15 actions families are taking today to make college more affordable

Editor's note: This article originally ran on Consumerism Commentary. It has has been reprinted here with permission.

Since 2008, Sallie Mae has been producing a report about paying for college on an annual basis. Each year, the report surveys Americans across the country to determine their attitudes and actions surrounding funding for college tuition and expenses. This year’s report is extensive. It contains everything from a categorization of personas based on attitudes towards higher education to a breakdown of expenses paid. Like other good surveys, Sallie Mae’s report identifies stark differences between consumers’ attitudes about money and behavior with money.

Buried within the 58-page PDF summary of the report is something very actionable for today’s American consumer. Researchers asked the participants of the survey what actions their families had taken to make college more affordable. Other interesting data in the report include how families assign responsibility for paying for college in theory, and how those families actually divide the payment responsibility in actuality.

This is all very interesting, and the report is a great read for someone who has the time. But by focusing on the specific ways families have made college more affordable in the last year, I can share tips for people wrestling with the cost of college today, and these tie into the recent Naked With Cash topic of the month.

Many families adopted more than one of these strategies, so don’t limit yourself to just one. Also, not every strategy is right for every family or every student.

1. Choose an in-state school for lower tuition fees

Percentage of Americans using this strategy for the 2013-14 school year: 69 percent. Colleges typically offer reduced tuition rates for in-state residents. One reason public colleges and univertsities (state schools) offer reduced tuition for in-state residents is that household property taxes already paid often go to support these institutions. Colleges with state government funding have a charter that requires the school to offer many public services in return for that taxpayer support, and reduced tuition rates for in-state residents is generally one of those benefits.

It’s a long time ago now, but I’m surprised my parents didn’t require me to find a college to attend in my home state. I suppose they didn’t want me to feel any limitations; but they and I would have saved a lot of money had I attended a public university in New Jersey.

2. Cut back on the student’s entertainment spending

Percentage of Americans using this strategy for the 2013-14 school year: 66 percent, up from 60 percent. The classic frugal approach to saving money requires reducing expenses in one area to pay for something else, either savings or a different expense. In this case, saving money by reducing entertainment expenses can help handle the expenses of attending college. Fewer nights out at the movies, fewer bad restaurant meals, fewer rock concerts — all of these reductions can add up and help make more funds available for tuition.

Dollar for dollar, earning more money can be more effective than saving money from one expense category to better handle another. The student can get a job. But reducing expenses is still a popular strategy and can be employed to afford college.

3. Choose a school closer to home

Percentage of Americans using this strategy for the 2013-14 school year: 61 percent, up from 59 percent. The difficulty with attending a distant school is the cost of traveling between home and college. Attending a school with significant distance from home helps a young adult handle more life responsibility without falling back on parental assistance, but that comes at a price. One benefit of attending a school close to home is the reduced cost of transportation, though that benefit could be negated by more frequent trips to and from school.

With parents close-by, they are able to assist in other life matters, with a potential result of reducing living expenses for the student while at college.

4. Live at home

Percentage of Americans using this strategy for the 2013-14 school year: 54 percent, down from 57 percent. Perhaps as a sign of an economic recovery, fewer families reported students living at home rather than on campus. Living at home can be one of the biggest money-saving tactics for some students. While dorm living has the potential of forcing a frugal existence, it doesn’t always work out that way. Most of the time, staying at home not only reduces expenses through shared household costs, but living with parents reduces the student temptation to spend money at campus and off-campus social events.

Now, I think living on campus adds to the academic experience, and being part of a social group on campus has an importance for personal growth and, in some cases, a potential for lifelong interpersonal networking, but when the goal is to save money, sometimes it’s a smart decision to make those sacrifices.

5. Parents reduce spending

Percentage of Americans using this strategy for the 2013-14 school year: 45 percent, down from 48 percent. It’s not just the student who can reduce spending to better pay for college. Parents can reduce spending as well.

6. Students work more

Percentage of Americans using this strategy for the 2013-14 school year: 48 percent, up from 47 percent. As mentioned above, given the choice to earn more or spend less, earning more can be much more fruitful. You can only reduce expenses down to the basic necessities, but the potential for earning income is unlimited. I realize this is a very optimistic view, ignoring some of the realities of life. And one of those realities is that many families rightly feel that when a young adult is in college, their primary job should be their education. Work distracts from a student’s ability to gain as much as possible out of the experience of attending a university.

But again, it’s a matter of priorities. If finances are a concern, and they should be more often than they are, students taking on more work for more income can offset the cost of attending the school. The best jobs find a balance between maintaining one’s focus on education and producing income. My job at the university’s music library as an undergraduate wasn’t very lucrative, though it did help pay for tuition, but being a Web consultant for professors was a little more rewarding.

