, you should see a link directing you to a place where you can earn extra rewards for shopping online. Once you click, a cookie is stored on your computer, allowing you to automatically receive bonus rewards upon checkout. If you can’t find it, just Google “YOUR CREDIT CARD COMPANY + shopping portal”.

Newsletters
Be sure to sign up for airline newsletters, which feature mileage deals and other promotions that can accelerate your point balance.

Stay Alert
Keep your favorite airline as a favorite or bookmark in your browser, and make it a habit to check for flights regularly. If you have a particular destination in mind and aren’t picky about the time or date, you might be able to score an amazing deal. Here’s what I mean: I just searched for a flight from Philadelphia to Las Vegas, and most of the return flights are around $300-600. Yet, there’s one flight that’s just $94. Man, I love “Wanna Get Away”.


Tips for Getting Cheap Flights

$94 is a lot cheaper than $607 or even $325, but this doesn’t always happen. However, there are a few ways you can make sure you’re getting the best deal on your next flight.

Buy early. In the travel game, booking late will cost you. Airline ticket prices tend to increase in the last two weeks before flying, so try to plan ahead. The more in advance you can start shopping for tickets, the better off you will be.

Be flexible. Like the example I gave above, being flexible is a virtue when you travel. Not many people want to take graveyard shift flights, so these are usually much cheaper. I also like to scan entire months for the cheapest flight. I don’t like rules of thumb like “always travel on a Tuesday” – I want to see the numbers! Also, try out different airports near you. Even though both might be going to the same place at the same time, one might be cheaper than the other.

Mix and match. Sometimes you can save additional money by mixing and matching. You can book one airline for outbound and a different one for your return flight. You can also check prices at different airports, since it might make sense to fly to one airport and depart from another.

Once you book your flight, don’t stop looking for deals! I know that sounds weird, but there’s a method to my madness. If fares go down after you’ve purchased your ticket, ask your airline for a refund. Refund policies vary from airline to airline, but it doesn’t hurt to ask. Most airlines don’t publicize the fact that they will give you the difference anyway. They want your money!
 
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