8 Ways the Middle Class Can Save Enough for College Tuition — Even as It’s Skyrocketing
The average cost of college tuition continues to rise. For private colleges, the cost rose by 4% over the last academic year — it’s now $42,162 — and tuition for in-state students at public schools increased by 2%, according to data from U.S. News & World Report. In addition to tuition fees, students and their families are also expected to pay for housing, textbooks and food for the school year, which may cost thousands of additional dollars.
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As college tuition continues to skyrocket, the majority of middle-class families are being left in the dust. However, there are ways that middle-class students and their families can save money for tuition amid increasing costs.
Start Saving Early With a 529 Plan
According to data from the Edward Jones annual 529 survey, nearly 50% of Americans don’t know what a 529 savings plan is. Furthermore, 60% don’t think they’re saving enough to reach their goals for education expenses. With some colleges costing almost $95,000, setting up a 529 plan as early as possible can significantly help middle-class families save for college.
A 529 college savings plan is a state-sponsored investment plan that helps people save money and pay for college expenses. The earlier you start one, the more money you may be able to save for college tuition.
A 529 plan also offers tax advantages that can increase your savings over time. It is important to consistently contribute to these plans, even if the initial amounts are small. By regularly setting aside money and allowing it to grow over time, families can build up a college savings fund without straining their budgets.
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Part-Time Work, Internships and Volunteer Opportunities
Students can save money before and during college by applying for part-time jobs, internships or even volunteer work opportunities. Not only can working help students pay for tuition and housing costs, but it can also provide them with skills and connections that may benefit them long after finishing college.
Set Up a Tuition Payment Plan
Tuition payment plans are an effective way for middle-class families to manage education expenses. Unlike traditional lump-sum payments, payment plans allow families to distribute the cost of tuition over several months, aligning with their regular income flow.
“This approach not only eases the immediate financial burden, but also allows for better budgeting and reduces the reliance on high-interest loans,” said Laura Newell-McLaughlin, executive vice president of integrated payments and campus commerce for Transact Campus. “By opting for tuition payment plans, students and families can take proactive steps toward making higher education more accessible and sustainable, without overextending their financial resources.”
Tuition payment plans are practical in that they align with the financial rhythms of the middle class, making them a great option for financing college expenses.
Stay Informed About Financial Aid Options
Staying informed about different financial aid options, or even seeking insight from a financial planner, is a great way for middle-class families to utilize and familiarize themselves with different resources. By understanding the various financial aid options available, families and students can make the most of these resources and find what works best for them.
It is also important to stay up to date on legislative changes and financial decisions that are made regarding college financial aid.
Attend Community College
Another way to save money for college tuition is to consider attending community college for the first two years. Community colleges have lower tuition rates and are a more affordable way for students to complete their general education courses before transferring to a four-year institution.
Combining the lower cost of community college with disciplined budgeting and financial planning can make higher education more attainable for the middle class.
Consider Shared Housing
For the middle class, housing is one of the biggest expenses. For college students, it is incredibly common to need housing, whether it is on-campus dorms or off-campus options. With these housing options inevitably comes rent payments, monthly utility bills and grocery expenses that will go along with tuition costs.
“My best advice is to stay with family for as long as possible so you avoid rent and utilities costs,” said Gates Little, CEO and president of The Southern Bank Company. “Of course, you could chip into these bills, but you won’t have to absorb them 100% independently.”
Little also recommended renting with friends if college students don’t plan on staying with family while they attend college.
“You’ll be able to split the bill among roommates, and that could remove at least 50% of the cost of rent from your responsibility,” Little said.
Plan Out Meals
Although inflation hit its highest in June 2022, Americans are still facing the heavily increased cost of groceries. One way for middle-class college students and families to reduce grocery costs and limit trips to the grocery store is to plan their meals ahead of time.
“The cost of groceries is steadily increasing, but people who eat out and grocery shop ‘in the moment’ will always feel the expense the hardest,” Little said. “Planning your meals and curating a grocery list will help you track your finances and stay on budget with food costs. The extra hundreds you save can go towards your college tuition.”
Start a Side Hustle
Higher inflation requires consumers to have a higher income. This has caused many Americans — nearly 34% — to start a side hustle. While 50% of these Americans started a side hustle because they wanted to, one-third of them said they did so because they needed to increase their income, according to statistics from LuisaZhou.com.
A side hustle can also be a great option for college students. “Start looking around for a part-time job or — better yet — try turning your passion into a moneymaking business,” said Nojan Rahimi, finance broker and director for Blutin Finance. “Start the side hustle you’ve been eyeing, and the money earned from that can be used to supplement your college tuition.”
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