Paying for SchoolSo, you still have a couple of years until you go to college.  Maybe you’re working your way through your high school summer seasons, or it could be you’ve taken a couple of years off to work before hitting the books again.  Whatever the reason, you have plenty of time before you need to start worrying about how to pay to get a degree, right?  WRONG!  With college costs seemingly always on the rise, you need to be thinking about how to cover those costs now.  It isn’t fun and it isn’t easy, but figuring out how to pay for school sooner than later can pay off big time in the long run.  Graduating with little or no student loans can be a godsend and can present you with a fresh start in the working world, one without the shadow of debt hanging over your head.  It can also save you plenty of money in interest that may come with student loans.  But what is the best way to begin your path to pay for school?

How to start saving

Saving money is difficult when your goal seems to far away, but don’t let your objective’s seemingly distant future deter you.  College will soon be upon you and you don’t want to be caught unprepared for the financial obligations that will ensue.  Therefore, it is important to start as early as possible.  Working part-time during high school, as well as during your summer breaks can be a great way to get started.  Socking away those birthday and Christmas checks you get from grandparents, aunts, uncles, parents, and other family members is also a good idea, and the same goes for graduation gift money.    

A great tip for parents and grandparents is to purchase government savings bonds, which can be cashed in, possibly tax free, if used for the student’s education.  This is a great saving method for college since it is a guaranteed investment and is not immediately accessible as with cash.  Be aware however, that savings bonds will incur a penalty equal to the last three months of interest if cashed within five years of their purchase date, so make sure that there is enough time before the student heads off to school to avoid that penalty.  Visit treasurydirect.gov for more information regarding government savings bonds and how they may be used for educational purposes.    

Another great vehicle for saving is a savings account.  Yes, yes, it probably won’t be earning you huge dividends or great interest rates, but it keeps your money safe, it is protected by the FDIC, and best of all it won’t lose value.  Many lessons have been learned thought the financial crisis and recession that began in 2007.  One of those lessons was that of stock market volatility.  Many parents and students alike, lost much of their savings in uninsured, non-guaranteed educational funds.  It’s better to put $1000 in the bank and only have it grow to $1100 by the time you’re ready for school than to put it in the stock market and have it plummet to $400. 

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Continue the trend

If you’re already in school, maintain your saving techniques and keep your expenses under control.  Try to minimize your student loans.  Take only what you need.  Remember, typically the more you have the more you spend.  When those big loan checks come rolling in, that doesn’t mean that it’s splurge time.  Think of it as money in the bank that’s only to be spent on school related expenses.  Moreover, those expenses don’t include pizza and beer every night.  While those loan checks might make you feel as if you’ve hit the lottery, you will have to pay them back — with interest. 

It is also important to avoid the urge to use a credit card for educational expenses. On a personal note, I had a friend who racked up almost $50,000 in college costs on multiple credit cards during his six-year stint at school.  Let’s just say it’s not the best idea in the world, as he was still making huge payments on those cards years later and the interest rates were far higher than those of most student loans.

To supplement student loans, consider participating in work-study programs offered by your school or taking a part-time job.  Certain companies offer tuition reimbursement or educational assistance plans to help you with your education.  If possible, it may also a good idea to take classes over the summer, as these courses are often offered at a discounted rate when compared to during the regular school year and you may be able to trim an expensive semester or two off your college stint.    

Online degree cost advantages

Another great way to help pay for your college costs might be by utilizing an online degree program.  Either by participating in such a program or by using online courses to supplement your college education, you may avoid some of the costs associated with a typical college program.  With an online program, there may be little or no tuition costs, fewer books and educational related fees, and no room and board as with a college-style education.  It is also important to consider that since most of your courses will be taken in the privacy of your own home or area of your choosing, you probably won’t need a bus or parking pass to help you get to class, and you can avoid tempting coffee shops, fast food joints, and bars, which can be college budget busters.