Funding Your Education

Did you know that college tuition fees have increased faster than the general rate of inflation, making a four-year degree more expensive than ever before? With planning and smart choices, however, higher education is accessible to people from all income levels. Here are some tips for paying for college without breaking the bank:

• Consider doing your first two years at a community college, where credits are significantly less expensive than at a four-year school. Many students transfer to a university and begin their third year as a junior. Plenty of community colleges and state schools even have special agreements that make the switch easy.
• If your parents have a low debt-to-income ratio (only a small percentage of their monthly income goes to paying off debts) and mortgage rates are low, ask them if they would be willing to take a home equity line of credit or cash-out mortgage refinance to help you pay for school.
• Get a job! This may seem like a total no brainer, but you can actually save a lot of money by working during school or living at home, since all your big living expenses are covered by your parents.
• Hunt for free money. There are literally thousands of scholarships and grants out there. Some are for students from certain backgrounds, while others are for students who want to study particular subjects. Whole websites, like fastweb.com, are devoted to matching students with scholarships.
• Use the system to get as much financial aid as possible. Certain assets, such as employer retirement plans, annuities, and home equity, are not considered when schools look at your parents' financial profile. Ask your parents to put more money into these (if they can). Anything they can do to lower household income, such as deferring bonuses or declaring investment losses, could also qualify you for more financial aid.