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!
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:
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!
Great resource: Confessions of a Scholarship Winner
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
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.
Great resource: Stuff Every College Student Should Know