Will COVID-19 Change The Way You Save For College Tuition?
Many things in the United States are in flux right now because of the pandemic. Perhaps nowhere is the uncertainty and confusion more apparent than in the US education system.
As a parent or grandparent, you obviously want to give your kids the best possible chance of success in life. Until recently, the path to that success typically involved getting a college degree. However, as anyone who is paying for college tuition knows, the cost of education is higher than ever and many people graduate saddled with crippling debts. To help reduce their kids’ debt load, some parents scrimp and save to pay for higher education, often sacrificing their retirement. However, diving into retirement funds is a risky decision that can result in you running out of money when you can no longer work.
What if there were ways to get college credit at little to no expense?
Fortunately, if COVID-19 has one upside, it has changed the way people think about, and plan for, higher education. With some advanced planning and understanding, it is now possible to get 2-3 years of quality education for $10,000 or less! Educational institutions ranging from pre-schools to high schools to universities are undergoing an “accelerated disruption.”
Before the virus outbreak, many parents and grandparents who were helping their kids with higher education costs were beginning to ask whether skyrocketing tuitions and fees were worth it. They started looking for less expensive alternatives and more creative ways to finance education. COVID-19 is now driving the creation of lean new digital education models that require less administration and oversight and reduce the need for high-expense items like textbooks. Study after study proves these models are useful for most students, and a lot less expensive. For example, sites such as Sophia (https://www.sophia.org/) make it possible for some students to get nearly two years of college credit for thousands of dollars less than the same credit would cost at a brick and mortar university. Sophia has partnered with 30 top-rated universities to guarantee credit transfer.
University of the People ( https://www.uopeople.edu/) bills itself as the first non-profit tuition-free online university that is American-accredited. There are some inexpensive assessment and registration fees, but tuition itself is no cost.
Modern States’ website shows students the path to getting their entire Freshman year for free. https://modernstates.org/
Of course, traditional brick-and-mortar schools must pivot as well. Many offer high-quality online versions of their most popular classes for full credit. These can cost far less and, of course, save students money on food and lodging costs while preserving the institution’s prestige.
In addition to the growing list of fully-accredited online college courses, you can also take advantage of advanced placement testing to reduce costs. One of the most popular ways to “test out” of college courses is the College Level Placement Exam (CLEP) test. Based on comparisons of test costs and 4-year college tuition, earning 15 CLEP credits has the potential to save students nearly $5,000 in tuition and fees. Prior learning assessment, or PLA, is another way students can get college credit for subject matter learned previously through job or military experience. Like CLEP, credit for PLA is obtained through online testing. A variety of online resources exist to assist you in getting money-saving PLA credit.
Don’t take a cent from your retirement accounts or emergency fund until you’ve talked to your financial expert.
Avoiding the temptation to dip into your retirement and income accounts is critical to ensure that you have enough money when you can no longer work. While it might seem as if using your savings is the only way you can afford to send your kids to college, you should never do so until you have talked with your trusted financial planner. He or she will help you find viable alternatives to funding college education that don’t involve compromising your own retirement goals.