Reducing Your Online College Costs
College is a substantial investment. It is an investment of your time and your resources. By all accounts, it is well worth the investment to invest in yourself. The National Postsecondary Student Aid Study estimates the value added earnings from a college degree is roughly 15 times the magnitude of the present value of debt. Additionally, an individual earning a bachelor’s degree on average earns more than $1 million dollars more than their counterparts with only a high school diploma. Students earning an associate’s degree earn a staggering $360,000 more on average than those with a high school diploma only according to a recent study by The White House. Put another way, the median full-time, full-year worker with a bachelor’s degree over 25 years of age earned 70% more than a worker with a high school diploma.
The Bureau of Labor Statistics reveals a very high correlation between education and employment stability. As you can see in the BLS chart, the more education not only results in a substantive increase in income but also a reduction in the unemployment rate.
Further, research performed by Georgetown University reveals that nearly 99% of all new jobs created in the US since 2010 went to individuals with a college degree. Is college a solid investment in your future? As you can see from the data, there is a preponderance of evidence affirming the value of earning a college degree to help secure your future. In this article, we will discuss ways to make your online college experience more cost effective thus making your investment in your education even more attractive.
Finding the Right College
The single biggest driver of your online college budget will likely be tuition. Knowing this will be such an impactful decision, make sure to do your research. Instead of relying on a magazine or recommendation for a friend, shop around. In order to find the best program for you, start by developing a list of priorities and matching up your list with a short list of prospective colleges. Online portals like MatchCollege covers nearly 7,000 colleges and universities in the US with information about the school, programs, degrees, virtual tours, and contact information to quickly assemble information about a variety of schools. For an in-depth look at finding the right college or university for you, read our ebook on the college admission process here.
Grants are an immensely beneficial means for students to help reduce the overall cost of a college education. A grant, unlike a loan, does not need to be repaid. A college grant is essentially a type of financial aid that is offered by federal agencies, state agencies, corporations, and/or non-profit organizations.
According to The White House’s recent broad-based study on higher education, Pell Grants are the primary form of financial aid for many college students. Did you know Pell Grants reduce the cost of tuition by $3,700 for over 8 million students per year? Funding for Pell Grants increased $12 billion dollars which equates to a 67% increase from 2008 to 2014 with the maximum award increasing by $1,000. Be sure to ask your counselor or the school’s financial aid department about the all your grant options along with the Pell for Accelerated Completion program and the On-Track Pell Bonus to see if you qualify.
Like grants, scholarships are a great financial tool you may be able to leverage to help pay for your online college program that do not need to be repaid. With over thirty thousand different scholarships available to students, you will need to do your research and apply for the best scholarships available. Some scholarships are state-based, regionally restricted, based on your ethnicity, academically focused, based on your athleticism, and school-based. Do your research and determine which scholarships are best for you after determining the best online college program.
America Opportunity Tax Credit (AOTC)
The AOTC is a tax credit that was created at the federal government level for low-income and middle-income families to help mitigate the cost of higher education. The AOTC provides for a maximum tax credit up to $10,000 over four years’ time for qualifying families and has been expanded five-fold in the past 4 years.
Do you know what FAFSA stands for? A prospective college student should know it stands for the Free Application for Federal Student Aid. The FAFSA form has recently been streamlined and can result in a substantial amount of student financial aid to help you pay for college. If you are unclear how to complete the form or have questions, please make sure to reach out the FAFSA team or your tax professional. The FAFSA application process is used by millions of students and should be a vital tool to best prepare you for college. While obtaining a low cost federal student loan is not the first option to reduce the cost of college, it can be a viable means to bridge the gap between your resources and those at your dispose.
A CLEP test is also known as a College Level Examination Program which is designed to assess a student’s knowledge in a given subject area. If your life experience or work experience has prepared you with a base level of knowledge in a specific area of study, you can register for a campus-based CLEP exam. The exams are available in a wide range of subjects ranging from business to math to history and English, to name a few. If you pass the exam, you can effectively bypass the respective class(es) saving you the time and the cost associated with taking the course.
Test Out of a Class and Challenge Exams
Like a CLEP exam, some colleges allow students to test out of an entire course based on the successful completion of an exam or assessment. If you are a subject matter expert in a specific area of study, make sure to ask the college or university if you are able to test out of a class or set of classes. Similarly, a challenge exam may be another route to sufficiently demonstrate to the school an acceptable proficiency in an area of study to help you receive credit for a class that would otherwise be redundant for you. Each school has differing rules, procedures, and fees associated with a challenge exam so ask what options exist for you during the registration process.
National Exams for College Credit
The American Council on Education provides a national platform for students to earn college credits for successfully completing specific classes. Their CREDIT portal was designed to connect workplace learning to colleges and universities in an effort to standardize specific knowledge and work experience with college courses.
For current or former members of the US Military, the Defense Activity for Non-Traditional Education Support (DANTES) may be an option for you. Eligibility requirements can be found here and was created to help students earn college credits by demonstrating competence within a specific subject matter. If your college or university allows DANTES or DSST credits, you can register to take an exam to earn course credits in lieu of taking the course.
As simple as it sounds, if you refer a friend or co-worker to a college or university who, in turn, is granted admissions and successfully registers with the college, you may be eligible for a reduction in your tuition. While the typical reduction may only be $50-$100, but every little bit helps!
You may be able to save a significant amount of money towards your online college by understanding the cost of textbooks. More specifically, some colleges and universities include the cost of textbooks with the tuition which can be a large savings over 2-4 years’ time. You may also be able to rent or buy ebooks in place of physical textbooks with Chegg, TextBooks, BookByte, Amazon, and VitalSource.
Income Tax Savings
While there are a number of college savings plans available today, the two most popular are the 529 Plan and Coverdale ESA. The 529 Savings Plan allows your contributions to grow tax free so long as the account is used for expenses directly associated with college. Most states in the U.S. offer two types of 529 Savings Plans: prepaid and college savings plan. On the other hand, a Coverdale Education Savings Account is a trust or custodial account that can be used for both pre-college and college expenses.