5 Ways to Dramatically Reduce the Cost of College

The sticker price of college keeps rising – fast.

As state budgets shrank between 2007 and 2012, some public schools hiked tuition 40 to 50 percent. In 2010, outstanding student loan debt surpassed credit card debt, and the gap continues to grow. Outstanding student loan balances totaled $1.19 trillion at the end of the first quarter of 2015, up $78 billion from a year earlier, according to the New York Federal Reserve Bank.

A recent College Board report says average tuition and fees for four-year public universities were $9,139 for in-state students during the 2014-15 school year; up $254 from 2013-14. And tuition and fees for private nonprofit schools were $31,231 this past school year, up $1,100 from the previous year.

These are the numbers you see in the headlines, and they’re scary. But don’t succumb to sticker shock. Because what the news stories leave out is that most people don’t pay sticker price, the College Board says.

The average net price at a public college is $3,030 a year; at a private nonprofit four-year college, the average family pays $12,360 annually.

College sticker prices these days can match the price tag on a Ferrari, says Money Talks News financial expert Stacy Johnson. But there’s a big difference between college and cars: While no dealer will cut the cost of a car in half based on need, there are resources available to students that can radically reduce the cost of college.

While it’s true that those from high-income and high-net-worth families may find it more difficult to find help, nearly every student willing to look can find some relief. Here are five ways to go about it:

1. Start with a net price calculator

The Department of Education website has a tool to help you estimate net prices for the specific schools you’re interested in. Put in some information and get the estimated net price: the estimated cost of attendance (tuition, fees, books and supplies, room and board and other related expenses) minus estimated grant and scholarship aid.

Every college has been required to offer this information since October 2011. The department’s College Affordability and Transparency Center can also lead you to information about how fast tuition has risen at the school, what majors are offered, and records for campus safety and graduation rates.

2. Apply for FAFSA

FAFSA stands for Free Application for Federal Student Aid. Students should fill it out in the spring before they graduate from high school and every year they’re enrolled – even if they don’t think they’ll qualify for aid.

This standardized form is crucial because it tells the school’s financial aid office you’re interested in whatever opportunities are available. Nearly every scholarship, work-study and other type of student aid available starts with the FAFSA form. And because some need-based aid is handed out automatically on a first-come, first-served basis, you want yours filed before everyone else’s. Fill it out online at www.fafsa.ed.gov. The site also has the deadlines for each state and the District of Columbia.

3. Hunt for scholarships

Filling out the FAFSA can make you eligible for tons of aid, and many university financial aid departments do a good job of pointing students toward opportunities. But don’t rely on them alone.

Find and apply to everything you can, because there’s more financial aid out there than you might think. The College Board’s scholarship search alone claims to check “scholarships, other financial aid and internships from more than 2,200 programs, totaling nearly $6 billion.”

And you don’t have to have great grades or test scores to find help. There are scholarships based on everything from your height to the community you live in to a passion for the science behind wine. Learn how to master the search in one of our most-shared stories ever, 5 Ways to Score Scholarship Money. Then, don’t stop looking – you may become eligible for more later, and new opportunities keep popping up all the time.

4. Fast-track your education

The traditional four-year route is expensive – especially at a private school. But there are ways to cut corners without cutting down on your education.

For instance, look into accelerated programs that push you harder but take three years instead of four. If you’re going for a higher degree, check out programs that combine bachelor’s and master’s tracks, or master’s and doctoral work.

Consider starting at a state community college and getting general education requirements out of the way at a cheaper price, then transferring to a university. Just make sure the credits will transfer with you: The College Board’s College Search page can help you find schools that have agreements to do so.

There are also ways to get credit without taking college classes. High school Advanced Placement (AP) courses can give you a head start, and while you have to pass a $91 exam for credit, that’s far cheaper and quicker than retaking the class in college. Some high schools also partner with nearby colleges to offer dual-enrollment programs – these meet high school and college requirements at the same time.

Then there are college-level examination program (CLEP) exams. If you can prove mastery of a subject on a $80 exam (some schools also add a fee to administer it), you get the credit while saving time and money. Of course, only take the test if you’re confident you understand the material – look at a sample of the test online before registering and brush up if you have to. You might even take a free course on iTunes to prep for CLEP.

You can cut the soaring cost of a college degree by forgoing at least part of a four-year campus experience and turning instead to MOOCs and other online learning opportunities.

Finally, there are colleges that don’t charge at all. According to U.S. News and World Report, 11 good colleges are tuition-free. Be warned: You may still end up spending quite a bit if you don’t live close to them – most charge for room and board but not tuition.

5. Take loans as a last resort

If you can’t cover the costs after aid, there’s another option: student loans. As the name implies, you have to pay these back, and starting life with a huge debt burden is no fun, so keep them to a minimum. One rule of thumb says take out no more than twice the annual salary an entry-level worker makes for your field of study.

Seek government-backed loans that subsidize the interest charged and offer more flexible repayment terms before turning to private loans. Learn more about the different types of loans at FinAid.org’s student loan page.

Then learn about options for loan deferments and forgiveness. Some professions, especially in public service, can get you off the hook – temporarily or permanently. For instance, Peace Corps volunteers may receive deferrals and loan forgiveness. Check out other loan-forgiveness programs here.

Bottom line? Don’t let the headlines about spiraling college costs convince you a higher education is unattainable. If you’re willing to do the legwork, the options are out there.

For more savings, check out our stories on avoiding nine big money mistakes in college and four tips for getting scholarships.

Jim Gold contributed to this article.

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