For parents as well as students, saving for college can feel a lot like a giant weight. And given the most recent figures published by the College Board's Trends in Higher Education report, it's becoming heavier every year. The fact is, the average published tuition and fee price for in-state students enrolled full time at public four-year colleges and universities in 2016-17 is $9,650, $230 (2.3 percent) higher than in 2015-16.1
But despite the rising costs, a college education still remains a good investment in your future. According to a study from the U.S. Department of Education's National Center for Education Statistics, in 2015, individuals with a bachelor's degree earned nearly $25,000 more per year than high school graduates without one.1 Moreover, adults with a bachelor's degree found it a lot easier to find employment.
So what does all this mean for you? Unfortunately, just saving for college may not be enough for your aspirations. You may need to consider taking on more debt than expected when it comes to funding a quality college education. It also means that you may need to get smarter about the amount of student loans that are taken out. Here are some tips on making smarter decisions when it comes to borrowing money for college.
Keep an open mind and compare schools.
Even though you may have had your heart set on attending a certain college, it's in your best interest to compare how much your particular degree is going to cost you among at least three schools. You may be able to find a school that offers a comparable education with a lower price tag (so that you can borrow less).
Find free money.
The best options for paying for college are the ones that come at no cost to you. Scholarships and grants can be a great way to get the money you need, without having to take out loans or pay it back.
Only borrow what you need.
Many financial packages offer students more money than they actually need to cover tuition costs. These extra funds can be used for anything you want. However, it's best to avoid borrowing money that isn't going directly to your tuition. Instead, consider covering other expenses (such as rent, transportation, and clothing) by way of a part-time job.
Pay the interest on your un-subsidized loans.
Some loans will allow you to skip making payments while you are in school and for six months following graduation. However, during this in-school deferment, your lender will still charge you interest on your loan and any unpaid interest will be added to your balance. This causes your loan to get bigger and leads to a larger monthly payment when it comes time to repay your loan. A better plan would be to make partial monthly payments during your in-school deferment, or at the very least, you should consider making payments on any new interest that accumulates each month.
Be sure to do your homework early because the sooner you start, the less likely you are to find yourself in a bind and having to borrow money. And while student loans may be necessary, you always want to try and borrow as little as possible.