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There currently aren’t national guidelines for colleges to reopen in the fall. Some schools are preparing to fully open up campus, while others are transitioning fully online.
There are unique opportunities to save money if your college student is moving to online instruction in the fall. Here’s how parents can cut costs.
Many colleges are limiting the number of students on campus and canceling activities. If your college student is taking courses online, it might not make sense to live on campus or nearby. Your child will save a lot of money by moving back home. (We have a guide to prepare for the financial consequences.)
If moving back home isn’t an option, students might still be able to save by moving to an area away from campus where rent is cheaper. They can maintain the independence of being on their own, but save by living in a more affordable area.
Some colleges are offering discounted tuition as they shift online, but there are more ways to save.
Tuition prices aren’t set in stone. They can be negotiated based on academic achievements, athletic accomplishments, volunteerism or special circumstances like financial need. Colleges that are struggling to maintain enrollments may be more open to negotiate. Check out these negotiation tactics for lowering tuition.
If your college student was attending a four-year university, private university or out-of-state school, they can save money by temporarily enrolling in community college and transferring their credits later (make sure to verify which courses will transfer to your student’s school of choice). Community colleges are affordable, and the experience may not differ much from a traditional school if your student is already living at home and taking courses online.
Online instruction has changed the cost-benefit analysis of going to a traditional, more expensive school, said Aaron Velky, CEO and co-founder of the Ortus Academy, a financial literacy organization.
“Whether you are learning the basics of year one and two at an expensive Ivy-league school or your local community college, the experience will be similar,” he said. “This is a great time historically to go community or in-state for at the very least the first two years.”
Once you and your child have figured out living arrangements and tuition, the next step is to create a budget and reduce spending. You can use our budgeting spreadsheet for college students to get started.
Budgets can help students identify necessary expenses and places to cut back, said Baruch Silverman, founder of The Smart Investor. “Just cutting a few extravagances or those smaller expenses can help toward savings.”
Changing circumstances present new opportunities to save:
Students no longer commuting can save on gas, parking and car maintenance. They may be able to reduce insurance coverage on a car that rarely leaves the house.
Digital textbooks and online resources may be cheaper than physical books.
Your student’s school may offer technology and other resources to ease the shift to online courses.
Most students have already submitted their FAFSA, but some families can ask for additional financial aid due to changing economic circumstances. While increasing your financial aid burden can help your college student cover expenses, it will add to their debt once they graduate.
But if you can save money in other areas — such as living costs, tuition and transportation — you can potentially reduce the amount of needed aid. If your college student receives an overage payment for unused funds, encourage them to return it to the lender to reduce their debt, saving them hundreds in interest over time.
Here’s a list of things you should never spend your student loan money on.
Every year, $46 billion in scholarships and grants is awarded by public sources, including the Department of Education, colleges and universities, and private sources including foundations, churches and nonprofit groups. These awards are essentially free money that reduce education costs without adding debt.
Eligibility requirements, award amounts and deadline applications vary, and you’ll need to do research to find the right awards. Check out the Department of Education’s scholarship page for advice on finding economic opportunities.
“Online only courses do have the advantage of enabling students to better organize their time” and find a job, said Silverman. “There are lots of ways you can make money online. From freelance writing and designing websites to becoming a virtual assistant, you can use your current skill set and interests to develop a side gig around your studies.”
Here’s a list of side hustles for college students.
While the pandemic has made finding employment more difficult, there are other ways to gain experience and a career path. College students can find internships, freelance opportunities and volunteering experience with local employers and organizations, said Velky.
“Attention has very much shifted to the smaller ecosystem we can all influence,” he said. “And this presents these young adults with a ton of new access.”
Back-to-school season feels different for college students this year, but there are plenty of lessons to learn this year, including financial ones. Check out our complete list of money lessons for college students.
Image: Philippe Giraud
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