7. Tax credits/deductables

Percentage of Americans using this strategy for the 2013-14 school year: 42 percent, up from 41 percent. If you qualify for tax deductions or credits for paying college tuition (or later, student loan interest), you must take advantage of these! The American Opportunity Tax Credit was a reorganization of tax credits for education that have existed previously, like the Hope Credit. The Lifetime Learning Credit is included in the same tax form as the American Opportunity Tax Credit, and that credit assists adult scholars looking to further their education.

8. Add a roommate

Percentage of Americans using this strategy for the 2013-14 school year: 41 percent, up from 35 percent. When living out of his family’s home, whether on campus or off campus, having a roommate greatly reduces the cost of living. In terms of rental costs, I don’t think I’ve ever seen a situation where the cost of a two-bedroom apartment was more than twice the price of the associated one-bedroom apartment. So having a roommate saves money on rent. And then you have shared utilities, shared groceries (if you get along well enough), and other shared living expenses.

9. Accelerate

Percentage of Americans using this strategy for the 2013-14 school year: 28 percent, up from 27 percent. My girlfriend in college was proud of her ability to graduate a semester early. I know that finances were a concern for her family, and to this day I feel bad for trying hard to convince her to stay at the university rather than opting to move back home and attend college in her own home state of Pennsylvania. She also paid for a semester of tuition by selling Beanie Babies, which were in a consumer frenzy at the time. Getting through an undergraduate degree in as little time as possible, taking as few credits as possible, will always be a money saver compared to the alternative.

10. Early loan payments

Percentage of Americans using this strategy for the 2013-14 school year: 23 percent, up from 22 percent. If you can pay off the loans before interest is capitalized, you can save lots of money. Once you are being charged interest on your interest, you start dealing with compounding interest. Thankfully, federal student loans have a grace period during which time interest is not capitalized. But you’re not required to send minimum payments to those student loans while they’re deferred. If you do anyway, you can reduce your liability later on.

Private loans are easier to understand — the faster you pay them off, the less you’ll pay, always.

11. Parents work more

Percentage of Americans using this strategy for the 2013-14 school year: 19 percent, down from 20 percent. Often called the ultimate sacrifice, parents taking extra jobs or working overtime for the benefit of their children’s education could be considered by many as going above and beyond the call of parental duty. Maybe that’s why only 19 percent of American families admit to this tactic. But for some families, particularly those whose kids are in that family’s first generation of potential college students, making that sacrifice so that the students have a better chance of living of financially secure life makes a lot of sense. It requires a long-term view, focusing on survival of the family in the long-term.

12. Change majors

Percentage of Americans using this strategy for the 2013-14 school year: 19 percent, steady. How does changing a major result in saving money? Some courses of study can be more expensive. If you’re studying international relations, you may be expected to travel overseas. If you are in a specialized scientific major, you may have exorbitant lab fees that someone studying another science may not need. And there is the perennial view that students should enroll in majors that provide a long-term monetary return, like engineering or finance. That may not save money in the short-term, but a higher starting salary certainly makes repaying college loans easier.

13. Attend school part time

Percentage of Americans using this strategy for the 2013-14 school year: 17 percent, up from 15 percent. It can take longer to earn a degree, but the cost per year can be significantly reduced by taking fewer classes each semester. This opens up the student’s schedule to work a full-time job without sacrificing attention spent on education. It’s much more realistic to get through school completely debt free by taking a part-time approach, but it does come at a cost. Many students who take this approach never finish their undergraduate degree. As they continue at their job, they find themselves receiving more and more responsibility and are more likely to think that college degrees are unnecessary.

14. Transfer to a less expensive school

Percentage of Americans using this strategy for the 2013-14 school year: 12 percent, up from 9 percent. There was a significant increase in American students opting to transfer to a less expensive school. Maybe this is due to a recognition of the importance of financial security and a stronger avoidance of unmanageable debt. It may be more reasonable to manage college expenses by starting a student’s college career in a less expensive school, as one might if they start at a community college for two years and later transfer to a four-year college to complete a degree.

15. Use the military

Percentage of Americans using this strategy for the 2013-14 school year: 3 percent, down from 4 percent. In the early days of the GI Bill, joining the military was a good way to ensure you’d be able to afford college. The latest “Post-9/11″ GI Bill covers the full cost of in-state tuition at public colleges and up to almost $20,000 a year at private schools. The financial benefits don’t end with the tuition assistance. Since the beginning of the GI Bill, this has been one of the most effective policies in the history of the United States for bridging low-income families into the middle class. And it’s still there for students willing to put their lives on the line to defend the United States and to be a part of the military establishment.

Every family has a plethora of options for saving money for college, and the best results come from taking the strategies that apply to your particular family in combination. How do you plan to save for college?

Luke Landes founded Consumerism Commentary in 2003 and has been building online communities since 1990. He has contributed to PC World Magazine, US News, Forbes and other publications.