How to Save Money in College: A Prof’s Top 5 Money Saving Tips

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Oh look…​another​​​ blog post about how to save money in college.

But this one is different, I promise. I’m not going to tell you what you already know, like to rent your textbooks instead of buying them. Or to get Netflix instead of cable. Or to eat at restaurants that offer student discounts.

Sure, those things will save you some money, but I’ve worked with college students for over 20 years. I see students make major money mistakes on a daily basis. Cable TV and eating out aren’t where they’re wasting the most cash.

I’ve seen students throw away hundreds of dollars at a time. Sometimes thousands of dollars.​ So I put together my own list of how to save money in college. Some of these suggestions won’t be very popular, but if you really want to graduate with less (or no) debt, you need to keep reading.

I’m sure this will be the least liked suggestion on the list. Isn’t the whole point of college to get away​ from home? Not necessarily. Many students choose to attend colleges close to home.

​In 2016, nearly 38% of first-year students went to college less than 50 miles from home, but only 18.5% of first-year students actually lived at home while going to school. That means a lot of students who live within commuting distance of college decided to live on campus instead. That is a major money mistake, considering on-campus housing can cost upwards of $10,000 a year.

​Another major money mistake is using loans to pay for dorm housing. Borrowing money to live on campus when you could live at home is a disastrous financial decision. Yet every year I see students who live less than 25 miles from campus paying (or borrowing) to live in the dorms.

I know living at home isn’t an option for some students, even those who are close to campus. There are family dynamics and other things to consider. But there are a lot of students who could save money by living at home and just choose not to.

​Students are afraid of missing out on the “real college experience,” but t​hey need to think long term. Sure, living at home during college may not be much fun, but you know what else isn’t fun? Living at home ​​after​​​ college to help pay off the money you borrowed so you wouldn’t have to live at home during college.

​Sure, living at home during college may not be fun, but you know what else isn’t fun? Living at home after college to help pay off the student loans you borrowed so you wouldn’t have to live at home during college.

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Money Saving Tip #4: Don’t Transfer Colleges

Students worry about changing their major, but changing colleges is a much bigger money mistake.

At least one-third of students transfer colleges before graduating. Some of these students transfer from community colleges to universities, but about half these students are reverse transfers.

Reverse transfers occur when a student transfers from a university to a community college. Maybe the community college is cheaper or maybe the student realized they just aren’t ready for university-level work.

Reverse transfers are particularly worrisome because a lot students end up transferring a third time once they’ve finished their community college classes. That means they’ll have attended at least three different colleges by the time they graduate.

To avoid this major money mistake, choose your college carefully. Ask yourself if you’re really ready to go to college, then decide what factors are most important to you in a college.

And if you do end up not liking your school, you’ll need to answer some important questions before transferring colleges. The truth is, most of the time you’ll better off financially by staying put and finishing your degree.

Money Saving Tip #3: ​Know College Rules ​and Deadlines

​Know ​​college and financial aid rules

One of the easiest ways for students to save money in college is simply to know and follow the rules. Every year I see students lose or waste money because they didn’t bother to check requirements. Like the student who dropped a class then realized she was below the minimum credits required to keep all h​er financial aid. Or the student who lost a scholarship because he didn’t know he had to apply to renew it every year.

These money mistakes could have been avoided just by asking their financial aid advisers some simple questions.

Then there’s the student who didn’t realize until the second week of senior year that he had to write a thesis in order to graduate. (For reals.) I don’t know what happened to this student, but I’m guessing he spent an extra year in school completing his thesis – and paying an extra year of tuition, too.

​Don’t waste your money. Make sure you know the rules to keep your financial aid and to finish your degree.

​Know ​college and financial aid deadlines

I’m not talking about when assignments are due or the dates of your final exams. Those are important, but they’re just some of the many deadlines you need to keep track of in college. For example, if you live on campus, you need to know when housing applications for next year are due. If you miss the deadline, you may be looking for an apartment and a couple of roommates.

​​If, like 70% of students, you get financial aid, you need to know when to file your renewal FAFSA each year.

You also need to remember when course registration opens. If you wait too late to enroll, don’t complain about your 8 AM class. And if you decide to drop that 8 AM class, you need to know your school’s drop deadlines and refund policies.

If you’re lucky, someone will remind you of important deadlines…once. After that, it’s your responsibility to remember them. So make sure you know (and meet) important requirements and deadlines. It will help you save money and graduate on time.

Money Saving Tip #2: ​Create ​and Stick ​to ​a Budget

This will probably be the second-least liked suggestion on the list. Budgets are boring, right? Or, as my students would say, “budgets are basic.” But if you want to save money in college, having and sticking to a budget is essential.

If you don’t have good money management skills, college is a good time to learn them. This is especially true if you’re using financial aid to help pay for school. Your financial aid may be disbursed in one or two big payments each semester. That means you’ll have to stretch your money to cover months in between disbursements. A budget can help you do just that, by making sure you keep your spending under control.

When you’re creating a budget for college, do your research and be realistic. Look up the actual tuition and fees for your university, as well as the cost of living in the dorms, if you plan to do so. Don’t just use figures provided by your school, as cost of attendance estimates can be inaccurate.

You also need be honest with yourself about how much you’ll really spend on things like eating out, entertainment and clothes. In order for a budget to work, it has to reflect your true lifestyle and spending priorities. And don’t forget to include often overlooked college expenses, like the cost of trips home during breaks and holidays, in your budget.

Budgets may be basic and boring, but they are the best way to ensure you aren’t spending more than is really necessary. In turn, that can help curb your student loan debt, since you’ll know exactly how much you need to borrow to keep yourself housed, clothed and fed while ​getting your education.

​Money Saving Tip #1: Choose ​a College ​with Block Rate Tuition

If you’re wondering how to save money in college, block rate tuition is my #1 money-saving tip.

Block rate tuition, sometimes called flat rate tuition, means that after you enroll in a certain number of credits you’re no longer charged additional tuition. So, flat rate tuition can be a great way to reduce the cost of college.

(Okay, there’s some math coming up here. Please don’t freak out on me.)

Typically, tuition is charged by the credit hour.  If you’re taking three credits and tuition is $100 per credit hour, then you pay $300 tuition. If you’re taking 18 credits, you pay $1,800.

Some schools stop charging by the credit hour after you sign up for at least 12 credits in one semester. This means a student taking 15 or 18 credits pays the same as a student taking 12 credits.

​How ​block rate tuition can save you money in college

Suppose we have two students at a school with a block rate tuition policy. The first student takes 12 credits and pays $1,200 in tuition. The second student takes 18 credits and, because of the block rate tuition policy, also pays $1,200 in tuition.

The block rate tuition policy saved the second student $600 in one semester. Over four years this could add up to nearly $5,000 in tuition savings. That’s a lot of money, especially if you’re using loans to pay for school. Who wouldn’t want $5,000 less debt?

When researching colleges, be sure to look for those that have block rate tuition. Taking extra classes without having to pay extra tuition could save you thousands, as well as help you earn your degree faster.

Live at home. Go to one school. ​Know rules and deadlines. Keep a budget. Pay less for more.

Those are the best ways I know to save money in college. Altogether, they could shave thousands, maybe tens of thousands, off your total cost of college. That means more money in your pocket. Just don’t waste it all using those student discounts, okay?

Do you have some great tips how to save money in college? Go ahead and share them in the comments​. I’d love to hear what you have to say.

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