Save for College and Graduate with the Least Amount of Debt

By Katie Bryan, America Saves and Rosemary Thompson, Personal Investment Enterprise Program

If you are planning for college, whether it is this year or in a few years, there are some new resources available from applying for college, to finding financial aid, to choosing a school, attending and graduating. 

By July most undergraduate students will know what college they are going to, but many may still not know how they are going to pay for it. Today, the average debt students have upon graduation has skyrocketed to $35,200, according to a recent Fidelity survey, and the costs of attending college increase 6% each year. College is still a great investment for most students, especially with some planning ahead of time to help keep debt to a minimum. It’s still true that those with a bachelor’s degree will earn $1 Million more over their lifetime than those who only complete high school.  

The challenge is to graduate with as little debt as possible. Here are three ways to help keep student debt to a minimum:

        1.       Create a College Savings Plan

Just like savings for retirement, it’s good to save early and often. There are many ways out there to help you save, from a 529 account to Savings Bonds.

Tip to find extra money to save: If you can save an extra $300 a year ($25 a month at 5% interest, compounded monthly for 18 years) you will have an extra $8,766.43 to put towards tuition bills.

 

Haven’t created a college savings plan yet?  Pledge to save with America Saves and you can set your savings goal and create a plan to reach it. You can even sign up for text message tips and reminders to help you reach your goal of saving for college.

2.       Shop Around For Schools and Free Money

The Consumer Financial Protection Bureau created a tool to compare the costs of different colleges. Their tool will let you compare financial aid offers so you can see how all those numbers impact your payments down the road. Apply for as many scholarships as you can. $500 here and $1,000 there can go a long way to helping pay for college. Many students also stop looking for scholarships once they enter college, but keep applying each year. Need some inspiration? Check out the article "How I won $100,000+ in college scholarships"  by Ramit Sethi.

3.       Find Ways to Reduce Spending (or Earn Money) While in College

Live at Home – Living on campus can cost anywhere from $7,500 to $9,000 per year. Consider living at home during college (if you can) and you can save nearly $40,000. You can still get a full college experience by joining clubs and being active on campus.  

Get a Part-Time Job – Look for a job on campus or a paid internship to supplement your income and pay for expenses like food, books, and incidentals while in college. The more you can pay upfront the less your monthly loan payments will be when you graduate. Need more ways to save? We’ve got a list of 54 ways to save.

A list of additional resources for college may also be found at a previous blog post.

    You may also like to refer to these additional resources:

    College Saving Resources

Financial Industry Regulatory Authority (FINRA) is dedicated to investor protection and market integrity through effective and efficient regulation of the securities industry.

    Saving for College was established as a private company in 1999 with a mission to help individuals and professional advisors better understand how to meet the challenge of paying higher education costs.

    College Savings Plans Network works to improve 529 plans at the federal and state level and serves as a clearinghouse for information among existing programs. 

    CNN Money

    U.S. News College Saving Center

    Finding the Right College for You Tools and Resources from the U.S. Department of Education

     Download Student Loan Tip Sheet

 

America Saves, managed by the Consumer Federation of America (CFA), is a non-profit research‐based social marketing campaign that seeks to motivate, support, and encourage low- to moderate-income households to save money and build wealth. Learn more at americasaves.org

 

The Personal Investment Enterprise Program provides tools that empower low-income individuals and families to save and build assets to strengthen their economic stability.  To learn more
about the program visit bouldercountypie.org

The first step in applying to the program is to attend an orientation meeting with Nino Gallo at Community Action Programs at Boulder County.  Nino may be reached at 303-441-3998 or at [email protected]