Top5 Ways to Make College More Affordable

By AnnaMaria Andriotis,
Reporter, SmartMoney.com

College students have plenty of concerns to contend with as they prepare to return to campus: choosing their course schedule, preparing for exams, praying for a cool roommate. But one worry may take precedence: affording it all.

After all, a four-year college education along with room and board can easily add up to six figures. Tuition and room and board expenses at public universities average $14,333 per year for in-state students and $25,200 for out-of-state students, according to 2008-09 data from the College Board. Private university costs average $34,132 a year.

While federal student loans can temporarily cover college costs, they don't actually lower the cost of college. There are, however, several measures students can take that do.

Here are five ways to make college more affordable.

1. Apply for Work-Study Opportunities

Sure, the job market is in the dumps, but the campus library and cafeteria may be hiring.

Students awarded federal work study (this is doled out based on financial need and included in your financial aid award letter) should contact their school's financial aid office to claim a position.

Students who aren't eligible for work study can apply for a non-work study part-time job on campus. These positions, which typically pay at least minimum wage, are often listed in the university's student employment or career placement office, says Diane Winland, a financial planner with Financial Finesse, a financial education company.

Work study doesn't count as income on your financial aid application for the following school year, but earnings from a non-work study job do (it counts as adjusted gross income, or AGI). Be aware that students with AGI higher than $3,750 risk receiving less financial aid next year by 50% of the amount above this dollar figure, says Mark Kantrowitz, a college planning expert with FastWeb.com, a free scholarship matching service.

Click here for more on financial aid.

2. Tap Into Tax Credits

Come tax season, attending college can really pay off.

For 2009 and 2010, students can claim up to $2,500 in college costs under the American Opportunity Education tax credit. (This tax credit replaces the Hope Scholarship credit, which offered up to $1,800 during the first two years of undergraduate studies, for 2009 and 2010.) To qualify for the new credit, the student must be in their first four years of an undergraduate college education. It's phased out for single filers with an AGI of more than $90,000 and for joint filers with an AGI of more than $180,000.

Another tax perk worth considering is the Lifetime Learning credit, which allows students (including those pursuing advanced degrees) to claim up to $2,000 in tuition costs. The credit is phased out for single filers with an AGI of more than $58,000 and joint filers with an AGI of more than $116,000.

Click here for more on tax credits.

3. Start Out At a Community College

Most universities and colleges require similar core classes, such as English 101 or History of the World, before a student can begin their major. By taking those courses at a community college for the first year or two then transferring, students can save more than $10,000 a year.

The average cost of tuition and fees at a community college was $2,402 in 2008-09, according to the College Board. And since most students tend to commute to community college from home, they also save on room and board, says Winland.

Before enrolling in a community college, confirm the classes it offers will transfer to the four-year university or college you want to attend. Check with their registrar, admissions office or web site on their transfer list of courses.

4. Complete a Bachelor's Degree in Three Years

Students can try cramming a four-year college education into three years by taking an extra class each semester or summer courses (ideally, at a cheaper college).

You'll save a nice chunk of money assuming your aid package is mostly federal student loans. But students whose aid is mostly grants should stick to a four-year education when grants cover most expenses and leave few out-of-pocket costs.

The amount you save also depends on whether your school charges a fixed price per semester, in which case completing your degree in three years makes good financial sense; if it charges per credit, you'd still eliminate one year of room and board costs.

Click here for ways to cut costs.

5. Volunteer

Volunteering doesn't just make you feel good about yourself, it can also help you pay for college. And come year-end, it will help out a lot more, says Kantrowitz.

Currently, students who enroll for 10 months of full-time service in the AmeriCorps can receive a maximum education award of $4,725 for 1,700 hours of service. Or you can volunteer part time for a minimum of 300 hours for $1,000 pay. (You can enroll pre-college, during college if you're taking a break, or after graduation.)

Congress passed legislation earlier this year that increases the award to $5,350 and allows students from grade six through 12 to volunteer each summer for a maximum of $750 per year toward future college costs. The earliest that this legislation will go into effect is Oct. 1, when the government's new fiscal budget goes into effect, says Siobhan Dugan, an AmeriCorps spokeswoman.

Click here for ways to repay college loan debt.

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