5 Tips to Save for College Tuition

College can be expensive: according to the College Board, a private four-year college costs an average of $32,410 a year. Four years comes out to nearly $130,000!

While it’s hard to argue against the value of a college education, no one says you have pay the full freight without trying to find ways to save. Fortunately, there are some clever strategies you can use to make college tuition less expensive so you don’t graduate with student loans that rival some mortgages.

Public College is Far Cheaper

A private four-year college is by far the most expensive academic option for those going to school after high school. The best way to save on college tuition is to go to a public college or university instead. Private colleges are not, by definition, automatically better or worse than public institutions. Take a look at your area of study or interests and see where the best schools align because many of the best institutions are public.

Stay In-State

Public colleges charge you based on your state of residency, while private schools charge the same for in-state and out-of-state students. If you are a resident of the state you plan to attend college in, you pay far less for public school than if you are considered an out-of-state student. The average public four-year college will charge an out-of-state student $23,890. An in-state student will pay an average $9,410: a staggering difference of $57,920 over four years!

Establish a Domicile in the State

If you are attending a public school and are considered out-of-state, establishing residency in the state will allow you to pay the in-state tuition rate. However, you should confirm the rules of residency with your college since they will determine your rate. For example, at the University of Pittsburgh, a minor (which they define as under the age of 22 for the purposes of establishing domicile) is presumed to have the domicile of his or her parents. Unless you prove financial emancipation, it’s very hard to prove you’re a resident of Pennsylvania if your parents are not. The rules for your college may differ, so be sure to check them thoroughly.

Get Basic Credits at Community College

The most affordable colleges are community colleges. Many people have saved a tremendous amount of money by taking basic credits at a community college and then transferring to a more expensive, four-year institution later. There are also many two-year colleges that offer transfer programs with four-year colleges. Keep in mind: it’s very important that you make sure the credits you earn at a community college will transfer to the four-year college, so you can start there as a junior. There may be a grade requirement as well, so you may need to get an A in a class for the credits to transfer. You do not want to retake a class and pay for it twice!

Take advantage of scholarships

There are a lot of scholarships available to students and any “free money” you earn can be applied towards tuition. Try looking for obscure scholarships that fewer people are applying for so you face less competition. If you can’t find obscure scholarships that apply to you, consider looking at local scholarships. I won a $500 scholarship awarded only to students in my high school, an award many others didn’t even know existed!

Get Education Tax Benefits at Tax Time

When it comes time to do your taxes, make sure you take advantage of education tax credits and deductions you’re eligible for: like the American Opportunity Tax Credit worth up to $2,500 per student or the Lifetime Learning Credit worth up to $2,000 per tax return. (You can take only one!) Also, if you racked up student loans, you can deduct up to $2,500 in student loan interest.

Don’t worry about knowing about these tax benefits. TurboTax will ask you simple questions and give you the credits and deductions you deserve based on your answers.

Source: mint.intuit.com